Will T-Mobile’s Momentum Begin Chipping Away At Their Rivals? Analyst Magic 8 Ball Says Yes

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As the days tick down to T-Mobile’s third quarter financial report, thanks in part to the bold action of their CEO, analysts are continuing to make bold predictions. According to an average estimate of seven analysts contacted by Reuters, T-Mobile is expected to report another 444,000 net additions when they release their third quarter financial results on November 5th. In fact, some analysts Reuters spoke with called those numbers conservative. By comparison, AT&T reported 363,000 net subscriber growth for the third quarter and when factoring in the numbers without tablets, AT&T would have seen a net subscriber loss. It’s become crystal clear that AT&T is the target of T-Mobile, a notion that is helped by the ease with which customers can move their phones over to T-Mobile’s network.

“T-Mobile is taking market share from everyone,” said Craig Moffett an analyst at MoffettNathanson but, he added that it is “specifically targeting AT&T at every turn.”

Consumers are being drawn to T-Mobile thanks to lower service prices, network enhancements and the introduction of the iPhone according to Joe Pasqualichio, an analyst at Eaton Vance. “They’re clearly having an impact,” he said. The real question for Pasqualichio is whether T-Mobile can chip away at AT&T’s family plan subscribers which account for 90 percent of the company’s subscriber base. “There’s a question of whether or not they can attract the family plans,” he said. “They tend to be more sticky customers.”

Deutsche Bank analyst Brett Feldman views it from another angle as he highlights the sharp drop in T-Mobile’s churn, or customer defections to a competitor. That number was down to 1.58 percent in the second quarter of 2013 against 2.1 percent one year ago. Feldman predicts T-Mobile’s churn will continue to stay low when the third quarter results are reported.

“T-Mobile has clearly done something right based on the fact that so many of their customers are choosing to stay with them relative to a year ago,” Feldman said.

T-Mobile’s competitors are looking to avoid a price war that could damage industry profits across the board, but without a stronger response Feldman predicts T-Mobile’s 2013 target for 1 million to 1.2 million net additions may in fact be too low.

“I think this is going to be the second consecutive quarter where T-Mobile are the phone net-add champion,” Feldman said.

UnCarrier indeed.

Yahoo Finance

 

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  • Mirad77

    “Well done Legere, well done”. Now just keep the network improvements coming and the future is yours.;-)

  • https://christiaanconover.com/ Christiaan Conover

    Wow, a company is gaining traction because it’s doing things in the best interests of its customers? Who would’ve ever guessed that could work?

    • chuey101

      haha spot on.

    • Dakota

      Let’s be clear though.. They’re doing it for profit not to be nice. When you’re in last place & don’t have much to do, you can take bigger risks.

      • https://christiaanconover.com/ Christiaan Conover

        Of course they’re doing it for profit, but they’ve found that when they do things in the interest of serving their customers instead of just their shareholders, customers are happier and want to remain customers.

  • http://twitter.com/SParKlngCyaNide SparklingCyanide

    Absolutely, the effects are already being seen. I just wonder how far we can take this without them expanding their 2G area’s into full LTE. Disclaimer: I live in a Fantastic spectrum rich T-Mobile Area with full bars LTE(30-39Mbps) everywhere I go, I would just really love for everybody to have the same terrific experience I have.

  • 21stNow

    I want to see price wars. As of now, the big two still have huge telecoms to rest on. Verizon Wireless still has Verizon and Vodafone and AT&T Mobility has AT&T. If they wanted to, they could start a price war that could shake up the industry for real. For now, they are just sitting and watching.

    It’s interesting that T-Mobile’s focus is on AT&T. The forums for VZW and AT&T have typically shown different types of responses, but I see far more posts on VZW’s forum than AT&T’s that show customers who want to leave for T-Mobile.

    • JB

      True… I suppose because it’s so easy to BYOD from AT&T it makes sense to go after their customer base. With that said, I’m sure people who are dissatisfied with VZW defect because of cost of service, so it would be nice if Magenta would go after them in that front.

      • PiCASSiMO

        For an extra $5 per line, I would probably jump ship to AT&T if they had BYOD plans with the same voice, text, and data as what I have with T-Mobile’s value plans. But I don’t think AT&T will offer a 1000-minute, unlimited text, and 2GB of data for $80/month + $5 x 2 lines = $90/month.

