Analyst: T-Mobile likely gained most subs in Q3 and AT&T fared poorly, based on social media mentions of switching

Apple's (NASDAQ: AAPL) introduction of the iPhone 6s and 6s Plus last month reignited a switching war among Tier 1 carriers for iPhone customers in the waning weeks of the third quarter. According to a new report from MoffettNathanson analyst Craig Moffett, which analyzed data on social media provided by the firm Comlinkdata on customers switching, T-Mobile US (NYSE:TMUS) performed the best while AT&T Mobility (NYSE: T) fared the worst, with Verizon Wireless (NYSE: VZ) and Sprint (NYSE: S) somewhere in the middle.

According to Moffett, Comlinkdata uses proprietary natural language processing technology to refine large social media data streams into 10,000 actionable wireless customer conversations per day, reflecting the opinions of both switchers and non-switchers. Using the data, Comlinkdata can observe not just whether people are switching but their reasons for doing so and opinions about the wireless market.

Moffett examined the spread between indications of customer switching both to and from individual carriers, but he noted in the report that he is merely looking at what is trending on social media. There are inherent limitations in extrapolating too much from such a survey. A variety of factors can skew the results away from what the carriers actually wind up reporting this quarter, Moffett noted, including the demographics of a carrier's customer base and the fact that social media tends to bias toward younger and more urban customers.  

Nevertheless, Moffett said that "by calculating the difference between customers mentions of 'switching to' and 'switching from' a given carrier, Comlinkdata has in the past proven able to draw helpful anticipatory conclusions and what was ultimately as net growth momentum for each operator."

The data from Comlinkdata for the third quarter shows that T-Mobile continued its momentum, performing the best in terms of net share gains, while AT&T fared the worst, performing second to last in net "win" share and second to worst in net "loss" of customers. Verizon was narrowly positive while Sprint was narrowly negative.  

Interestingly, the data also show that relative to their respective postpaid customer bases, T-Mobile is actually punching above its weight in terms of positive social media mentions, while AT&T is punching below its weight, given its larger customer base.

What does this mean for the carriers' actual subscriber performance?  T-Mobile CEO John Legere said in mid-September that T-Mobile had already exceeded the total net customer additions it reported for the second quarter, when it had 2.1 million. Speaking at the Goldman Sachs Communacopia Conference Sept. 18, Legere said that with 12 days still left in the third quarter T-Mobile had already matched the number of branded postpaid net customer additions and branded postpaid phone net customer adds it had in the second quarter, which were 1 million and 760,000, respectively.

Moffett expects T-Mobile will add more than 1 million net postpaid customers in the third quarter and more than 840,000 postpaid phone customers in the period.

AT&T said in September it expects 2 million total wireless net adds in the third quarter and to report "positive branded voice net adds in the quarter." Moffett noted that branded voice is retail postpaid and prepaid combined, and that social media suggests AT&T lost postpaid handset customers in the third quarter.

Sprint CEO Marcelo Claure said in September that the company has added postpaid handset customers for four months straight through August. Moffett noted that Wall Street's consensus forecast is for Sprint to add 56,000 postpaid phone customers in the third quarter, but he thinks Sprint will actually report a loss of 24,000 such subscribers.  

For more:
- see this MoffettNathanson report (sub. req.)

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