T-Mobile CEO John Legere

T-Mobile posted its second quarter earnings today, and the main takeaway is that the carrier is continuing momentum as far as customer acquisition is concerned. The Uncarrier managed to add an additional 1.5 million customers in the second quarter, which makes it the fifth consecutive quarter in which the carrier added more than 1 million subscribers. The number sees T-Mobile crossing 50 million total subscribers for the first time.

Of the 1.5 million new additions, 908,000 were postpaid customers. To put that number into context, Sprint announced that it lost 245,000 subscribers this quarter, while AT&T and Verizon added 1 million and 1.4 million customers respectively.

The influx of new customers meant that T-Mobile's revenue rose by 15.4 percent to $7.2 billion, with an operating profit of $391 million. The carrier has mentioned that it has successfully rolled out VoLTE nation-wide within two months of the service's launch in Seattle. The service currently has 2.8 million customers, and T-Mobile is actively looking to add more in the coming months.

T-Mobile is also rolling out Wideband LTE and has mentioned that it is equipping sites with 700 MHz gear as well as testing devices compatible with the spectrum, which the carrier acquired earlier this year.

Overall, it looks like the Uncarrier initiative is working in T-Mobile's favor, as the carrier has just been ranked the highest amongst all four major cellular providers in the US in customer service.

Source: T-Mobile


Reader comments

T-Mobile posts strong Q2 revenue, adds 1.5 million new customers


If you had bothered to read the actual press release (conveniently linked below the article), you would know those 1.5 million customers are *net* additions. But don't let that stand in the way of your trolling efforts.

It's very plain and simple since June 2012 Tmobile has been the BEST carrier in the carrier game with the best plans and wonderful products.
I've had em all with different handsets since 2009 I am on Tmobile to stay nothing else matters today
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T-Mobile, yes the Underdog but making ALL the right Moves!! Many C0ngratulations to them for continuing success and more importantly passing the 50 Million customer mark, quite impressive indeed. Sprint must be shaking in their boots, desperate to scoop up an actual Winning company instead of trying to compete with what they have.

Wow, sprint lost 2/3 of the population of the United States in a quarter? That's rough.... ;-)

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Too bad they're killing the principle of net neutrality with their music streaming deal

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Not really since no money is being exchanged. T-Mobile is basically giving you free data to stream music.

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You're included if your on Pay in Advance. You're only excluded if you're on Pay as you go or Pay by the day.

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Does anyone besides foreigners use the pay by the day type of plans though? There are much cheaper options of pay as you go if you don't need data and only need minutes and text messages.

Pay by day is probably for foreigners and people who only want to tryout T-Mobile for a day or two.

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Good to know! I remember the news stories when it came out indicating that it only applied to the Simple Choice plans. Now it looks like it applies to my $30 plan, and I'll have to give it a shot!

Now, for Un-Carrier 7.0, maybe they can make the same apply to video streaming!

I know, I know... just a wish and a dream! And I'm sure that even if they did, it wouldn't apply to my Plex streaming from home.

True it would probably be just Netflix, YouTube, etc. But if they do they're total subscribers will probably go past sprint next quarter.

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So tmobile is not treating all Internet traffic the same is my point. It puts smaller music startups at a disadvantage because they're usage is not exempt from data caps when customers use their phones to listen. Thus the mainstream Pandoras and Slackers etc get a boost in customers and don't even need the kickbacks.

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Having music streaming exempt from your data cap has nothing even remotely to do with net neutrality.

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Why not? If the concept is to treat all data equal, then not paying for certain types of data would fall into that category yes? Streaming music burns a ton of data, and if I was on T-Mobile which streaming services counted towards my data cap would most likely not be used. Just because you like the policy does not make it any less against data equality.

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I'm not even a T-Mobile customer. But letting the data flow on streaming music for their customers doesn't really take away from anything else. And like a previous commenter said, there's no kickbacks happening. It's strictly between the provider and the customer.

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It doesn't need to have kickbacks to violate the principle. Some Internet traffic is being given an advantage over others because it doesn't count towards people's data caps

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The bits are routed the same, but the cost to the consumer is shifted, now the mainstream music providers hold the trump cards because it is free to listen to them and not the smaller providers. It's a sneaky way of doing it, but it is harming competition.

