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T-Mobile’s Postpaid Phone Churn Rate Improved in Q4

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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.

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Peer comparison

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).

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