T-Mobile Q1 2015 earnings call reaction: It’s going to get even better

With the earnings call well and truly behind us I’ve had some time to think and ponder on some of the talking points. It’s easy when looking at numbers and figures to get bogged down by statistics and financials. I find it takes time, and a purposeful step back sometimes to get the big picture. And perhaps see what’s next. Thanks to a review I’m working on for PhoneDog and LG’s launch event, I was kept busy on other things post-earnings. This coincidentally gave me the space I needed to try and see a recurring message in the earnings call which was: We still have plenty of room to improve. And this is an important message when seeing T-Mobile constantly hit record figures. It’s easy to think this is as good as it’s going to get. But what if it isn’t? What if this is still just the beginning of something even greater?

Perhaps one of the biggest highlights of the call was T-Mobile’s record churn of 1.3%. This means customers are staying with T-Mo longer than they have in the past. Back before the Uncarrier moves started, the company’s churn was at a pretty shocking 2.5%. And the carrier had set a target of reaching an ambitious low of 1.6% by 2017. We’re now just halfway to that time frame, and T-Mobile has beaten its goal comfortably. And it can still get better.

People aren’t only getting a better deal with better benefits on T-Mobile, they’re also getting better customer service and a better network experience than they would have 2 years ago.

Of course, we can’t see specifically in to the future. There’s no magic crystal ball and all kinds of things can change market performance. But, presuming T-Mobile keeps up its competitive nature, it will continue to attract new customers. It will also continue to aggressively deploy LTE in new markets, as well as building out its faster Wideband LTE and deploying its low-band 700MHz network.

By the end of this year, it will have LTE covering 300 million people. In fact, John Legere even stated that “the day is coming” when T-Mobile will have a better network than Verizon. Further reaching, faster and stronger.

With the assumption that T-Mobile’s customers will keep getting a better network to rely on, a faster network and better perks like no overages, unlimited data, free music streaming and upgrading whenever they like, it’s hard to see that churn rate of 1.3% not dropping further. What’s more, churn tends to get better as customers “mature”. Given the fact that some 8.5 million customers are still classed as being “young” (added in 2014), once they mature, it’s feasible that T-Mobile’s churn rate will drop even lower.

T-Mobile’s future success isn’t just about improving churn rates. It’s also that it seems to be one of the few carriers which knows what the future of telecommunications looks like. It’s a stand-out in that it has ditched the old-school carrier mentality held on to by the duopoly, referred to many times during the call as “Dumb and Dumber”. A prime example of this is T-Mo joining forces with Google on its new “Project Fi” which could see the two companies sharing various wireless technologies for each others’ benefit. And – although T-Mo refused to out specifics on the deal – it stated that it will “be great for us financially.

We also have Uncarrier 10 to look forward to, as well as an – as yet unannounced – new messaging service or SMS replacement. And this could be something to be excited about. During the Q&A session towards the end, one phone-in question asked whether or not T-Mobile was going to seek to replace SMS messaging, since it was such an outdated technology. The carrier’s response: Yes we are, we can’t tell you when. But it’s sooner than you’d think.

T-Mobile’s future isn’t without its challenges. It may be the fastest growing carrier in the U.S., but that success brings with it some potential hurdles. Chief of those is network congestion. When you don’t own the majority of spectrum – like the duopoly – you have to be clever about how you roll out your LTE. Especially when you’re one of the few carriers to offer unlimited data plans. While Verizon sees unlimited data as a challenge it doesn’t want to deal with, T-Mobile sees it as an opportunity for innovation. It’s why we have technologies like carrier aggregation, 4×2 MiMo and Wideband 15+15/20+20 LTE networks being deployed.