        • Dakota

          Try Straight Talk for a month. They now offer 2.5gb of AT&T LTE data for only 45$ and no extra fees

  • jimmiekain

    Am I thinking of this the right way? As a tmo customer I don’t want them to get a whole lot of new customers. I was with sprint and it was great. Then they got the iPhone and got a whole whole lot more customers in a short period of time and the service turned to straight garbage. Will tmo be able to handle of these new customers? Do they have enough bandwidth to serve everyone without it being super slow like sprint? Or, maybe a lot of new customers would be a good thing. Maybe they will use all the extra money to buy better spectrum. If you ask me that’s their main problem. They don’t have anything under 1ghz that’s why building penetration is so bad.

    • Mirad77

      The advantage T-Mobile has for now over Sprint is the ASW spectrum. But it will be different when and if sprint start pushing LTE on their 800 MHz spectrum they are sitting on.

    • MaseW

      I think that had more to do with Sprint, and their complete incompetence regarding the management of wireless networks. Over the past 10 or so years, they bumbled three different networks…the “main” CDMA/LTE network, the NEXTEL network, and the ClearWire/WiMAX network. They are the worst.

      Probably a more apt comparison would be AT&T. They have struggled with capacity issues as well, but their service has never degraded to the levels Sprint’s does.

      • jimmiekain

        When I left sprint I went to ATT for a month and the service was wayyy wayyy better than sprint. I dont think there was a ever a time I had no bars and can recall only time my download speed was less than 1mb down. Problem was, the price was too high. It was $90 for 450mins, unlimited text and only 3gb of data. My experience was TMO has been awesome! I get unlimited everything for $70 no contract (I use a nexus4 from the play store) and the coverage (in my area of southern California) is not as good as ATT there are plenty of dead zones but for the most part I get way better service than I did when I was with sprint. I average about 12mb down on HSPA+ on sprint I would jump for joy whenever my speedtests showed more than 700kb down.

    • Alex Zapata

      Sprint has TONS of spectrum, and I means gobs and gobs. Their problem is that they had build-out ADD and couldn’t stick with one network technology. At least this is the case now, I don’t know what it was like back then.

      • jimmiekain

        I’m just saying I think the main issue with tmo is they are on 1700 / 1900 and 2100 mhz. Even sprint has 850mhz while vzw is on 700mhz. I’d like to see Deutsche Telekom pump some cash into T-Mo. Maybe then they can outbid the bigger guys and get some spectrum under 1ghz.

        • Alex Zapata

          Yeah, I get what you’re saying. I keep telling people that I hope TMO bids in the upcoming auction because that 600MHz is prime spectrum for range and building penetration.

    • calichik

      same here i hope tmobiles network can handle alot of people i dont want the same thing to happen to its network like sprint and att . I still have my work phone iphone 5 from att and over here in los angeles during rush hour starting about 12 pm att nrtwork TOTALLY craps out in the dtwtwn LA area and hollywood its not usuable data and calls crap out ,tmobile on the other hand even at that hour works great.I guess because tmobiles network dnt have alot of people on it thats why it works better but if a bunch people get on tmobile network i dntwant it to have the same fate as att its sad its 2013 and att still sucks just like it back when it first took out the iphone.

    • UMA_Fan

      The positives of not having low band spectrum is that it allows for more capacity

    • Dakota

      No doubt an influx of a lot of new people would affect their network adversely

  • Spanky

    I would love to return to T-Mobile. I REALLY would. However, that pesky coverage issue is preventing me from doing so. There’s just no excuse for having 0.5 Mbps downstream speeds in the biggest city in the U.S. Granted, this doesn’t apply to the entire NYC area, but the fact remains the it’s unacceptable. The speeds were better, but degraded quite literally overnight and T-Mobile did nothing to rectify the issue. If John Legere happens to read this, do something to improve the data speeds/coverage in Bensonhurst (Brooklyn). You’ll gain a few customers!

    • Geraldo@Hotmail.com

      I was in that area two days ago and my nexus 4 lte has remained fast, the only time i had an issue in that area or any other NYC area was when they were farming over their old spectrum to 1900mhz, and when they were working on bringing lte to the city. When they work on the towers your data speeds go to less than 1mbps.

      Either that or a tower is out by you.

      • Spanky

        See above. T-Mobile stated that there was a cell site in my issue, kept that story up for a year, then telling me that there are no problems in my area and that it has the best possible 4G coverage. They then proceeded to blame the issue on my phones. At this point, I realized that they weren’t going to do anything about the data issue, so I left.

    • Red5

      I can find an example of crappy coverage for every carrier!

      • Spanky

        Absolutely. Unfortunately, T-Mobile is one of those carriers in my area. The other one is Sprint, which barely gets any signal at all.

