T-Mobile CEO John Legere reveals investment strategy

T-Mobile network plansTelecom operator T-Mobile announced addition of 1.1 million new customers, 11 percent growth in service revenue, 46 percent rise in net income and 14 percent increase in capital expenditure in Q1 2017.

T-Mobile’s Q1 revenue growth was supported by its investment in networks. Capital expenditure (Capex) of T-Mobile increased 14 percent in Q1 2017 to $1.5 billion. T-Mobile Capex for 2017 will be unchanged at $4.8 to $5.1 billion.

For comparison, capital expenditure of Verizon was $3.1 billion in Q1 2017.

“Q1 was no different with T-Mobile again producing the best customer and financial growth in the industry. Add to that our recent success in the 600 MHz spectrum auction and it’s clear we’re just getting started,” said John Legere, president and CEO of T-Mobile.

Technology Business Review, in a report said, T-Mobile will remain the industry leader across key wireless metrics in 1Q17 including revenue growth (+11 percent ), postpaid phone net additions (+798,000) and prepaid subscriber additions (+386,000).

Verizon Wireless has lost 307,000 retail postpaid connections including 289,000 phone users in Q1 2017.
T-Mobile 4G speed

T-Mobile growth strategy

T-Mobile has developed a winning formula built around listening to customers and solving their pain points.

T-Mobile has launched 13 Un-carrier moves including the elimination of service contracts, ending overages, enabling upgrades anytime, free international data roaming in over 140 countries and destinations, unlimited music and video streaming, and offering all unlimited data plans with taxes and fees included.

Steve Vachon, analyst at TBR, said: “The launch of competing unlimited data programs had a minimal impact on T-Mobile’s performance despite competition from all Tier 1 competitors offering unlimited data programs.”

T-Mobile has a total customer base of 72.6 million. But it is still behind AT&T and Verizon Wireless in the US telecom market.

Service revenue of T-Mobile increased 11 percent to $7.3 billion. Total revenue increased 11 percent to $9.6 billion. Net income of T-Mobile increased 46 percent to $698 million.

Branded postpaid phone Average Revenue per User (ARPU) was $47.53 (+2.9 percent) primarily due to benefits from Data Stash, a net positive impact from the T-Mobile ONE rate plans, inclusive of Un-carrier Next, and the MVNO Transaction.

Branded prepaid ARPU was $38.53 (+2.5 percent) thanks to growth of MetroPCS customers, a de-emphasis of T-Mobile legacy prepaid products and a decrease in certain customers that had lower average branded prepaid ARPU.

In addition to 1.1 million total customers, T-Mobile added 798,000 branded postpaid customers and expects to capture over 250 percent of the industry’s postpaid phone growth. MetroPCS helped in the addition of 386,000 prepaid customers.

T-Mobile investment focus

T-Mobile recently purchased 31 MHz of 600 MHz low-band spectrum covering 100 percent of the U.S. for $8 billion or $0.83 per MHz / POP.

T-Mobile will use this spectrum to strengthen existing LTE coverage and increase capacity to meet customers’ demand for mobile data.

Verizon said traffic on LTE increased about 57 percent.

T-Mobile expects that at least 10 MHz covering over one million square miles will be clear in 2017 and it will use the new spectrum for the benefit of T-Mobile and MetroPCS customers later this year.

T-Mobile now has significantly more low-band spectrum per customer than any other major provider and nearly triple the low-band spectrum per postpaid customer compared to Verizon.

T-Mobile, which provides 4G LTE coverage to 314 million people, is targeting to provide 321 million people with 4G LTE coverage by year-end 2017.

T-Mobile has substantially completed the deployment of its 700 MHz A-Block spectrum with the recent launch of Chicago. Extended Range LTE is now live in over 530 market areas covering 269 million people. It plans to open 3,000 stores in 2017, including 1,500 T-Mobile stores and 1,500 MetroPCS stores.

T-Mobile used approximately 71 percent of then-owned spectrum for LTE compared to 54 percent in Q1 2016. T-Mobile will re-farm spectrum currently committed to 2G and 3G technologies. Re-farmed spectrum enables T-Mobile to continue expanding Wideband LTE, which currently covers 235 million people.

T-Mobile will deploy and expand new technologies like VoLTE, Carrier Aggregation, and 4×4 MIMO that have delivered material capacity benefits to both customers and the T-Mobile network.

Baburajan K
[email protected]