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No, Net Neutrality is where companies pay telecoms or ISPs money to allow them more bandwidth for their service(I.e. Netflix paying Verizon to allocate more bandwidth for their service), thus lowering the available bandwidth for services that are not paying the fee.
Net neutrality has nothing to do with the end user not having certain services count against their data caps.
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Net neutrality is actually the concept that all Internet traffic should be treated equal by ISPs. Not the erroneous kickback definition you refer to

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You are expanding it beyond the definition. It's about not giving priority to specific traffic. T-Mobile is not giving priority to specific traffic.

They aren't doing it in terms of the speed that the data flows through the network, they're doing it by manipulating what counts towards a data cap. Still treating the traffic differently and creating a tiered system my friend, whether you like it or not.
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T-Mobile already set the goal by the end of the year is to include all music streaming apps. However, they chose the most dominant ones to pair with first in order to address as many subscribers' needs as they could upon announcing this program.

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So tmobile is not treating all Internet traffic the same is my point. It puts smaller music startups at a disadvantage because they're usage is not exempt from data caps when customers use their phones to listen. Thus the mainstream Pandoras and Slackers etc get a boost in customers and don't even need the kickbacks

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It is treating all traffic the same from a routing and speed perspective. It's billing policy is completely another matter and not related to net neutrality.

They aren't doing it in terms of the speed that the data flows through the network, they're doing it by manipulating what counts towards a data cap. Still treating the traffic differently and creating a tiered system my friend, whether you like it or not

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This has nothing to do with Net Neutrality. Net Neutrality is where all data is considered equal, ie, my company website has as much bandwidth available to it as a huge streaming service like Netflix. Where Net Neutrality argument comes in is, the FCC wants to allow large companies, like Netflix, to pay telecoms and ISPs a fee, so that they can have more available bandwidth, thus lowering the bandwidth available to websites that are not paying.

This is just T-Mobile allowing certain services to not count against your data cap, there is no money being exchanged (as far as I know), and no extra bandwidth is being made available to those certain services over a service that is not included (this I do know).

So, next time do a little research, instead of spouting nonsense.

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I disagree, and the comparison to ISPs isn't an apples-to-apples comparison here. Most people don't have restrictions on how much data they can use over their home networks, so the net neutrality argument regardding ISPs focuses on throttling data speed, since that's the biggest thing ISPs could use to effect a preferred data system. Almost all mobile users have hard data caps as well, though, so that's something else that mobile carriers can leverage.

On a technical level, you're right; this issue doesn't have anything to do with net neutrality, because T-Mobile's not throttling data speed or giving special access to some traffic over other traffic. But using financial incentives like this will push people away from music streaming services that aren't on the "free data" list and toward services that are, just as surely as throttling data for Spotify but allowing Beats full data speed would push consumers away from Spotify and toward Beats.

Basically, I don't look at net neutrality as being only a matter of data speed and restricted vs. privileged access. I see any action by a provider that sets up preferred vs. restricted tiers of content, and whether or not that's T-Mobile's intent here (and I really don't think it is), giving customers a list of streaming services they can use without impacting their data allowance does exactly that.

You are essentially saying that a company involved in getting you the bits should never be able to have a cross-promotion with a service that provides content, even if that promotion doesn't affect the deliverability of the bits from competitors. That doesn't make much sense. It would be like saying that by picking KitKat as its product code name, Google was unfairly impacting other candy providers.

Yeah it really sucks getting something for no additional charge. How do T-Mobile customers put up with that? Such an outrage.

I have been with T-Mobile for a year now and I can actually say that I'm happy with my telecom. Strange, but true. Other members of my family have switched as well and most are just as happy.

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The only mergers I see for T-mobile actually happening are T-mobile buying US Cellular, which would vastly improve their rural coverage, or DishNetwork buying out T-mobile and allowing them to use their nearly nationwide 700 MHz E block spectrum

You do not want Dish to buy T-Mobile by any means. You think that Sprint would drag T-Mo down, Dish would turn it into either spare parts or At&T.