Perhaps its biggest challenge will be next year’s major spectrum auction. It gives all carriers the opportunity to acquire more low-band spectrum. The kind which makes building penetration even more effective. And we know T-Mobile needs more of that. Although its current portfolio of 700MHz A-block airwaves is a great start, it doesn’t cover nearly enough people. The added 600MHz spectrum from the incentive auction in 2016 could be a major boost to T-Mo. But only if it gets enough of it. And although the terms of the auction were changed last year to better support the smaller carriers, T-Mobile wants even better terms to make it an even playing field. It also needs to come up with enough cash to fund its auction bidding. And that won’t be easy with Deutsche Telekom unwilling to invest above and beyond its current rate.

Still, going back to an even bigger picture outlook, let’s not forget where T-Mobile was just over two years ago. It had just over 30 million subscribers, no LTE and no iPhone. It had a failed bid attempt from AT&T, and its future didn’t look at all bright. Now it has nationwide LTE, with the fastest data speeds in the major metro areas. It’s closing in on 57 million subscribers and has more customers coming in from other carriers than are going the other way. What’s more, its customers are staying longer than they ever have before, and its network is improving at an incredible rate.

The future – I believe – is looking even brighter than it was 6 months ago. What do you think? Has T-Mobile hit its peak, or am I right, is the future going to be even better? Sound off in the comments or shoot me a tweet: @PhoneDog_Cam.

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  • itguy08

    They have a LOT To work on if they want to be as good as Verizon. Look at Rootmetrics’ site for the ENTIRE STATE OF PA.. In most markets they are #4 by a LARGE margin!

    We need some serious investment pronto!

    • Ben

      Agreed – I’m staying in a cabin with some friends in NE PA later this summer. T-Mobile is partner coverage for 5 miles around, then some edge, then finally 3G/LTE 20 miles away in Scranton. Verizon and AT&T have LTE through the entire area.

      I’m assuming it will improve a bit between now and then, but it is still going to be well below Verizon/ATT in that regard.

      • Jay J. Blanco

        Verizon and AT&T has low band in that area. T-mobile doesn’t need to build dozens of towers to cover 3 cabins. Lol so that area won’t have service until 2017 or so

        • Ben

          T-Mobile has band 12 spectrum there, and it is outside of a Ch 51 exclusion zone.

          It’s one of the poconos-area lake towns, a little more than just 3 cabins. It is about 4-5 sq miles with easily 500-1000 homes there.

        • Jay J. Blanco

          Well that’s cool. Whenever they feel like putting antennas up but of course you have a compatible device

        • FILA

          Dont worry abut him, this is where the Banjos play. Give them 2 tin cans and a string, mountain people will be happy

    • FILA

      PA SUCKS! Screw you guys

      • gmo8492

        Lmao

  • gm

    Cam it would be awesome if there were a article on whether lollipop been a good update for tmobil user or not. Don’t know whether I want to update and I’ve heard a lot of problems with this program. I’d love to hear what tmobil customer’s think

    • Frankwhitess

      Just so you can know, you can e mail cam and just ask him about your request.. The comment section is to comment on the topic… Thank you sir and have a jolly day :)

      • thepanttherlady

        Or the OP can do just what he/she did and post in the comments.

        • Frankwhitess

          Riiiiittttteeeee………. But isn’t the comment section suppose to be for commenting in regards to the article ???? Am just saying…

          And according to cams last paragraph, he is literally asking us our thoughts in regards to the article……………………… Not your thoughts on :

          ” Cam, how come Samsung didn’t make the Galaxy S6 screen size 5.3 inche instead of 5.1 inches?? Cam you should make a article about it, contact Samsung, see if you can arrange a meeting with the CEO , ask him, and then get back to us.. Yup.. Thank you Cam ”

          Really…. I mean……. Really?? -_-

          Your Honor I rest my case.

        • thepanttherlady

          You must be such a joy to be around.

        • gm

          What funny is he spent and wasted more time complaining about us then I did asking.

        • thepanttherlady

          Some people just need extra hugs. :)

        • Cam Bunton

          Extra hugs, and a hot dinner? ;-)

        • thepanttherlady

          Hey! A woman’s gotta eat too. :)

          P.S. I worked up an appetite trying to figure out where the damn SD card goes in this thing. Seriously took me about 5 minutes.

