How Much Did T-Mobile’s Customer Base Increase in 1Q16?
T-Mobile: Will "Binge On" and the AT&T Deal Spur Growth?
Growth opportunity for T-Mobile
T-Mobile (TMUS) has the fastest-growing postpaid subscriber base among the top four US wireless carriers, which also include Verizon Communications (VZ), AT&T (T), and Sprint (S). At the recent J.P. Morgan Global Technology, Media, and Telecom Conference, J. Braxton Carter, the wireless company’s chief financial officer and executive vice president, highlighted a key growth area in the future for the company in the saturated US wireless space.
Carter said, “We’re going to expand distribution to 30 million to 40 million additional POPs this year. And those are locations where we are significantly under index in penetration. Actually, our penetration in those distribution expansion markets is close to zero.” He also mentioned, “On suburban, we’ve under indexed in, roughly half the penetration that you see in the major urbans. And now we have this new geographical distribution expansion, where we have tremendous potential and there is no reason very quickly that we can’t significantly penetrate that.”
Growth of T-Mobile’s postpaid subscriber base in 1Q16
T-Mobile’s US postpaid customer base has been growing significantly compared to those of its peers. In 1Q16, its postpaid customer base increased ~15.6% YoY (year-over-year) to ~32.7 million customers.
In the same quarter, the postpaid subscribers of Verizon Communications and AT&T increased by ~4.4% and ~1.3%, respectively, on a YoY basis. By the end of the quarter, Verizon Communications and AT&T had ~107.2 million and ~77.1 million postpaid subscribers, respectively. Sprint’s (S) postpaid subscriber base grew by ~4.2% YoY to reach ~31 million in the same quarter.
You might consider diversified exposure to T-Mobile’s stock by investing in the PowerShares QQQ ETF (QQQ). QQQ had ~0.6% of its holdings in the wireless telecom company at the end of April 2016.
In the next part of this series, we’ll discuss T-Mobile’s Binge On offering.
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