★ T-Mobile Releases Q1 2017 Earnings, Improving Margins, Slowing Sub Growth (Apr 24, 2017)
T-Mobile released its Q1 earnings today, and there were quite a few familiar trends: strong revenue growth, improving margins, and lots of talk about how awful TMO’s competitors are. But this quarter also saw a return to the slowing subscriber growth we saw in the first half of last year, which is indicative of T-Mobile’s business today: it’s doing very well within what’s a rapidly slowing market with very little additional headroom. All four of its major customer categories (postpaid, postpaid phones, prepaid, and wholesale) saw lower net adds year on year. In the case of both prepaid and wholesale, the decline was signifiant, and wholesale net adds were negative for the first time in recent memory. T-Mobile said it did very well against AT&T in the quarter, which means for AT&T itself to have done well overall it will have had to hold its own much better against Sprint (which hasn’t yet reported) and Verizon (which has, and had a horrible quarter). T-Mobile continues to invest very heavily not just in spectrum but also in store expansion – it’s now targeting 3000 new stores this year, split evenly across its T-Mobile and MetroPCS brands, up from 2500 at the start of the year. So far, the strategy continues to work reasonably well, but there’s a ceiling on growth in the categories T-Mobile targets, especially with Verizon and AT&T getting back into unlimited, so I’m curious to see how much growth slows in 2017, though it appears margins are going to continue to improve anyway (though they’re still way below those of the two big carriers).
via T-Mobile (PDF)
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