    • JosephLagalla

      HSPA speeds? I switched to an LTE phone last year, so I haven’t noticed the difference. The signal inside subway stations is a plus though.

    • kev2684

      i just moved within jacksonville and i only see edge in my new apartment. customer support told me that they received numerous complaints in the area as well and enhancements are being done atm. i hope what they told me was not a lie.

      Jacksonville is one of their 2nd batch LTE cities and the new area i’m in is densely populated i’m not sure why was it not covered with 4G LTE when the website coverage checker says so. they really need to convert ALL those edge towers to 4G LTE.

      • Spanky

        T-Mobile kept telling me the same thing for a year. They stated that there is an issue with the cell site serving my area and that traffic has been rerouted to a backup site while the cell site is being serviced. Eventually, they told me that there are no problems of any kind in my area and that it must be my phones. At that point, I terminated my two-line contract and went to AT&T. Again, I would love to return to T-Mobile, if they did something about the abysmal data speeds in my area.

        • Dakota

          I rarely believed T-Mobile reps they always just pulled things out of the air. Speaks to 3 reps & get 3 separate responses

      • Dakota

        My brother lives in Jax & I likewise got no service at their home. They had AT&T & were fine. I then was ona mmajor highway & likewise had zero coverage there I couldn’t even make call & had to walk to agas sstation & beg them to let me make a call

    • jride

      It’s funny because T-Mobile loves to go on and on about LTE and how
      many people it covers but have they even expanded one area of LTE to an
      area that did not have HSDPA? Or have they brought basic 3G to any 2G
      areas? It doesn’t seem like they have.

      Not to mention that their coverage map is not really an honest assessment of
      their network. I have the second best shade of green at my house (on the
      map) and I get one bar standing by a window. It is not my phone.

      C’mon T-Mobile, suck it up and improve your coverage. It may not be as
      glamorous as “800 bajillion people now covered by 4G LTE” but it’s what
      your current customers want and what your future customers will want
      once they’ve experienced the (literally) dark side of T-Mobile.

      • Red5

        “Not to mention that their coverage map is not really an honest assessment of their network” – Show me one carriers coverage map that is… At least the T-Mobile makes itself affordable

        • Dakota

          But cost means nothing if you can’t get service when you need it. Not sure they’ve changed their brand perception much. It’s still seem as the cheap carrier, especially for young

      • philyew

        I believe that I’ve seen reports and comments around the forums that TM has upgraded services from 2G to HSPA+ in some areas, but that is likely to be driven by the equipment replacement schedule rather than a program to consistently upgrade the 2G network.

        I strongly suspect that it is simply not going to be cost-effective to upgrade currently operational and supportable equipment in many areas which lack the population density to offer sufficient increased income to cover the cost of the hardware upgrade and the required improvement in backhaul infrastructure.

        In other words, in time the 2G network will be overhauled because all equipment eventually has to be replaced, but not before the maximum revenue from denser population areas has been achieved.

        As frustrating as this is, no one should be surprised that a company with less than half the subscribers of either AT&T or Verizon, which charges each subscriber, on average, less for their service, is unable to match their nationwide network footprint.

        • Dakota

          So don’t claim you do.. Which they do in their ads & statements. AT&T should do a T-Mobile comparison ad with customers who switch and can’t get coverage where they were fine with AT&T

        • philyew

          Where do they claim they match the AT&T or Verizon footprint natively? They claim to match coverage using roaming agreements, but don’t claim their 4G (HSPA+ and LTE) footprint matches. They use POPs to compare, since the vast majority of mobile subscribers live in the larger MSAs.

          With contract-free service anyone moving over from AT&T bringing their own device can move right back just as soon as they like. The churn numbers will reflect whether post-migration dissatisfaction is significant.

          Taking contracts out of the equation really does make a huge difference to the significance of those types of marketing attack.

        • SuperRob1

          I just switched from AT&T to T-Mobile, and the coverage is definitely worse. What isn’t bad, though, is the nearly $60 a month I’m saving on my bill. I can move to a window for that much savings.

        • philyew

          There will continue to be indoor coverage issues, relative to the other carriers, because of the bands that TM has to use. As long as the other carriers are able to use shorter wavelength bands their structural penetration will be superior.

          There will also be LTE v. HSPA+ v. EDGE comparisons in many areas.

          But as you rightly point out, many users will consider the price/performance trade off to be worth it.

          TM clearly have a great deal of confidence in its power of attraction, otherwise it would be suicidal to pursue the aggressive destruction of contractual ties with its customer base.

