T-Mobile US, Inc. (TMUS) – the fourth largest national telecom carrier in the U.S. – has registered record subscriber growth in 2014, owing to the success of its Un-carrier initiatives and aggressive promotional activities. Notably, the carrier has added 8.3 million net subscribers in 2014, up a whopping 89% from 2013.
Notably, the company has added 2.1 million net customers in the fourth quarter alone. In fact, the company reported branded postpaid net customer additions of 4.9 million in the year, considerably exceeding its own full-year 2014 guidance. In its third quarter of 2014, the company had forecasted net customer additions of 4.3 to 4.7 million in connection with postpaid subscriber growth.
In continuation of its impressive performance on the branded postpaid customer front, T-Mobile, in the fourth quarter alone, recorded 1.3 million new additions. Meanwhile, branded prepaid net customer additions in the quarter were 266,000 due to the continued strength of its MetroPCS’ business while branded postpaid phone net additions were over 1.0 million. Also, in the fourth quarter, Machine to Machine (M2M) net customer additions tolled 152,000 and Mobile Virtual Network Operator (MVNO) net customer additions were 434,000.
Moreover, throughout the year, the carrier continued to seize subscribers from its rivals. As a result, T-Mobile achieved an overall postpaid porting ratio of 2.1 to 1.0 against its rivals for full-year 2014. Also, for the fourth quarter, T-Mobile witnessed positive postpaid porting ratios, attracting customers at a ratio of 1.4 versus Verizon Communications Inc. (VZ), 1.8 versus AT&T, Inc. (T), and 2.2 versus Sprint Corporation (S).
Interestingly, the carrier now covers over 265 million people under its nationwide 4G LTE network. Also, recently, the carrier announced a plan under which it allowed customers certain data allotments to roll over unused data and use it within a year.
Furthermore, we believe the company has an attractive fundamental outlook based on increasingly favorable growth prospects in its Wireless business. Therefore, addition of branded customers, 4G expansion, smartphone sale and incorporation of MetroPCS’ prepaid business should not only support top-line growth in the coming quarters but also lend a competitive edge to the carrier against its peers.
T-Mobile currently bears a Zacks Rank #3 (Hold).
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