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Why T-Mobile’s Postpaid Phone Churn Rate Improved in Q3 2018

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Updated

T-Mobile’s postpaid phone churn rate in Q3 2018

Previously, we looked at T-Mobile’s (TMUS) postpaid customer net additions in the third quarter. Let’s now discuss T-Mobile’s customer retention metric, its churn rate. The company’s postpaid phone churn rate continued to decline YoY (year-over-year) in the third quarter, falling to 1.02% from 1.23%, primarily driven by increased subscriber satisfaction and loyalty thanks to ongoing network quality and customer service improvements. A lower churn rate reduces mobile operators’ customer acquisition costs, expanding their operating margins.

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Peer comparison

In the third quarter, Verizon (VZ) continued to have the best postpaid phone churn rate among the top four major US mobile carriers, with a rate of 0.80%. AT&T (T) had a postpaid churn rate of 0.93%. Meanwhile, Sprint’s (S) postpaid churn rate was 1.73% in the second quarter of fiscal 2018 (ended in September).

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