As T-Mobile US CEO John Legere wraps up his fifth year with the self-described “un-carrier,” the company is proving that it can continue to add customers even in a relatively stable market with historically low churn rates.
T-Mobile’s “Netflix on Us” promotion helped the company add roughly 1.9 million customers during the fourth quarter of 2017. 1.1 million of those were branded postpaid net additions, 81% of which were phones. For all of 2017, T-Mobile secured 5.7 million net customer additions, 2.8 million of which were branded postpaid phones. The company released those numbers in a preliminary report; its fourth quarter earnings report is still more than a month away.
Customer churn fell to 1.18% in the fourth quarter, T-Mobile said, down from 1.28% a year ago. T-Mobile enjoys one of the lowest churn rates in the industry, but all four nationwide carriers are seeing much less turnover than they saw a couple of years ago.
T-Mobile’s continuing customer growth in a somewhat stable price environment is giving the company the confidence to invest strategically. This week the company’s executive team told an investor conference that after years of “investing every red cent we could get our hands on … into our network,” T-Mobile is now ready to look at “adjacent opportunities,” meaning acquisitions.
T-Mobile’s plan to merge with Sprint did not work out, but the company did recently announce a deal to purchase Layer3 TV, and management says it is open to new opportunities.
T-Mobile may also be dedicating cash to a stock repurchase program. The company’s board has authorizezd the repurchase of $1.5 billion of TMUS common stock through December 31, 2018. The repurchase program does not obligate to buy stock, and any shares purchased will be retired.
But the network remains T-Mobile’s top investment priority. This week CFO Braxton Carter told investors that putting the customer first is T-Mobile’s top priority, followed closely by investment in the network.
“The second priority really is the foundation and that’s the network – continued significant investment in the network, and innovation — leading the industry on multitudes of technology,” Carter said.
T-Mobile US is positioning itself as a technology leader for the internet of things with the launch of a narrowband IoT network. While other nationwide carriers are focused on LTE Category M1, T-Mobile US is the first to launch NB-IoT.