T-Mobile outpaces AT&T, Verizon in customer growth
23 Apr 2015
AT&T Mobility and Verizon Wireless would continue trailing T-Mobile US in customer growth metrics for the first quarter of 2015, Bloomberg reported.
According to AT&T, the second-largest cellular carrier in the US, it was expected to post 400,000 postpaid net additions, while Verizon Wireless, the largest carrier in the US, posted a disappointing 377,000 direct net customer additions for the first quarter.
T-Mobile US was expected by analysts to outperform both larger rivals with the addition of 930,000 net customers for the quarter, which would turn out to be the fifth consecutive quarter that T-Mobile US had led the industry in new subscriber growth, according to reports. Despite having taken the lead in new subscribers and phone sales, T-Mobile, the US still trailed its two main rivals in tablet sales.
The competition among the three telecom firms had hurt Sprint, currently US' No 3 carrier, which is expected to post a loss of 123,000 ''phone'' customers during the quarter. Analysts however, expect the losses to be offset by strong tablet activations.
T-Mobile US attributed its success to the aggressive ad campaign it ran that called on users to ditch its rivals and switch to T-Mobile US.
Bloomberg quoted Maribel Lopez, an analyst with Lopez Research, as saying, the US wireless market was saturated and only two things would drive carrier growth - stealing customers from other carriers or adding connected devices like tablets and cars.
Meanwhile, AT&T Inc's association with Apple continued to bring benefits to the carrier. It had become the first carrier to offer the iPhone 6, which saw it beat analysts' expectations in the fourth quarter of 2014 thanks to increased sales from the new device during the holidays.
The quarter ending March is known for being slow for telecom carriers as many customers purchase new devices between October and December.
In the most recent quarter AT&T would add a net of around 423,000 wireless subscribers, according to Goldman Sachs' projection.
Many new subscribers that carriers add during the first quarter preferred to buy tablets rather than smartphones, a situation Verizon Communications also faced during Q1.
Meanwhile, T-Mobile continued to stick with an installment plan business model and had used price cuts and special programmes to lure subscribers for nearly two years.
