While many people would like to forget 2020, T-Mobile is gloating over its postpaid net additions of 5.5 million for the full year, including postpaid net customer additions of 1.6 million in the fourth quarter.
The number of net additions for 2020 is the highest ever for the company, and while T-Mobile CEO Mike Sievert acknowledged Wednesday that it wasn’t exactly a slow news day, they couldn’t resist letting the world know about their preliminary results, including surpassing its network goals for the year.
“We smashed our 2020 network goals,” he said during a Citi investor event, noting that everything depends on its network goals and synergies flow from them.
Last year, T-Mobile said it would surpass 100 million people covered with its “Ultra Capacity” 5G by the end of the year, the most “audacious goal” ever for the company, he said. Its Ultra Capacity 5G, which refers to services enabled by its mid-band and millimeter wave spectrum, now covers 106 million people, with the goal of covering 200 million by the end of 2021.
Right now during the pandemic, churn is low across the industry, and while T-Mobile benefits from a high switching environment, it managed to deliver solid results. T-Mobile reported 1.7 million total net additions and 824,000 postpaid phone net additions.
“News is sinking in about our emerging network leadership,” and both enterprises and consumers are responding to that, he said.
One trend he cited: Postpaid is growing at the expense of prepaid, as more people join family plans who may have previously been on separate prepaid accounts. T-Mobile’s prepaid net customer additions were 84,000 in the fourth quarter of 2020 and 145,000 for the full year 2020. In 2019, it reported 339,000 prepaid net additions.
“We continue to put pressure on the industry,” and go after customers of rivals AT&T and Verizon, as well as cable. “It’s a mixture of things,” Sievert said.
Sievert noted that legacy T-Mobile went from being the highest churning brand in the industry to one of the lowest, and now it’s going to apply the same playbook to the Sprint integration. In the most recent results, churn was almost flat to what standalone T-Mobile was a year ago, and that’s after bringing Sprint’s traditionally high churn into the fold.
T-Mobile’s postpaid phone churn was 1.03% in the fourth quarter of 2020 and 0.90% for the full year 2020. T-Mobile's postpaid phone churn was 0.90% for the third quarter of 2020. Sprint’s churn was about 2% a year ago.
Meanwhile, it continues to make progress in deploying 5G using the 2.5 GHz spectrum acquired from the Sprint transaction. Speeds across its low-band Extended Range 5G network, which covers 280 million people, are about double what LTE delivers on average in the industry, according to T-Mobile President of Technology Neville Ray.
However, speeds on the Ultra High capacity 5G mid-band layer, primarily delivered via the 2.5 GHz spectrum that came with the Sprint transaction, are approaching 300 Mbps, versus the 40 Mbps range that LTE offers today, he said.
He also provided an update on the amount of Sprint traffic now using the T-Mobile network, which is more than 20%, up from the 15% revealed during the last earnings call. That represents just over 4 million legacy Sprint customers who are now spending most of their time on the T-Mobile network.
With another wave of the pandemic hitting many cities, about 300 T-Mobile stores are closed due to stay-at-home orders and other reasons, Sievert said. He expects widespread vaccinations by the middle of the year and a lot of the dynamics in the market, including the muted switching environment, will abate.