I prefer the US Cellular option to Dish or Sprint. Can I ask why Dish worse than Sprint? I've never had Dish before.

US Cellular would not be a great option because they are so regional. They use VZW and Sprint for their "Nationwide coverage" and you can be assured that that agreement would expire and not be renewed. They only have about 4M customers of their own.

Dish has been charged and settled a few lawsuits, from states, for deceptive business practices. The founder has 90% of the voting rights in the company and decides everything (see link below for what an ass he is). Dish also has convoluted its contracts, has huge EFT fees, and is very aggressive with its sales tactics.

It is one of the most hated companies both by its employees and its customers

http://www.atg.wa.gov/pressrelease.aspx?id=23424#.U9pV0fldXeI -- Deceptive business

http://www.businessweek.com/articles/2013-01-02/dish-network-the-meanest... --CEO

http://www.fool.com/investing/general/2014/01/28/dish-network-continues-... -- hated company

Thanks for that information about Dish, that merger would be bad.

Doesn't US Cellular have good rural coverage though? I agreed for the US Cellular because it would help get T-Mobile rural coverage.

Most of their coverage is from Verizon and Sprint (USCC is CDMA) so no it would not really help T Mobile at all.

When you factor in that USCC only has 4 Million customers, is CDMA (not that big a deal), is based primarily in the midwest, has been selling off it spectrum to pay the bills and a few other factors, it makes very little sense for T Mobile to go that route.

Wish they had coverage where I live. Hopefully they continue to expand their network with their profits.

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The rollout of the 700MHz spectrum is going to be a big deal, both in terms of coverage range and building penetration. I live in the middle of a big city, but my house is old and may as well be a fallout shelter for all the signal I get indoors. AT&T is my only option at the moment, but T-Mo will probably get my business once they roll out the low-frequency equipment in Philly.

Except many people, including me in a 1.7 million person multi-city area, will not have 700Mhz because they are not going to roll it out here, which SUCKS :(

Only people on US cellular and C-spire now I believe for carriers in more than one state.

Everything else is an MVNO which just hops on one of the Big 4s networks. Examples straight talk, net10, walmart family mobile, brightspot mobile, republic wireless, etc.

It's target's T-mobile MVNO.

They have some terrible rates, the only plan they have that is any good is their $35 300 minute, 3 GB, unlimited text HSPA+ only for now. Paying $25 back in gift cards for every 6 months of service.

Any of their unlimited talk and text plans you'd be better off with MetroPCS for the same service.

I am so happy for tmobile, as long they keep on treating their customer the way they are i will be with them for a long time to come, congratulation Tmobile.

Yay T-mobile! Now do me a favor and DO NOT merge with Sprint (unless you just absorb them and do not deviate from the current Uncarrier trajectory - then it is ok)

I hope sprint tries to buy them then has to pay a breakup fee like AT&T did.

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I had to call TMo yesterday to switch plans to the "new" 4 for 100 plan....I was shocked how excellent and helpful their Customer Service rep was.....I am not kidding. I haven't had that kind of phone Customer Service in, like, Never. So they are definitely doing all the right things, and I hope they keep on building out their network because it may be the deals that get people to switch but it will be the service on the network which will keep people with TMo. So far I am greatly satisfied, switched over from Sprint in October 2013.

I just love how fast they pick of the phone. When I was on AT&T I would sometimes be on the phone for 45 minutes before someone picks up. With T-mobile less than 10.

Yeah, people complain terribly about AT&T's customer service, but in all the years I had them, I was consistently very happy both with their reps' competence and with how I was treated. YMMV, obviously, but I never had a problem.

If the merger goes through I hope that Tmo takes over for the customer service form Sprint then.

I only have dealt with Sprint and Verizon and it is night and day. Sprint is terrible in comparison. I do not have to deal with Tmo or ATT customer service so I cannot comment overall.

Verizon's customer service wasn't as good as AT&T's, but it wasn't awful in my experience. I never had rude reps, I never talked to anyone who was completely clueless, etc. AT&T reps seemed to be a little better-trained in terms of technical terminology, and the hold times were shorter than with VZW. Those were the only significant differences.

It should be noted that of Verizon's 1.4 million "new" subscribers, that only 300,000 were phone subscriptions, and the rest were tablet activations.

