T-Mobile’s postpaid phone churn rate
In the previous part of this series, we discussed T-Mobile’s (TMUS) postpaid phone subscriber net additions in the fourth quarter. In this part, we’ll discuss T-Mobile’s customer retention metric—the churn rate. The telecom company’s postpaid phone churn rate continued to decline YoY (year-over-year) in the fourth quarter. The company reported a branded postpaid phone churn rate of 0.99% in the fourth quarter, which was lower than its rate of 1.18% in the fourth quarter of 2017.
The decline in the postpaid phone churn rate is mainly due to increased subscriber satisfaction and loyalty from ongoing improvements to T-Mobile’s network quality and customer service.
The lower churn helps telecom operators save on acquisition expenses associated with acquiring a subscriber, which helps them expand their operating margin.
In the fourth quarter, among the top four major US wireless carriers, Verizon (VZ) continued to have the best postpaid phone churn rate of 0.82%. AT&T (T) had a postpaid phone churn rate of 1.00% in the same quarter. Sprint (S) reported a postpaid phone churn rate of 1.84% in the third quarter of fiscal 2018 (quarter ending in December).