T-Mobile, Sprint Continue to Battle Over No. 3 Spot in U.S. Market

T-Mobile continues to add new customers in recent quarters and is now claiming to have overtaken Sprint for the No. 3 spot in the U.S. mobile market.

T-Mobile, Sprint, Verizon, AT&T, mobile carriers, smartphones, John Legere

T-Mobile just added 1.8 million new contract customers in the first quarter of 2015, giving it a total of 56.8 million customers, which surpasses the 55.9 million customers reported by Sprint back in February. That means that right now T-Mobile apparently is in sole possession of third place in the U.S. mobile market among the big four carriers when ranked by contract customer numbers, a category that is led by Verizon Wireless and AT&T, respectively.

For T-Mobile and Sprint, which have been fighting for market share behind Verizon and AT&T for a long time, the rivalry has increased in recent months as T-Mobile CEO John Legere (pictured) has often boasted about how his company has or would soon surpass Sprint to take over the No. 3 spot. Legere made such comments during a recent earnings call and at a press event in New York in March.

Yet while the momentum in the customer race may have swung to T-Mobile for now, that could all change again on May 5 when Sprint unveils its fourth-quarter 2014 financial results and also announces how many new customers it has gained since February.

So what's this all mean for consumers and business users as these two carriers battle it out for bragging rights?

Maybe not too much, independent mobile analyst Jeff Kagan told eWEEK.

"The bottom line is that it doesn't really matter if one is ahead of the other by a little bit," said Kagan. "What does matter is that Verizon and AT&T are the top two and are very close to each other, while Sprint and T-Mobile are also very close to each other. You have to look at who will be growing."

For T-Mobile, a good growth track began last year, while Sprint began a true growth track this year, said Kagan. "If T-Mobile is growing, then Sprint can do it, too."

T-Mobile's Legere has certainly been talking since 2014 about how his company would eventually overcome Sprint in the rankings, said Kagan, which is something that can make CEOs feel good to say. "We'll see what happens at the end of the year."

One problem for T-Mobile, however, is that while it is growing customers rapidly, it is losing money, he said. "They have made moves to gain market share, but they can't continue to lose money long term. The question is, just what is long term? I don't know how they are going to keep it up."

Legere insists that T-Mobile "will keep it up until they take over the world," said Kagan. "But everyone else is [growing] too, so they are not going to take over the world."

Eric Costa, a mobile analyst with Technology Business Research, said the current numbers showing T-Mobile taking over the No. 3 spot could continue unless Sprint announces more than 900,000 total net new customers on May 5 during its earnings call.

"In terms of total retail subscribers (prepaid and postpaid), T-Mobile still trails by about one million customers to Sprint, but will likely overtake them in this category later in 2015 as T-Mobile's Simple Choice plans have brought in over one million retail net additions in each of the past five quarters," said Costa.

Another analyst, Rob Enderle, the principal of Enderle Group, told eWEEK that "T-Mobile has been the most aggressive with regard to customers and even my wife ditched AT&T for T-Mobile this year."

For corporate users, they worry most about having service from bigger companies that they can trust will be there long into the future, said Enderle. "The bigger you are, the more likely you are to survive, and corporate users do care about the survival part. Otherwise, it showcases that with this kind of movement the grass is actually greener on the T-Mobile side as customers vote with their wallets."

Earlier this week, T-Mobile reported mixed financial results for the first quarter of 2015, with a 13.1 percent revenue increase to $7.78 billion, but a loss of $63 million compared with the same quarter one year ago, according to an eWEEK report. At the same time, the company reduced its customer churn rate to a T-Mobile record low rate of 1.3 percent. The April 28 earnings announcement was a bit of a contrast to the company's fourth-quarter 2014 earnings results that were announced in February, when T-Mobile raked in a profit of $101 million and Q4 revenue of $8.15 billion.

Overall, at the end of Q1, T-Mobile had 56.8 million total customers, up from 49.1 million customers one year ago, according to the company. In the first quarter, T-Mobile sold 8 million new smartphones to customers, which was an increase of 16 percent over the same quarter one year ago.

Sprint saw its third-quarter 2014 net loss more than double to $2.4 billion, up from a net loss of $1.04 billion for the same period one year prior, back in February, according to an earlier eWEEK report. Sprint added some 967,000 new wireless customers in Q3, but the company's net operating revenue fell by 1.8 percent to $8.97 billion, down from the $9.14 billion that was received for the same quarter one year prior.