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February 9, 2018

T-Mobile keeps adding more customers with low prices and freebies

by John_A

The U.S. smartphone market is seeing pink. On Tuesday, February 6, T-Mobile announced record revenues and net income in the fourth quarter of 2017, proving that the Un-carrier is truly a force to be reckoned with in the mobile world. For the fourth year in a row, T-Mobile managed to add more than 5 million customers, and moreover, the company claims to be the only company in the wireless space that is “consistently growing service revenues.”

In the five years since the Bellevue, Washington-based service provider unveiled its Un-carrier campaign and tagline, American customers have seemed quite eager to join the network. T-Mobile’s reported customer base has grown by more than 39 million in total, which represents more than 100 percent growth. Quarterly profit also increased sharply, reporting a $2.2 billion gain thanks to the recent amendments to U.S. tax laws.

In the fourth quarter of 2017, T-Mobile reported adding 891,000 phone subscribers, slightly lower than its 2016 fourth-quarter results, when the company managed to add 933,000 subscribers. Still, these figures represent strong growth for the third-largest carrier in the country.

So what is driving this change? It would appear that lower prices and perks like T-Mobile Tuesdays, what with its discounted movie tickets and other freebies, are attracting more and more customers. Indeed, T-Mobile is continuing to take subscribers away from chief rivals Verizon and AT&T and is certainly holding its own in a market where there are plenty of players.

T-Mobile is also selling plenty of devices — last quarter, the company managed to sell or lease 9.7 million phones (both smartphones and non-smartphones), compared to 8.7 million units in the third quarter. And looking to this year, T-Mobile expects to add an additional 2 to 3 million subscribers. This appears to be in line with estimates from Wall Street — as Reuters reports, JPMorgan noted that these figures aligned with their own projections.

Key to T-Mobile’s growth this year could be Layer3 TV, a new startup that the company acquired late in 2017. As we noted in December, the company is planning to take on satellite and cable providers by launching a “disruptive new TV service in 2018.” Layer3 TV calls itself “the new cable,” and has its own IP network, which allows it to send high-definition video to homes at levels of bandwidth similar to Netflix. Layer3 TV is currently only available in five U.S. cities and provides more than 275 channels, including ESPN, NBC, AMC, and other popular channels at higher video quality than similar services. The TV provider also mixes video content from streaming services and social media with broadcast and cable channels.

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