T-Mobile brings in another 1.3 million postpaid subs
T-Mobile last week announced the results of its Q3 3021 operations, and the carrier has had another impressive quarter, boasting 1.3 million new postpaid subscribers. Just a little over half of these new postpaid lines (673K) were phones, meaning the carrier had over 600K new non-phone postpaid additions during the quarter. T-Mobile said it signed up 110K new FWA customers and provided guidance of half-million customers by the end of the year. Notably, this figure was exactly double the amount of FWA subscribers announced by rival Verizon, which shares a similarly aggressive FWA growth agenda as T-Mobile. The carrier also announced that it signed up 268K new phone accounts during the quarter, a record figure compared to previous Q3 performances. T-Mobile’s postpaid churn, on the other hand, was recorded at 0.92%, which was over rival AT&T’s 0.72% figure for the same period. Finally, the carrier announced a prepaid growth of 66K new lines, down from last quarter’s 76K but up from the 56K new adds recorded in Q1 2021.
The NPD Take:
- T-Mobile’s 677K new phone net adds are quite a figure for a Q3 performance, but it is notably behind rival AT&T’s industry-leading 928K postpaid phone net adds. AT&T also enjoyed a relatively lower churn rate thanks to its aggressive upgrade promotions targeting its user base. We expect the performance gap between AT&T and T-Mobile to remain in Q4 as AT&T’s promotional incentives are applicable for all unlimited plan tiers, while T-Mobile requires users to sign up for the top tier Magenta Max plan to enjoy the full discount on devices.
- T-Mobile’s 500K end-of-year guidance for its FWA user base suggests that the carrier is confident in bringing in another 400K new FWA users on top of the 110K new FWA signed up in Q3 2021. T-Mobile’s FWA services are already available to 30 million households and as the carrier grows its FWA coverage as well as rural distribution, the guidance provided is attainable.
Dish has yet to find the remedy to stop the erosion at Boost Mobile
Dish Network, the parent company of Boost Mobile, announced that lost another 122K subscribers on top of the 373K subscribers churned in the first half of the year to end the quarter with 8.77 million subscribers. Even though the Q3 performance was slightly better than the Q2 performance when it lost 212K subscribers, Boost Mobile’s quarterly churn was 4.61%, up from 4.40% in Q2 2021. Boost Mobile, which was running its operations as a wholesale MVNO on the T-Mobile network, switched to AT&T’s network in July 2021. The MVNO was previously hit by T-Mobile’s announcement that it will shut down Sprint’s legacy CDMA network on January 1, 2022, but T-Mobile recently announced the extension of its 3G network shutdown by another three months. Customers using older LTE/CDMA phones will lose connection when out of an LTE zone once T-Mobile pulls the plug on the Sprint CDMA network.
The NPD Take:
- Dish’s slightly improved subscriber decline performance can partially be attributed to its new white-label phone, the Celero 5G, which is bundled with a 12-month free unlimited data plan package.
- The prepaid market has always been a high-churn environment, but we have been seeing notable improvements at Boost’s prepaid rivals. The MVNO had a 4.61% churn rate in Q3 2021 versus AT&T and T-Mobile’s prepaid operations at under 3% churn and soon-to-be-Verizon’s Tracfone at a 3.8% churn rate.
- T-Mobile’s sunsetting of the legacy CDMA network will have significant implications on Boost Mobile’s bottom line as the MVNO will have to force these users for a device upgrade that it will have to finance. Moreover, this is happening at a time when finding sub-$200 device inventory gets tricky as chipset vendors focus their operations on the high margin 5G chipsets.