          #blondegirlproblems

        • Cam Bunton

          Is it hidden in the same tray as the SIM?

        • thepanttherlady

          Goes exactly on top of it. :/ In my defense, the SIM was already installed when I got it soooo……… :)

        • Cam Bunton

          I vaguely remember the G3 being the same. Stumped me the first time too.

        • Nerd_Baller

          1st world problems, not just blondes ;)

        • Frankwhitess

          Wait…. Really? I spent more time complaining? I was just expressing my self silly goose..

        • Frankwhitess

          If it’s okay with, it would be a pleasure for me to take you out to eat, grab a cup of coffee or just hang out.. You will see that I actually am a joy to be around ;) .. And am serious about getting something to eat :)

        • Hector Arteaga

          Man, where you seriously hitting on someone over the Internet on a comments section of a tmobile news site? Sooo on topic… sad too.

        • Frankwhitess

          Lol… Relax.. I was just speaking freely..

    • FILA

      Lollipop 5.0 atleast is a horrible update from Google, no matter what carrier. 5.1 is alot better and rumors of 5.1.1 update coming out within a few weeks.

    • steveb944

      It’d help to include what device you have. For some it’s improved, while others not so much.

      If you need the functionality, and don’t mind cutting your losses I’d say go for it. I’m running it on my Oneplus One, and I love what it brought overall and I can’t live without it now.

  • So, unlike other carriers which extort and threaten consumers to retain them, the uncarrier gives them more value instead? T-mobile FTW!

    • Cam Bunton

      That, or tries to convince them they don’t really want unlimited data. lol

      • JaswinderSinghJammu

        That’s a good one. They convinced someone I know you don’t need unlimited and now all of a sudden he is charged overages. Very sad.

  • Acdc1a

    I’ll be honest, I’ve looked at the competition and I can’t justify it. I don’t think the majority of users can and that makes up for the 1.3% churn rate. More important than price is the improving network on my frequent drives up I-75 (end to end). There are now very few places without LTE on the entire drive.

    If this continues, I can see a day in the not too distant future where number 2 is what they’re shooting for next.

  • Joe

    All they really need to do now to be the best carrier is get all the 700mhz they can and deploy on all of it, Get more AWS in the markets that still need it for wideband, get a nationwide 600mhz license, update all the phones to the latest OEM software available (s4), get VoLTE on all phones that are capable of it (LG g2), and they should be set.

  • B12 seeker

    55 markets with Band 12 deployed, but only a few are mentioned. What are the rest?

    • Cam Bunton

      55 market areas = a number of small counties/cities in a handful of States.

      • Hector Arteaga

        In Jackson TN, which a small city, they have wideband 15×15 on band 4. There must be a bunch of small cities like this that are not on any official list.

    • Fabian Cortez

      55 markets with Band 12 deployed, but only a few are mentioned. What are the rest?

      That’s 55 markets with wideband LTE.

  • Fabian Cortez

    By the end of this year, it will have LTE covering 300 million people. In fact, John Legere even stated that “the day is coming” when T-Mobile will have a better network than Verizon. Further reaching, faster and stronger.

    Buy low, sell high.

    By the time that this announcement is made, I expect the stock to rise. This would be the first time in this country that a carrier, apart from the twin bells, reaches this milestone and offers true competition to the duopoly. Add in their low prices and consumer-friendliness (un-carrier, corporate structure, etc.) and you can see where this is going.

    Add in the incentive auction (600 MHz) and 2016, 2017, and 2018 will be interesting when it comes to wireless pricing in this country.

  • Fabian Cortez

    We also have Uncarrier 10 to look forward to, as well as an – as yet unannounced – new messaging service or SMS replacement. And this could be something to be excited about. During the Q&A session towards the end, one phone-in question asked whether or not T-Mobile was going to seek to replace SMS messaging, since it was such an outdated technology. The carrier’s response: Yes we are, we can’t tell you when. But it’s sooner than you’d think.