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New activations are activations (and more revenue), regardless of device. But I am sure >90% of those tablet activations are customers adding a tablet to their existing VZW account, and not representative of a huge influx of new customers.

This is all good news, even if T Mobile sucks in my area and just about everywhere I go.

This is just a hype press release, I want to see the whole earnings statement because the most important part is left out. The costs, especially the cost of customer acquisition. That is the one thing that will drag all these gains into the toilet.

I still say this is dressing up a pig to make sure it gets a good price at market.

Just because T-Mobile sucks where you live, doesn't mean it sucks everywhere. You don't have to be all sour grapes about it.

Besides expansion's a good thing, then maybe they can improve their service in your area.

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No sour grapes, I did stat it off with "this is good news" not with "T Mobile sucks".

It really is a hype press release, all positive. I really am glad they are doing as well as they are. It will be that much better when Sprint merges with them. I mean that not as a dig but as a reality. The more customers the two of them have the more they can shake things up.

They have been saying my area is supposed to be expanded/covered for over 5 years, it is a state capital so not the middle of nowhere, and they have not done anything. As typical for T-Mobile they are good in the middle of town but 2 miles outside it is edge.

Okay, then I totally understand your opinion on the whole thing. Sounds a bit like my experience with Verizon in my area actually. I could actually lose all service for phone and data while in my basement, while upstairs has full 4G.
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Don't argue with him, the actually urban part of Harrisburg PA is covered with LTE from T-mobile. they lack coverage in the suburbs and rural parts. He probably lives in one of those towns outside Harrisburg.
He, like most of the other Sprint faithful want T-mobile to be bought up by Sprint for selfish reasons.

No I live less than 2 miles from the center of town and my office is one block from the capital building at 2nd and market.

I have said before that the center of town is fine, but going a few miles away from the capital build drops to crap.

If by for selfish reason you mean having the 3&4 companies merge to cover the faults with both companies then yes I am being selfish. But selfish for everyone.

Sprint is hurting in cities because of the crap bands they have/had (t-Mo is good in big cities) and T-Mo sucks in rural and overall coverage (where Sprint is much better)

It is win win as long as they (combined) continue to buck the trends that Att and VZW has set. They need to keep unlimited, lower prices and all the other moves they have made over the last two years.

JC talking points?

Yes in this case it is. Especially when the two combined will still only be number three. WIthout each other they have flaws that they cannot overcome to even consider contending with ATT and VZW. You essentially have those two dictating the market now and with a strong third you can dictate real change.

In addition, some serious concessions are going to have to be made for the merger to go through. The biggest recipient of those concessions will more than likely be US Cellular which will take them from a FAR distant 5th a decent 4th.

NoNexus: Everything you're saying is correct. Except for the part about the costs of customer acquisition. TMUS actually made it's first profit in more than a year. Subscriber growth is the key. They definitely should merge with Sprint. That is the only way to compete with the faux duopoly. I am a Verizon customer and would not switch unless I absolutely had to.

CCA is essential especially when you are relying on Prepaid and no contract service. Those customers could go away at anytime and leave you holding a net loss. Part of CCA is retention so it is a bit of an ongoing cost.

I know that they made money, and that is great but at what cost? I really think that what they are doing right now is unsustainable. Eventually they are going to have to make cuts (if things continue this way) which will undo everything that they have done so far.

It is a house of cards in that aspect.

But it is unsustainable.

If I borrow 20$ this week and make 10$ I make a profit of 10$ for the week. Eventually the other 10$ will become due and I will go back to losing.

One thing you might not be factoring in here is that TMUS pays no dividend, whereas VZ and ATT pay huge ones. Go look at how much debt VZ and T have. You might be surprised.

That T-Mobile was 8.7 Billion in debt as of the 1st of May? No I am not surprised at all.

Verizon has a debt of roughly 110BN, of which a ton of that was debt from the Vodaphone acquisition which is acceptable and expected. WHen you factor that out, and the fact that they will not have to pay divideds (25BN) to vodaphone, the debt comes down to a manageable level for the number 1 carrier.

You need to take things into perspective and not just look at the numbers.