        • jride

          Perhaps the bean counters should get away from their desks for a little bit. Chances are, as soon as they got up, they’d realize that coverage is a much bigger issue than their pretty little magenta map and never ending spreadsheets tell them.

        • philyew

          Once the contract-based plans are gone – and TM are now accelerating that process – the bean counters will have all the evidence they need about the customers’ perception of the network.

          If the user base doesn’t continue to grow, then there won’t be any remaining factors, other than network quality, to blame for the lack of success – assuming that the other carriers haven’t dramatically changed their price/contract model in response.

      • Chardog

        After the base LTE rollout, the next plan is to go back to all the 2G towers and take them straight to LTE… Don’t have a time frame on it, but it is on the radar (likely starting sometime next year).

    • Dakota

      Same in other major cities. There’s little consistency & huge variety in speeds. I can often get <1

  • Red5

    T-Mobile ‘ attack on AT&T is happening for many reasons, number one ‘BYOD’; The ability to simply put a different simple card in your existing device. Number two; The American public has a perception that Verizon is the “Best” carrier. T-Mobile would not win people over by attacking Verizon because of there reputation but if you attack ‘ATT’ just perhaps the American consumer may begin to physiologically compare T-Mobile to Verizon… T-Mobile is attempting to piggy back on ATT’s marketing against Verizon in hopes that we will turn heads in the whole industry. Guess what, it’s working.

    • Chris

      I just took my family plan to T-Mo from Verizon. T-Mo is the most competitive plan with multiple iPhones.

      • Dakota

        Depending on where you live, did you notice coverage differences? I was at a doctors buildingthis week & was the ionly one without a data connection. You can now get AT&T Lte 2.5gb at Straight Talk. That’s a pretty good deal… I’m thinking of trying it since I’ve been using a T-Mobile sim e but plan to upgrade to an Ltd phone. $15 a month (well more since mvno has no superfluous fees) will add up

    • MefMaf

      You mean it has nothing to do with At&Ts (and Verizon’s) ridiculously over priced mobile share plans?

      • Red5

        What I am saying is the attacks are directed AT ATT instead of Verizon, because the perception is that Verizon is the best carrier in the US. ATT ads commonly attack Verizon; T-Mobile rides the wave.

  • taron19119

    Can u say number 3 t-mobile is on it’s way to mumber 3 I say by 2015 t-mobile well be number 3

    • Chris

      I think T-Mo is already there. How many times did Sprint come out in any of these comments? lmao

  • Fierro

    Andamos recio tumbando contraz! Arriba el Codigo Magenta!

  • TMoFan

    Team Legere has done a great job revitalizing T-Mobile from a carrier that was ignored and thought of as “has been” to a force that will determine the path the industry takes.

    UNcarrier can’t be ignored now. Keep it up team Legere!

  • Matt

    It would be interesting if any of these net adds included growth in MetroPCS.

  • Rob

    I’ve noticed that T-Mobile’s customer service on 611 has finally been improved as well. Still some overseas reps but they’re easier to understand and I don’t have to call them multiple times to get something simple then or lose my temper and end up with an escalation to a supervisor, then to a supervisor in America.

    Now if they could just boost the LTE output over here… I regularly get 25Mbps down and 9Mbps up but my RSSI is -110 to -115 here at home while my HSPA+ signal is -75 all the time. I don’t live in BFE either – I am two blocks from the state capitol…

    That said, it is a common carrier problem here. at&t and Verizon both get almost no signal here. I’m guessing that my area is so densely populated that its hard to put up new towers so we’re stuck with what we have. If I walk to Civic Center park, I can watch the signal increase and when I hit the 16th Street Mall, I’m floating between 3 and 4 bars, average download 29, upload still 8-9 but my latency goes down from 70s to 20s.

    • TylerCameron

      No, I notice T-Mobile’s LTE output power is drastically lower than their HSPA power. My theory is that since LTE shares spectrum with HSPA, they lower LTE’s output to prevent interference. But the worse signal power definitely takes a toll on our batteries.

  • Jesse James

    attt and verizon have nothing to fear until Tmo provides decent coverage nationwide not just in certain areas…. If/when that happens, look out.

  • Mo

    VERIZON and ATT have CABLE tv,Home Phone,Internet so they will be OK.

    BUT IN THE MOBILE INDUSTRY YES TMOBILE is putting the scare into them IF NOT then why are they basically COPYING TMOBILE.
    WHen have you ever seen tmobile lead and the other three follow????? NEVER

    They are gaining hip factor and the no contracts and what they continue to do in changes will gain CUSTOMERS… Phones are the same now etc

    all different from the past

    12 customer let me tell you

  • Vitamin Dice

    I base cost on per line averages. Family lines especially 4-5 and including corp discounts are main reasons Verizon and ATT customers aren’t leaving for T-mobile. Factor in subsidies and finally coverage. T-mobile’s plans may offer only a $5/line savings which isn’t enough to entice them to switch.