    That’ll most likely happen when they deploy RCS (Rich Communication Services).

  • Chad Dalton

    My only issue with T-Mobile is text…very slow transmission there…and its so sporadic, one minute they can sent in a blink of an eye, and the next could wait 4 minutes….its frustrating sometimes…but everything else works great…I think our phones are cheaper than say Verizon phones…my mom’s note 3 compared to my note 3 seems more stable and smooth…she’s running kitkat and i upgraded to lollipop. Her phone just feels better overall.

    • thepanttherlady

      In the last week alone I’ve not received several text messages sent by other T-Mobile users and one from Verizon. :/

    • xealo

      I’ve been having this problem for a while now. I even contacted them. I keep getting messages, even from TMO users, a day or two late sometimes. Often times many hours later. Super annoying.

    • Nerd_Baller

      In the quarterly earnings call, they slipped in that they are close to releasing a modernized version of sms. They know their sms systems are dated, and this was very welcome news

  • Hector Arteaga

    Wonder what Sprint’s numbers will look like? Doesn’t seem like there was too much space in the market for them to grow. We will see.

    • IceMan

      Not looking good, imo. T-Mobile’s hype train and pricing is grabbing mostly Sprint customers, instead of from the big two.

      • Hector Arteaga

        I want part of that b41. They probably would sell a bunch of it if they’re in trouble. Hoping anyway haha.

      • Q1 2015 showed postpaid losses for Verizon and Sprint. Hold on to your horses, because they’re about to be set loose.

        • AS118

          I switched from Verizon to T-mobile. I live and work in urban areas, so my service and call quality are the same, but the data is faster and cheaper.

          My whole family switched from Verizon, and pretty much everything feels the same, except the download speeds are better. Which I couldn’t say about Sprint when we had it, as we had to go outside the house to send or receive calls.

      • UMA_Fan

        Att and Verizon LOST phone customers but posted a net gain of activated devices thanks to tablets.

    • Fabian Cortez

      There’s pretty much no way for them to grow this past quarter in postpaid phone additions as T-Mobile captured 100% of those.

      If they add subscribers, it’ll be in tablets (to mask their postpaid phone losses) and prepaid.

      I expect them to post a financial loss as well.

    • Matt

      Any consumer wants Sprint to be healthy because competition is an absolute necessity to prevent high prices and poor service.

    • TK – Indy

      They will add some prepaid, and lose some postpaid. Between all that and MVNO activities, they could add half a million or so.

  • TK – Indy

    I keep waiting for Verizon to become aggressive about getting new customers. It has to happen sooner or later. If they continue to milk their current cash-cow, it will begin to dry up sooner or later. Depending upon how aggressive they get, and how things sit when it happens, it could spell bad news for all the other carriers.

    • Hector Arteaga

      Well, the big two say unlimited data is unsustainable. Watch what happens if they lose customers in droves.

      • Matt

        They’re already upping their data caps due to concern over loss of customers. But will that be enough?

      • And you can tell that they are lying because their lips are moving.

  • hellsh666

    Next step join forces with us cellular

    • Fabian Cortez

      I agree.

      A fully reciprocal roaming agreement where T-Mobile gets access to their A Block spectrum.

    • Jay J. Blanco

      I been tweet John about that. U.S. Cellular is perfect. They have very good 700mhz in areas that t-mobile need it the most plus they have like 5 million customers

      • Android_God

        Please let us know how John reacts! !!

  • Rob H.

    I’m excited to hear more LTE on 1900 so my Nexus 5 will still be useful. However the LG G4 is looking very interesting.

  • UMA_Fan

    I’m actually really surprised Sprint didn’t have much of an impact. Sprint supporters make it seem like they are having the kind of growth T-Mobile did this time last year. Port in ratios were 3:1. For every 1 customer T-Mobile lost to Sprint. T-Mobile took 3.

