T-Mobile US (NYSE:TMUS) added 760,000 branded net customers in the month of August, which was its best month ever in terms of postpaid net adds, according to CEO John Legere. The brash and outspoken T-Mobile chief said that while the company is open to a deal with another player to gain more scale, it has a great deal of momentum already.
"We had our biggest net add postpaid month in the history of the company in August," with 552,000 postpaid net additions, he said. The company also had 208,000 prepaid net adds in August, he added.
"I think you get the gist--the company is on fire. It's going extremely well," Legere said, speaking with CFO Braxton Carter and CTO Neville Ray at the Goldman Sachs Communacopia Conference.
To put those numbers in context, T-Mobile added 672,000 branded net customers in the full third quarter of 2013, and had 1.01 million branded net subscriber additions for the entire second quarter of 2014.
At the end of July, T-Mobile launched a promotion through Sept. 30 giving customers who sign up for its Simple Choice plan four smartphone lines with unlimited voice and texting and up to 10 GB of LTE data, or 2.5 GB each, for $100 per month. However, customers who sign up for those plans will only be able to take advantage of the offer until Jan. 2, 2016. After that date, customers will be reduced to 1 GB of data per line.
Legere said that promotion has been successful, but noted that the company continues to gain steam from its overall "uncarrier" positioning. "The brand has tremendous momentum," he said. "Everything we do that is an uncarrier move, we do forever."
"I think the trickery that is coming in from the other guys is not resonating with folks," Legere added.
Legere said the company's MetroPCS prepaid brand is "on fire." He also took a shot at AT&T Mobility's Cricket prepaid brand, and specifically the company's new advertising since launching as the "new Cricket" this spring. He said the ads are cute but not informative and are "sort of like the Aflac duck of wireless commercials."
T-Mobile said 80 percent of its customers were on no-contract Simple Choice plans at the end of the second quarter, and that it continues to expect 85 and 90 percent of its branded postpaid customers to be on the plans by the end of 2014. Those plans generate lower average revenue per user, but Legere indicated that starting next year T-Mobile expects to see increases in ARPU, perhaps by charging more for higher data usage.
"We are going to expand data monetization," he said. "But we're doing it because we're giving things to customers that expand their belief in T-Mobile." He noted that T-Mobile's decision to zero-rate the data charges for multiple streaming music services is a perfect example of that.
Legere said his goal is to continue to grow T-Mobile's business. "I want five [more] market share points," he said.
"Yes we will continue to launch uncarrier pain points," he said. "It's still surprising to customers when you have an announcement and it's not about price."
T-Mobile and Sprint (NYSE: S) ended planned merger talks last month amid intense opposition from regulators, and T-Mobile has also rejected as too low a $33 per share, $15 billion offer from French carrier Iliad for 56.6 percent of the company. Legere said he knows the company is a potential takeover target but that T-Mobile has options.
"We take the interest in T-Mobile--which isn't just them [Iliad], it's many different companies--as flattering," he said. "I think that will continue."
"What we are doing, we are constantly looking at multiple paths," Legere continued. "One is a very strong, vibrant, standalone business. We also look at the various trends in the industry and ways that we could do things inorganically." He said T-Mobile might partner or combine with another company to add scale, but did not give any indication about what those deals might entail.
"We're playing from a position of strength," he added.
Legere noted that the company has raised nearly $3 billion in debt to fund spectrum purchases, most likely in the AWS-3 auctions scheduled to begin Nov. 13. T-Mobile is also starting to deploy its 700 MHz A Block spectrum, according to Ray.
Ray disclosed at the conference that T-Mobile has purchased more A Block spectrum covering another 9 million POPs, but he did not say how much T-Mobile paid or which company or companies it purchased the spectrum from.
T-Mobile recently paid $50.5 million to get A Block spectrum covering 8.7 million POPs from a variety of companies, including CenturyLink subsidiary Actel, and I-700 A Block LLC. Those purchases were designed to augment the A Block spectrum it purchased from Verizon Wireless (NYSE: VZ) for $2.4 billion covering 158 million POPs.
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