T-Mobile Had Fastest Growth Ever in Q3
T-Mobile added the most branded postpaid customers in its history in Q3, with 1.4 million net adds, the carrier said in an earnings release. The carrier said it added 10 million customers in six quarters and 6.2 million so far in 2014. But T-Mobile also slipped back into the red, with a loss of 12 cents per share in Q3, compared to a gain of 48 cents in Q2 and a loss of 5 cents in the year-ago quarter. Revenue came in at $7.35 billion -- up 9.9 percent over the same quarter last year.
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T-Mobile reported Monday, so CEO John Legere could appear at Re/code’s Code/Mobile conference later that day. A feisty Legere said there's no stopping his company as it continues to grow at a record rate. “The company is doing very well,” he said. “We absolutely kicked the shit out of the industry,” Legere said. “One of our best weapons is the ineptness of the industry and it continues.” Legere confirmed that T-Mobile recently raised $3 billion, giving the carrier plenty of cash on its balance sheets headed into the AWS-3 auction.
Legere took on Sprint, saying his earlier comments that T-Mobile would overtake it in total customers irritated Masayoshi Son, CEO of Sprint parent SoftBank. “They’ve gotten very aggressive” on net adds, Legere said of Sprint. “They’re not taking them from us. They’re taking them from AT&T and Verizon, if they’re taking any.” Sprint announces its results next week, the last of the major carriers to report. Legere offered free advice to Sprint. “Remember, your network blows,” he said. “They know it’s a year before it works.” Sprint had no immediate comment.
Legere said the U.S. wireless industry will likely look very different in just five years. The industry won’t always be made up of a dominant AT&T and Verizon with a smaller Sprint and T-Mobile, he said. “There’s just too may other players who are going to come into this space,” he said. “Five years from now there’ll be at least three other big players playing in this space.” T-Mobile’s string of announcement on its becoming the un-carrier aren’t “programs, they’re philosophical desires to change the industry,” Legere said. T-Mobile recently unveiled its seventh un-carrier initiative -- Wi-Fi calling across all its new smartphones.
Legere said the FCC understands that the competition T-Mobile is bringing is inherently good. “Maybe there’ll be a potentially preferential ruling in Washington associated with roaming prices,” he said. T-Mobile filed a petition at the commission in May asking for a declaratory ruling containing guidance and “predictable” enforcement criteria for determining whether the terms of data roaming agreements meet the “commercially reasonable” standard adopted in a 2011 data roaming order (see 1408220055).
In a blog post Monday, AT&T Vice President Joan Marsh said T-Mobile is seeking a do-over, not clarification. T-Mobile is “seeking radical changes in those rules that would gut the balance the FCC struck between ensuring the availability of commercially reasonable data roaming services while maintaining incentives for carriers to build out their networks,” she wrote.
AT&T has negotiated more than 30 data roaming agreements since the release of the data roaming order, eight of which cover LTE roaming, Marsh said. “Those declines include very marked declines in the rate T-Mobile is paying to AT&T. That rate is more than 70 percent lower than it was just three years ago, and it compares favorably with the rates T-Mobile claims it pays other providers."
Paul Gallant, analyst at Guggenheim Partners, predicted in a report Monday that the FCC will give T-Mobile some of the guidance it is seeking on roaming. “We believe an FCC ruling by December is realistic,” Gallant said.
Legere reflected on its unconventional persona -- a CEO who wears magenta T-Mobile t-shirts, tweets constantly and bluntly takes on competitors. He works for button-down German telecom company Deutsche Telekom, he said: “You’ve got to admit, me and Deutsche Telekom together is fascinating. Kim Kardashian got 10 years running on a reality show. I’ve got her on this one.”