  • Android_God

    I like John, he’s like a goofy 14 year old with ADD

  • Raiterio Patterson

    I like the direction T-Mobile is heading. Although, I can’t stress it out enough: please buy spectrum from Cavalier License so NC/SC will be on top.

    • Fabian Cortez

      And both Continuum 700 LLC and AB License Co LLC.

      • Raiterio Patterson

        And U.S. Cellular

        • Joe

          O how I wish that would happen but I don’t think it will. If it does though I will be so happy.

        • Raiterio Patterson

          Cavalier owns 700Mhz A Block spectrum in Kentucky, Florida, Georgia, South Carolina, & my state: North Carolina. AT&T owns 700MHz A Block in the Carolinas, doubt they’ll give it up to T-Mobile.

        • Andrew Heisler

          But there’s a chanel 51 station that covers much of the charlotte area and the raleigh area.

        • Raiterio Patterson

          Yea WMFY in Greensboro, but there’s a small portion of 700MHz in Cherokee, and Clay county….I think. Don’t quote me.

        • Aaron Davis

          Is at&t actually using that 700MHz A block? If not, the FCC might force them to sell it, like they did to Verizon.

        • Raiterio Patterson
  • PiCASSiMO

    Rant on:

    I’d like to get the normal map back that shows the true service of a location in 2G, 3G, and HSPA+, rather than theoretical 4G LTE. My concern is that we have several phones within the family that do not have LTE connectivity which results in sometimes NO SERVICE zone as the 2G tower was converted into 4G LTE. But the other issue is that even with 4G LTE capable devices, I’m still seeing a huge drop from 4G to NO SERVICE in downtown areas that should show a strong LTE service based on the current coverage map.

    My question to all the geeks in the house: Will the coverage area be smaller from 2G to 4G T-Mobile tower conversion? My guess is that is what I’m experiencing while driving and staying through various parts of Michigan. 2G towers were able to provide me with at least coverage that will provide me with some data, albeit slow data. Compare that to the converted 4G towers that have the fast data but only if you are located much closer to it.

    • MicSuth

      When they “convert” it to 4G or LTE the 2G service is still there, so you wont have to worry about having no service on the non LTE capable devices. You can test this for yourself by disabling LTE on your iPhone or Android. All they do is add LTE equipment to the tower alongside the 2G equipment.

      I have experienced what you do when you say if you get to far from a LTE/4G site you lose data or things are slow, usually this is because the phone is trying to leave that site and pick up on a nearby 2G site, you can help this process move quicker by toggling airplane mode.

      Hope this helped your questions.

      • Jay J. Blanco

        Or if he has a Samsung daily *#2263# and choose lte/GSM so your phone knows exactly what to look for when your taveling from city to city. Saves bettery

      • PiCASSiMO

        Thank you… Will try that.

  • vrm

    they have plenty of spectrum IMO – the small percentage of unlimited users are causing the congestion and no amount of spectrum will fix that permanently.

    It is important that they address this sooner rather than later by educating customers via advertisements and targeted messages to the “offending” users before this blows up in their face.

    It is important to remember that they have much less than 1/2 of verizon’s subscriber #s and are experiencing congestion already. More spectrum will NOT fix this problem.

  • Zach Chadwick

    So… Will the time be coming where normal SMS’ will display whether or not the message was delivered or not, much like iMessage on iPhone? That would be awesome. Also, I’m looking forward to seeing LTE deployed on 5GHz. Since it’s not licensed by anyone, put as many cell towers up anywhere, and you’re fine.

  • Kyle Thompson

    great news, maybe all this goodwill and money will finally buy me the WiFi service for my Nexus 6 that was due months ago. Or is TMO gonna drop the lie that “all our phones are wifi capable out of the box”? because i can assure you for the past 6 months, they’re not.