T-Mobile is doing something right. While Sprint posted customer losses of 400,000 in Q1, rival T-Mobile brought in 1.3 million new subscribers, attributing the wins to its uncarrier campaigns.
the rise is the continuation of a trend, since T-Mobile had gained 869,000 subscribers in Q4 2013. The operator’s uncarrier promotions come with a hefty price tag, however, and T-Mobile also registered its fourth straight quarterly loss in a row. It reported adjusted earnings of US$1.09 billion for Q1, down 7.6 percent from a year earlier. The results didn’t put off Sprint, which is reportedly still pursuing a merger with T-Mobile and met with six bank this week to make debt arrangements to cover its impending offer.
Yankee Group Senior Analyst Rich Karpinski comments
“Pairing T-Mobile and the word ‘juggernaut’ in the same sentence would have been unthinkable just a short year ago. But it continues to ride its uncarrier wave in spectacular fashion: The 1.3 million postpaid adds are only part of the story; it actually gained a total of 2.4 million customers (across postpaid, prepaid and wholesale) in the quarter, a stellar performance in such a highly competitive market. That compares to more than half a million Q1 customer losses for nearest rival Sprint.
The story now turns to a potential Sprint T-Mobile merger. It looks like nothing will stop Softbank Chairman Masayoshi Son from putting together a Sprint bid for T-Mobile, despite very real concerns that U.S. regulators will block the deal. And that brings up an intriguing question: Will T-Mobile's ongoing strength (and Sprint's relative Q1 weakness) offer regulators proof they must keep the hard-charging T-Mobile independent? Or will word that Sprint/T-Mo would likely be run by T-Mobile CEO John Legere prod them into seeing the combined companies—led by Legere and flying the uncarrier banner—as the only true path toward building a competitor to market leaders AT&T and Verizon? How regulators weigh the answer to that question will go a long way toward determining the outcome of a Sprint bid for T-Mobile this summer.”