T-Mobile, the little magenta phone company that could, isn’t so little any more. On Wednesday, it posted yet another stellar set of quarterly results, blowing away analyst estimates on the financial side. But far more importantly, it showed a record-low rate of customer attrition — in other words, customers are staying loyal and staying with T-Mobile.
In today’s cut-throat mobile world, loyal customers are worth their weight in gold, and T-Mobile’s stellar earnings shows why.
On two key metrics, T-Mobile smashed the analyst estimate. T-Mobile added 786,000 phone subscribers on postpaid plans in the second quarter, which ended June 30th. In the same quarter last year, T-Mobile added 646,000, meaning it increased customer growth by over 30,000 customers per month year-on-year.
Even better, the “churn” in customers was 1.1%, a record low for T-Mobile and a massive result considering the current state of the wireless industry. Over the last few months, T-Mobile’s competitors have rolled out their best-priced plans in years: Verizon has a reasonable Unlimited plan, AT&T is more aggressive on the low-end plans, and even Sprint is offering a year of free Unlimited service.
In the face of all that, T-Mobile’s net income rose to $581 million from $225 million a year earlier. That meant that earnings per share were 67 cents, compared to 25 cents per share a year earlier. Even analysts were only expecting 38 cents per share.
In light of all that, T-Mobile seems to be somewhat reconsidering the need to merge with another company in order to cash out. Rumors have been swirling for years that T-Mobile and Sprint will merge, but that plan seems to be slowing down a little. On the earnings call, T-Mobile CEO John Legere acknowledged the merger talk, but suggested that growth could come from within the company, rather than from a merger.
