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T-Mobile’s Postpaid Phone Churn Expected to Keep Improving

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T-Mobile’s postpaid phone churn in 1Q18

Previously, we learned about expectations for T-Mobile’s (TMUS) prepaid customer net additions in 1Q18. In this part, we’ll look at the company’s customer retention metric, its churn rate. T-Mobile’s postpaid phone churn should continue to improve in 2018, mainly driven by customer satisfaction and loyalty due to continuous improvements to its network quality and customer service. In 4Q17, T-Mobile reported a postpaid phone churn rate of 1.2%, lower than the 1.3% it reported in 4Q16. Lower churn helps mobile carriers save on acquisition costs related to acquiring subscribers, in turn expanding their operating margins.

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Peer comparison of postpaid phone churn in 4Q17

In 4Q17, among the top four major US wireless carriers, Verizon (VZ) continued to have the best postpaid phone churn rate, of 0.77%. AT&T (T) had a postpaid phone churn rate of 0.89%, and Sprint (S) had a postpaid phone churn rate of 1.7% in fiscal 3Q17 (ended December 2017).

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