T-Mobile's Strong Q4 Growth Came at the Price of $20 Million Loss

By Michelle Maisto  |  Posted 2014-02-25 Print this article Print

A goal has been to transition customers off MetroPCS's Code Division Multiple Access (CDMA) network and on to T-Mobile's GSM or LTE networks, and then "re-farm" the MetroPCS spectrum for LTE deployments. About 40 percent of MetroPCS customers have made the switch, and T-Mobile plans to decommission the MetroPCS network in Boston, Las Vegas and Philadelphia by year's end.

The combination of Un-carrier moves, LTE growth and MetroPCS plans will help T-Mobile improve its financial situation, Eric Costa, an analyst with Technology Business Research, said in a Feb. 25 research note.

"T-Mobile remains a distant fourth among Tier 1 operators, in terms of revenue and subscribers, yet these strategies will allow the company to gain market share on Sprint over the next two years," wrote Costa.

He added that the "pricing war" T-Mobile started during the second half of 2013 will continue through 2014, and that T-Mobile's "aggressive stance" will help it "maintain its second-place position in terms of postpaid net additions in 2014."

Among the tier-one carriers, only Verizon added more postpaid customers (1.6 million) during the quarter.

Legere, during the earnings call, insisted that what was taking place wasn't a pricing war.

Legere said the industry is full of "normal, healthy competition." He added, "I don't think any players in the industry have used the term pricing war. … All of the players are just trying to protect their bases. … The changes taking place in the industry have been as much about the structure of how we're serving customers as it is about pricing. … I don't think it's a pricing war, and I don't think it will be."

As for the rumors that Sprint and T-Mobile are tiptoeing around the idea of a merger, Legere said he didn't want to comment on specifics.

"But it isn't hard to understand why we have a position that we've espoused over time, that this industry is ripe for further consolidation," said Legere.

Sprint CEO Dan Hesse, during Sprint's fourth-quarter 2013 earnings call Feb. 11, fielded a similar question with a similar answer.

Hesse told analysts on the call, "I've said consistently that further consolidation—outside of Verizon and AT&T—would be healthy for the competitive dynamic of the country … and I still believe that's very much the case."

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