    • Mirad77

      Base on your analogy that is $240-$300 savings yearly. I don’t know about you but by the time my 3 year old goes to college that would be some good money in her collage fund. Where I am T-Mobile has very good network including LTE , plus in this economy that’s a lot of money to be giving away to a company. I know many people that switched from the big two when I told them how much I pay monthly on 4lines compared to their 2-3 lines and we all live in the same area. Traveling across state lines is not any concern to any of us, so tell me why any of us would want to pay more. There is the disadvantage T-Mobile has is the fact that they only have cell phone service as opposed to cable, landline and internet services the other 3 have. The convenience of having all four in one bill from one provider keeps many from switching .

      • archerian

        its all about perspective – if its $5 savings on a line per month, thats like a the cost of a burger, but at that cost comes a better network with single billing, and the “perspective” of being on a better network. Is T-mobile better in several aspects of service and speeds? Of course, but the general opinion among the general population is that VzW and ATT have superior networks.

        • Mirad77

          You are correct, perspective and convenience affects some peoples choices.

      • jc103

        I’ve noticed something funny: many of my friends who have AT&T and Verizon are the types who work 9-5s and never leave town. Yet, all of my Couch Surfing friends are the ones with T-Mobile. Maybe the travelers are the ones who don’t get caught up in marketing gimmiks, such as, “There’s a map for that.”

        • Mirad77

          Funny how you put it but correctly so. I guess there are many that follow trend more so than their individual needs.

  • deng

    Growth via attracting extremely value conscious customers comes at the expense of profits. There are a limited number of customers who place price before coverage. At some point TMO must increase rural coverage if they want to maintain customer growth.

    • Mirad77

      That’s the typical cooperate greed mind set of analogy. TMUS was still a profitable carrier when it’s customer base was in decline. So I don’t think they will be less profitable with more customers. And what is wrong with value conscious with one’s dollar? On the other hand I think there are more people that place price before coverage as only a limited number of people have cross country jobs. Development/ upgrade is always good and will be for T-Mobile’s growth and botomline.

  • GinaDee

    I think T-Mobile will be successful taking the price conscious voice only users from the old Bells. Those people hardly use their phone and when they do it’ll be limited.

    • KingCobra

      I wouldn’t be so sure about that. Even the mighty AT&T lost subscribers last quarter if tablets aren’t taken into account and Verizon had increased churn as well due to Tmobile. There’s a tradeoff with the duopoly and Tmobile. You get high speed data in more areas with AT&T/Verizon, but that data is limited so if you’re a heavy data user it could be extremely expensive. While T-Mo offers the flexibility of unlimited data and more generous data plans overall.

      T-Mo’s last quarter growth and likely their upcoming quarterly results show that most people will deal with the poor data speeds in rural areas in exchange for more affordable service. I think a lot of people here tend to grossly overestimate how many people have jobs or lifestyles that require them to spend a lot of time traveling across country on the road. Most people usually do stay in their native metro areas.

      I also think what they’re doing with the 200MB free tablet data is ingenious. It lets people try out the network and 1 of 3 things will happen:
      1 – They will exhaust their 200MB and have to purchase more data from Tmobile
      2 – They will use the tablet and find T-Mo coverage sufficient to their liking and later consider switching their smartphones over as well
      3 – They won’t like the coverage. Obviously Tmo is banking on 1 or 2 happening. Especially 2. But it’s an enticing way to get them to try the network.

      It also serves to potentially steal away those tablet subscribers that seem to be the only thing keeping AT&T from being completely in the red for subscriber growth these days.

      What Tmobile needs to do now to really put the heat on competitors is figure out some way to pull in Verizon/AT&T customers who are on family plans. Those are the most difficult to take due to the staggered contract end dates.

      • Mirad77

        I like the way you lay it out. There is two experience to tell when (1) I leave Chicago and fly to Virgina and (2) I leave Chicago and drive to Virginia for work. When I fly, there is no way I’ll not say t-moble is the best for my dollar. On ther other hand when I drive it’s a different story and tust me I have done both. It now falls on how you travel when working accros state lines that your network needs comes handy.

  • Mike

    Aside from the obvious improvements, coverage & price, I Will site one not so obvious, customer care. Had a few issues & even with my bad attitude not once was I treated rudely & the problem was solved.