T-Mobile talks a big game, but indeed, it was the leader in postpaid phone net adds during the third quarter, posting 854,000 compared to the 708,000 that AT&T reported last week.
Verizon wasn’t anywhere near those two, having added just 8,000 postpaid phone customers; it reached that number when gains of 197,000 in the business division offset losses of 189,000 on the consumer side.
T-Mobile boasted a number of other metrics as well: postpaid phone churn of 0.88%, postpaid net customer additions of 1.6 million – more than AT&T and Verizon combined – and high-speed internet net customer additions of 578,000, most of which use fixed wireless access (FWA) technology.
In fact, CEO Mike Sievert said he believes T-Mobile had more new high-speed internet customers signed up during the quarter than AT&T, Verizon, Comcast and Charter combined for the second quarter in a row. T-Mobile now serves more than 2 million high-speed customers, which wasn’t even a segment that the company served a year and a half ago.
For the quarter, T-Mobile reported service revenues of $15.4 billion and net income of $508 million. Adjusted EBITDA was $6.7 billion, up 11% versus a year ago.
On the network side of the house, Sievert highlighted that they just completed the final piece of the Sprint network integration. By the end of the third quarter, they had decommissioned substantially all of the Sprint macro sites they wanted to decommission, more than a year earlier than originally planned.
T-Mobile’s Ultra Capacity 5G, which is largely based on the 2.5 GHz spectrum it obtained through Sprint, now reaches 250 million Americans. “Today, we’re already where Verizon hopes to be more than two years from now,” Sievert said, referring to Verizon’s C-band deployment plans.
Of course, T-Mobile also recognizes that there are some areas where it just doesn’t make sense for a terrestrial wireless operator to offer service, and that’s why it struck the deal it did with SpaceX to combine a slice of T-Mobile’s mid-band spectrum that’s already compatible with customer devices with next-gen satellite technology from SpaceX. The goal is to be able to connect T-Mobile customers anywhere they can see the sky, he said.
“It has long been established that T-Mobile is the 5G leader, but with the rapidly growing adoption of 5G by consumers and businesses, we’re now seeing that 5G lead translate into overall network leadership,” Sievert said in prepared remarks.
Growth in business segment
Rivals Verizon and AT&T both said during their earnings calls that things are going fine in the segments of their companies that target the business sector, and T-Mobile is saying the same thing, so the question is: How can it be going fine for everybody?
T-Mobile Business Group President Callie Field said she can’t speak to what’s happening at the other two, but she does see the total addressable market expanding. “We see work from home as a category expander,” she said, noting that IoT and private networks are also part of the growth story.
T-Mobile is seeing double digit growth in the small and medium-sized business segment quarter over quarter, and in the most recent quarter, they saw a lot of growth in automotive and airlines, he said. She ticked off some recent wins: Ford, Boeing, Delta, Tractor Supply, the IRS and Chicago Police Department, to name a few.
Sustainable growth?
The industry’s continued trend of net phone additions begs the question of where they’re coming from when nearly everyone has a phone. But T-Mobile, coming from a position where it had poor coverage for many years and is now turning that around in 5G, can talk about reaching underpenetrated markets that it never was able to capture in previous iterations, including rural areas and the business segment.
Ultimately, industry growth will normalize, said CFO Peter Osvaldik. “That continues to be in our plans,” he said.
“The differentiator for us is that not only do we have the tremendous combination of the value proposition and our fame for value and the 5G network leadership that is turning into overall network leadership, but it’s also those two things combined with the tremendous growth opportunities that are again differentiating for us,” Osvaldik said. “For us, we believe we’re going to continue to take share … The proof is in the results.”