You don't just factor out debt. I am a VZ customer and wouldn't switch, but you cannot deny that TMUS is causing VZ and T to change their business models. Especially when it comes to phone subsidization. Very soon there will be no more handset subsidization at all in the industry. That is attributable to TMUS. To me, $8.7 billion is more manageable than $110 billion

No you do not throw out debt, but real debt (tmo) and acquisition debt (verizon) are treated very differently. Expecially if you can offset 45ish% of your acquisitional debt in one year, and pay it off within a year and a half (the 60BN that verizon took on with VodaPhone)

Not to mention in the year ending 2013 verizon posted a 7% increase in revenue per customer while Tmo went the other way with a 7% decrease (something in that area, didnt look up the final numbers).

Debt is debt but their are degrees of debt.

Vzw doesn't. They bought out Vodafone. Granted it gave them debt, but that will be made up quickly by not having to pay 25+ bn a year

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I build post and beam houses across the US and I have att and some of the crew have tmobile and verizon to be honest tmobile sucks if you travel alot but if you sit in one place your whole life then tmobile is good.

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Customer acquisition cost is down, most people that took advantage of paying off ETF did so in Q1 when the program was launched. Whether that changes with the launch of the new iPhone, Galaxy Note 4, and Nexus 6 is yet to be seen, although the HTC One M8 and the Samsung Galaxy S5 did launch in Q2.

Average revenue per user is down when you look at phones only, add tablets/hotspots in and their average revenue per user is slightly up. I believe this might also be the case for AT&T and Verizon I know their net adds are mainly tablets.

They said that their total cost of migrating everyone from MetroPCS CDMA legacy network over to the T-mobile network would be $250-300 million (Spectrum refarming as well as paying for current customers to get new phones. Las Vegas and New England had a good retention rate of 92% of customers returning to MetroPCS, no numbers on moving to T-mobile or T-mobile MVNOs)

Hopefully they will use some of their profits to expand little by little. I believe they also said they were in talks to purchase $50.5 million worth of 700 MHz A block from current license holders to help expand even more.

Neither article talks about cost of customer acquisition, in fact it supports my "house of cards" statement:

The second-quarter results, which showed slower decreases in average revenue per user, eased investor's fears that the No. 4 U.S. mobile operator's success in luring subscribers from competitors was not sustainable.

annnnnddd we are back to the important number that has not been released yet.

What is the cost per customer acquired? If that is still rising like it was last quarter, and revenue per customer is still going down you lose.

I would love to see a breakdown of their Test Drive promotion costs and gains. It's easily the most praiseworthy part of their recent program moves, but it has to be really expensive, even with Apple providing the phones up front. And I doubt we'll ever see this (unless the numbers look really good for T-Mo, of course), but I'd be interested to see how many test drive customers became T-Mo customers.

I always liked T-Mobile; however, they have spotty service in my area and going with them would be a downgrade from At&t. I wish the company the best though. They just need to invest more in building more towers and perhaps another LTE frequency.

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I've been considering their prepaid plans over AT&T but how often are those national outages now. Never had that problem with Sprint but that's one of the reasons I originally left T-Mo for that and the EVO 4G.

I have been with them for a year now, and have only completely lost all signals once and I think it was my phone's fault, not T-Mobile.

I would check to make sure your area has decent coverage though, as your area may be different than mine.

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Give their test drive program a shot. I did, and while their coverage area isn't good enough to pull me away from Cricket yet, the test drive itself was completely painless. Plus, you get to play around with an iPhone 5S for a week.

They'll be getting another customer as soon as my damn one plus one ships

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I just wish they would tell us when to expect phone updates.

Plus this net neutrality argument is stupid (not really). In my point of view if I gain something positive at no cost I'm okay with it. I keep my music on my Desktops, Laptops, Tablet, Phone etc so I don't really stream music unless I reset my phone.

If people leave a service because of the new TMobile deal then the service lost un unloyal user. Who cares. Everything can't be equal even when thaf is best.

Hmmm I am on T-Mobile and have a M8 Google Play Edition wonder if I will be able to use the VoLTE at some point... I bet I don't since it is not a T-Mobile Phone... Which SUCKS!

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