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T-Mobile Results Lead US Carriers in 3Q22

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  • / Jeff Fieldhack

T-Mobile remained the hottest carrier in the US market adding 854,000 phone customers during the 3rd quarter of 2022. T-Mobile appears to have some wind to its back over the next few quarters. It has, at least a window, of mid-band 5G network leadership. With this network leadership, it now can attack some areas it has been under indexed such as the business space and rural / small town America. In addition, it now has over 2 million fixed wireless access subscribers (FWA) and a path to grow it to 7 million to 8 million subscribers.

 

 

Highlights from the quarter:

  • T-Mobile led the US market adding 854,000 phone subscribers. AT&T added the second most phone subscribers with 708,000. T-Mobile continues to win over customers with its competitive service plans and sticky ‘un-carrier’ moves. Some of the most important are free Netflix, Apple TV+, free airline wifi, special 55+ plans, and no taxes or extra fees.
  • T-Mobile phone churn remained low at .88%. Service revenue increased 7% YoY.
  • T-Mobile sold about 6.3 million smartphones within postpaid channels. Smartphones sold or leased was down about 14% due to lower upgrade rates.
  • Prepaid added 105,000 subscribers and sold about 2 million smartphones. 155,000 subscribers moved from prepaid to postpaid service plans. Prepaid churn rose .3% QoQ to 2.88% but was flat YoY.
  • T-Mobile sold 2 million mobile broadband and IoT devices, a 33% increase. Smartwatches and tablets fueled the growth.
  • T-Mobile remains under indexed but has made significant growth within the business/enterprise segment. The company expects to grow its business market share from about 10% today to 20% by 2025. Business added record high customers during the quarter and revenues and grew 20%. Revenues have grown double digits for four consecutive quarters. T-Mobile is not the only carrier to see growth within the business segment. Verizon also added 197,000 business phone lines and revenues by about 2%. T-Mobile has gained some market share plus the business total available market has grown.
  • T-Mobile added government agencies, schools and universities, and SMBs at record levels and has seen record low churn within these segments. Recent business account announcements include Boeing, Ford, Delta and Vinsmart.
  • Like other carriers, T-Mobile has seen growth within IoT. T-Mobile has sensory based solutions, asset tracking, fleet solutions, and video surveillance solutions. With a ramped up sales force, it is attacking retail, logistics, smart cities and smart manufacturing.
  • T-Mobile added 578,000 FWA subscribers during the quarter and now has over 2 million FWA subscribers. The new service is a nice complement to its smartphone business. The FWA subscriber base is spread about 50% in suburban areas, and about 25% each in urban and small town / rural areas. The carrier believes it has a runway to between 7 million and 8 million FWA subscribers by 2025. Counterpoint Research surveys have shown performance and feedback has been very positive. Median 5G download speeds are about 187Mbps and the vast majority of subscribers use less than 100 GB per month showing the service is very sustainable. There are also opportunities for FWA to be a back up service to fiber broadband.
  • 5G network rollouts remain ahead of competitors. T-Mobile’s mid-band now covers over 250 million people.
    • During the recently ended Auction 108, T-Mobile added an additional 1 million POPs to its 2.5GHz mid-band spectrum.
    • It is likely T-Mobile will maintain its mid-band lead over the next 6 quarters. It is updating over 1000 towers per week.
    • The carrier completed decommissioning the Sprint network.
    • T-Mobile has Voice over NR (VoNR) live in several markets. T-Mobile claims to be leading VoNR on a global level.
  • The negative of the quarter was the slight decrease (.3%) in postpaid average revenue per account and flat postpaid phone average revenue per user. However, the Magenta MAX service was the most popular during the quarter. Only 20% of the base is on the Magenta MAX service plan, so there is a nice runway available.
  • During the quarter, T-Mobile announced its partnership with SpaceX. No services have been announced, but the carrier will use next gen satellite connectivity which T-Mobile subscribers will eventually be able to use in remote areas, mountains, and marine areas without cellular connectivity.
  • Outlook: Despite macroeconomic headwinds, T-Mobile has raised guidance during each quarter of 2022. The carrier expects to add about 3.2 million phone subscribers and over 3 million postpaid connected devices in 2022. T-Mobile will likely continue to lead US carriers in FWA growth due to its 5G mid-band lead. Q4 will be very competitive with the new iPhone launch and the aggressive promotional season of Black Friday, Thanksgiving and Christmas. T-Mobile will likely battle AT&T for net addition lead during Q4.

Jeff Fieldhack

Jeff has 25+ years experience in technology research, business development, competitive intelligence, and business management. Prior to joining Counterpoint Research, Jeff held various research & product development roles at Microsoft, Nokia, Roth Capital Partners, and Gartner. Jeff is a member of many telecom industry organizations including Colorado Wireless Association, repair.org, CommNexus, and is a regular speaker at major telecom industry events. He was a 4x NCAA all-American in tennis and is a 12-time finisher of the Hawaii Ironman World Championships.
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