T-Mobile’s demise for axing phone subsides was greatly exaggerated

T-Mobile

I told you so.

Almost a year ago I told you that T-Mobile axing phone subsides wouldn’t be its death, that its move to promote no contracts and cheaper unsubsidized monthly plans would ultimately shake the industry up as we knew it. At the time, most of the pundits were crazy pessimistic about such a bold vision turning for the best. Well, those folks were proved wrong as T-Mobile’s gamble has paid off with the company’s latest earnings report.

Magenta has been trending upwards ever since its CEO John Legere took over, and implemented the company’s new vision. Today the fourth largest carrier in our country reported some impressive numbers, adding more than 1 million customers for the third quarter — 648,000 of which are new valuable postpaid users. This brought T-Mobile to a total of more than 45 million customers. In addition, Magenta sold more than 5.6 million smartphones during the quarter.

These figures are on par with what the ‘Uncarrier’ did last quarter, which was added over 1.1 million net subscribers and an increase of 1.3 million from the same quarter last year (685,000 of those new customers were branded postpaid phone net addition).

In the press release, CEO John Legere spoke of the success of its uncarrier approach.

“T-Mobile’s Un-carrier approach is resonating with consumers. We added more than 1 million customers and led the industry with 643,000 branded postpaid phone additions because we are fixing the things that drive customers crazy.” Legere continued saying “Part of our customer momentum comes from the MetroPCS acquisition. With MetroPCS we are making great progress, including the planned additional expansion of the MetroPCS brand into another 15 additional markets by November 21. Our momentum is great and we have confidence that we can continue to deliver sustainable and profitable growth.”

If you combine both of the last two quarters, this shows a net gain of over 2 million customers (1.3 million of those customers as postpaid users). So, yeah, ridding itself of subsidies helped resurrect the company.

T-Mobile overcame what I deemed as the biggest “roadblock” for the company to get around: messaging. The company’s mission was to educate its employees enough to communicate to customers in the most transparent way; a way that’s not so confusing for anyone to understand. T-Mo has been on its game with messaging, its marketing has improved 10-fold as commercials are finally resonating with potential subscribers.

So it’s safe to say that the company has gotten through the toughest part. Now Magenta is sitting back enjoying the fruits of its bet on no two-year agreements. T-Mobile has changed the industry, with the top dogs: Verizon and AT&T following in its footsteps rolling out their own upgrade plans recently.

With better phones, plans, and improving coverage, the company can only go further up from here. I wonder how long it’ll take before T-Mobile knocks off Sprint for the third spot? At this rate, it shouldn’t be long.

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