T-Mobile will again lead the industry in postpaid phone growth by a wide margin—it’s just not going to do it as widely as previously expected, according to Wells Fargo Securities analysts.
Citing a softer gross add environment in the first quarter, as well as a delayed tax refund season and the Samsung Galaxy launch being pushed into the second quarter, the analysts lowered their first-quarter 2017 postpaid net add number to 850,000, down from the prior estimate of 897,000.
Analysts at Jefferies recently lowered their postpaid net add expectations for T-Mobile as well, from 800,000 down to 720,000, citing a more muted pace of churn improvement. They also lowered their estimates for prepaid net adds from 750,000 to 525,000 due in part to “perceived improvements at Sprint.”
But T-Mobile is hardly being singled out. With fierce competition heating up around so-called unlimited plans, analysts at both firms lowered expectations for Verizon, AT&T and Sprint as well. Wells Fargo recently lowered postpaid net addition expectations for Sprint to 20,000, and it expects AT&T and Verizon to report negative phone additions despite the launch of unlimited plans.
“We believe TMUS will again lead the industry in postpaid phone growth by a very wide margin,” the Wells Fargo analysts wrote in a research note Tuesday.
T-Mobile and Sprint announced unlimited plans almost simultaneously in August, prompting the nation’s two largest carriers to respond during the first quarter of 2017. AT&T made its unlimited plan available to all customers in February after previously limiting them to DirecTV subscribers, and Verizon finally announced an unlimited plan in a reversal of its longstanding policy to avoid all-you-can-eat offerings.
To be sure, T-Mobile is reaping the benefits of its "uncarrier" strategy. For the fourth quarter of 2016, T-Mobile posted 2.1 million total net customer additions, marking its 15th straight quarter of more than 1 million total net customer adds and bringing its total user base to 71.5 million. Branded postpaid phone churn was 1.28%, down four basis points sequentially and down 18 basis points year over year.
The operator reported 1.2 million branded postpaid net additions, 933,000 of which were phone net additions.
Carriers will begin to announce their first-quarter results later this month, with Verizon scheduled to post its earnings April 20 and AT&T to release its earnings on April 25.