T-Mobile’s Postpaid Phone Churn Rate Improved in Q1

In this part, we’ll discuss T-Mobile’s (TMUS) customer retention metric—the churn rate. T-Mobile’s postpaid phone churn rate continued to decline YoY (year-over-year) in the first quarter. The company reported a record-low branded postpaid phone churn rate of 0.88% in the first quarter, which was lower than its rate of 1.07% in the first quarter of 2018.

The reduction in the postpaid phone churn rate is mainly driven by increased subscriber satisfaction and loyalty from ongoing improvements to T-Mobile’s customer service and network quality.

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The lower churn rate helps wireless service providers save on acquisition costs associated with acquiring a customer, which helps them expand their operating margin.

In the first quarter, among the top four major US mobile operators, Verizon (VZ) is expected to have the best postpaid phone churn rate of 0.84%. AT&T (T) had a postpaid phone churn rate of 0.93%. Sprint (S) hasn’t reported its financial results for the same quarter. Analysts expect Sprint to report a postpaid phone churn rate of 1.85% in the fourth quarter of fiscal 2018, which ended on March 31.