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T-Mobile US added 2.3 million new overall customers in the third quarter of 2014 as the company boosted revenue to $7.35 billion, an increase of 9.9 percent from the $6.68 billion in revenue posted in the same quarter in 2013.
The company announced its fourth-quarter estimates in a call with analysts and journalists on Oct. 28, which also touted the addition of 10 million new customers during the last six quarters.
The latest 2.3 million net customer additions include 1.4 million branded postpaid net additions and 411,000 branded prepaid net additions, according to T-Mobile. Postpaid additions are customers who pay after a month’s service interval has been completed, while prepaid customers pay for their services in advance.
Touting the company’s latest customer tallies, T-Mobile CEO and President John Legere called the figures another indication of the carrier’s recent successes amid a field of tough competition.
“Despite our competitors’ best efforts, the ‘Un-carrier’ [contract-free strategy] made huge advances in the third quarter with record net new customers,” Legere said in a statement. “More proof of the resurgent strength of our brand and the massive momentum behind the Un-carrier consumer movement.”
Despite the higher revenue total, T-Mobile also reported a loss of $94 million in the third quarter. That loss, however, was largely related to the company’s expenses in continuing to migrate its MetroPCS customers over to the T-Mobile network, from older Code Division Multiple Access (CDMA) systems, the company stated. About $97 million of the cost to shut down the old CDMA network was recognized in the latest quarter, the company stated.
T-Mobile lost 12 cents a share for the quarter in connection with those costs, which was an increase from the 5-cents-per-share loss that was posted one year ago.
Eric Costa, a networking and mobile analyst with Technology Business Research Inc. (TBRI), told eWEEK that T-Mobile’s $94 million loss for the quarter doesn’t tell the whole story about the company’s performance. “The loss was due mainly to the costs associated with the shutdown of the MetroPCS CDMA network compared to last year,” he wrote in an email reply. “This took place specifically in the Boston and Las Vegas markets. T-Mobile is targeting rapid subscriber growth over profitability in the short term but will benefit long term from the high lifetime value smartphone users it is adding on now.”
T-Mobile’s new customer additions for the quarter are the highest seen so far among Tier 1 competitors, wrote Costa. “T-Mobile’s long-term initiatives, including its LTE network build, Un-carrier strategy and the addition of MetroPCS will help the operator improve its financial and subscriber position in 2015.”
In addition, the company will be freer to continue its growth objectives “without the pressure and distraction of a possible buyout looming,” he wrote.
T-Mobile had been the apparent target of several merger attempts earlier this year. Earlier in October, French telecommunications company Iliad announced that it had ended its acquisition attempts for T-Mobile, while in early August Sprint dropped its own plans to buy T-Mobile after the move was opposed by regulators, according to reports. Sprint had been rumored for months to be seeking a merger with T-Mobile so that the two struggling companies could join together and fight harder to compete with mobile powers Verizon Wireless and AT&T. Iliad wanted to buy T-Mobile US to bolster its global aspirations.
T-Mobile’s two key competitors, AT&T and Verizon Wireless, recently announced their own financial results.
AT&T reported gaining 2 million wireless customers in the third quarter, which helped drive up the carrier’s wireless sales 5 percent and overall revenues by 2.5 percent from the same period last year. AT&T said it generated $33 billion in revenue in the third quarter, with $18.3 billion of that coming from the carrier’s wireless business, while net income came in at $3 billion, down from the $3.8 billion in the third quarter of 2013.
Verizon reported $31.59 billion in overall revenue in the third quarter of 2014, ending Sept. 30, up 4.3 percent from the $30.3 billion posted in the same quarter one year ago, while its wireless unit captured another 1.5 million customers who will add more revenue to the company’s bottom line. Quarterly profit for Verizon came in at $3.7 billion, compared with $2.23 billion that was posted for the same quarter one year ago.