T-Mobile CEO John Legere at one of the company’s “Uncarrier” events.
The momentum of T-Mobile can’t be denied.
For the past several quarters, the Bellevue, Washington, company has gained more mobile phone customers than the rest of its rivals. On Tuesday, the nation’s third-largest wireless carrier said it added 843,000 smartphone customers, part of the 2.3 million total customers it added in the third quarter.
By comparison, Verizon signed up 430,000 net new phone customers, while AT&T lost 333,000. Sprint hasn’t reported yet, but would have to add more than 746,000 phone customers to keep T-Mobile from once again outstripping the rest of the national carriers in terms of growth.
The numbers reflect T-Mobile’s success in wooing consumers with its “Uncarrier” campaign, which has resonated with consumers because of pocketbook-friendly features, including monthly rollovers of unused data and free data roaming in Canada and Mexico. A dash of marketing flash and a pinch of profanity courtesy of CEO John Legere also helped turn heads.
The two-and-a-half-year-old Uncarrier campaign is starting to pay off on the bottom line too. T-Mobile posted a profit for the second consecutive quarter, earning $138 million, or 15 cents a share, along with revenue of $7.8 billion. That reverses a loss from a year ago.
The results, however, fellow below Wall Street’s expectations. On average, analysts had expected T-Mobile to earn 30 cents a share and generate revenue of $8.29 billion, according to Thomson Reuters. The company attributed the decline in income to costs associated with shutting down the MetroPCS network and higher tax expenses.
The company said it expects to post positive earnings in the fourth quarter and for the full year.
T-Mobile shares rose 1.5 percent to $42 in premarket trading.
T-Mobile is particularly proud of growth in customers who pay at the end of the month, a lucrative bunch of high-credit subscribers known as postpaid. In addition to the 843,000 phone customers it added, it signed up 242,000 connected devices, for total postpaid subscriber growth of 1.09 million. It also raised its forecast for full-year postpaid growth to 3.8 million to 4.2 million, up from a previous range of 3.4 million to 3.9 million.
Customers are also hanging onto T-Mobile’s service longer, with the turnover rate falling to 1.46 percent from 1.64 percent a year ago.
The company ended the quarter on a high note, analysts believe, thanks to the debut of the iPhone 6S and iPhone 6S Plus, which came towards the end of the period. The numbers topped Legere’s tease of early subscriber numbers in September.
As the last carrier to get the iPhone, T-Mobile has the smallest base of customers using Apple’s iconic smartphone. Legere had said that preorders for the iPhone 6S and 6S Plus were up 30 percent from advance iPhone sales a year ago, when the iPhone 6 and 6 Plus debuted.
The carrier has also excelled in prepaid plans, which allow customers who typically have lower credit scores to pay at the beginning of each month. The company added 595,000 such customers in the period.
Prepaid customers have become increasingly important to carriers, who fight for their business. While AT&T lost many of its contract customers, the carrier pointed to the 466,000 prepaid customers added through its Cricket Wireless and GoPhone services as a bright spot.
Sprint, which reports results next week, has also traditionally been strong with prepaid customers and sees much of its growth from its Virgin Mobile and Boost Mobile arms.