T-Mobile/Sprint merger finds a new enemy in mysterious lobby group

A new non-profit organization called ‘Protect America’s Wireless’ has emerged, seemingly with the sole objective of hurling spanners at the T-Mobile US and Sprint merger.

Details on the group are relatively thin at the moment, it was only founded last month, though a press call introducing the group and its mission statement on the website both seem to give the same message; the T-Mobile US and Sprint merger will be bad for the national security of the US.

“We must protect our networks from foreign spying,” the team announces on the websites homepage. “Our greatest concern is the pending Sprint T-Mobile merger, which could give countries like Saudi Arabia, China, Germany, and Japan direct access to our networks through the use of foreign-made networking equipment and billions of foreign money. We call on President Trump, Congress, and the FCC to protect American national security by denying these foreign interests access to America’s wireless communications.”

On the press call, David Wade, Founder of Greenlight Strategies, suggested a merger of the two telcos would open up the US to a Chinese ecosystem, while also suggesting any business working closely with Chinese vendors would effectively handover data to the Chinese government. While it is true Sprint owner Softbank has collaborated closely with Huawei and ZTE in the 5G R&D journey, this seems to be taking the conspiracy theory up another level. Deutsche Telekom, parent company of T-Mobile US, also has ties to Chinese vendors, but there aren’t many telcos who don’t.

The theory here is a merger between the two telcos would be bad for national security, effectively handing China a key to the backdoor. There have certainly been objections from a competition perspective, but this is the first we’ve seen with this angle. It’s difficult not to be suspicious about who the puppet master actually is.

Interestingly enough, the group has declined to discuss where funding is emerging from. As a 501c4 non-profit, the team do not have to disclose funding or ownership details, though they are permitted to attempt to influence politics as long as it isn’t their main area of focus. While the groups attempt to tackle US security is a thinly veiled attempt to demonstrate ‘social welfare’, as long as the group isn’t spending more than half of its funds on political-related activities, it can continue to operate half-hidden by shadows.

Finding out who is funding this organization is key to figure out what the angle is and whether this is yet another example of propaganda, though it is not necessarily a simple task. 501c4 non-profits have to complete a Form 990 for the IRS, on which any donations above $5,000 have to be disclosed. Unfortunately, due to the efficiency of the IRS, there is usually a 12-18 month lag on this information being made publicly available.

Until the influencers and donors of this group have been identified, this could be a very dangerous source of misinformation. Statements being made might very well be true, but without transparency it would be safe to be suspicious.

T-Mobile US finds a new way to troll AT&T and Verizon

T-Mobile US is testing out a new way to mock AT&T and Verizon by inviting the duo to its own TEX Talks seminars and panels on how to improve customer service.

Taking place on 24-25 October at its Charleston customer experience centre, T-Mobile US will host various companies from around the US, offering advice on how to improve relationships with customers and reduce churn. Of course, never missing a chance to poke fun at AT&T and Verizon, CEO John Legere has made it clear they are invited to the event, even if they are currently ignoring his calls.

“As the Uncarrier, we’ve always been about changing this industry for good…with Team of Experts, we’ve done it again,” said Legere. “And we won’t stop with wireless. Customer service is utterly broken in this country – it’s a mechanized mess. We’ve completely changed the game for customers, and we hope every brand steps up to do the same.”

While Team of Experts might not be the most exciting of Uncarrier moves, it certainly seems to be having a notable impact on the business. T-Mobile US has stated Net Promoter Score (NPS) is up 60% since introducing the new focus on customer service, while asynchronous messaging with care is up 34% and churn of customer service staff is down 48%. It’s not the headline grabbing Uncarrier move of yesteryear, but goods things are happening.

Announced back in August, the aim of the Team of Experts Uncarrier move was to revamp customer services and improve loyalty. The industry has come to expect big things from wild-eyed Legere when launching new Uncarrier moves, though this is not exactly the blockbuster we’ve gotten used to. However, three months on, the ‘rock star treatment’ for customers does seem to be working.

It might not be the venture into the world of content many were expecting, though it is a welcome surprise. The telco industry is traditionally awful at customer services, choosing to lock in customers with long contracts and create a red-tape maze for those who want to leave. Loyalty was enforced by making churn so difficult as opposed to creating a proposition customers want to be a part of. This move seems to be challenging the status quo.

Customer services can be a differentiator moving forward as the price wars seem to have come to a conclusion. There will continue to be undercutting and promotions, though the telcos cannot go much lower on tariffs and maintain the profit margins desired by investors. T-Mobile US has done a great job of disrupting the industry and capturing subscriptions, but momentum will run low if the same message is played on repeat.

There has been signs across the world telcos are starting to care more about their customers, Vodafone is a great example in the UK with its own customer services initiatives, though these are still the exceptions not the rule. More work needs to be done to correct years of wrong-doing.

That said, Legere’s trolling is always a bit of fun.

Legere casts wild eyes over to the world of banking

SEC-filings have emerged suggesting T-Mobile US is looking into creating a banking product for its customers which could be launched in a matter of weeks.

The documents, which have been filed by Customers Bancorp, describe a partnership which has been in place since September 2016, with the two parties coming together to build the relevant technology and products since. Details are relatively thin on the ground as it stands, though in naming T-Mobile in the documents it is a pretty sure sign of diversification from the telco.

With more customers showing readiness to adopt mobile banking solutions the idea does make sense. T-Mobile US is constantly looking for new opportunities to laud over the ‘duopoly’, as CEO John Legere describes AT&T and Verizon, so it should come as no surprise the team are looking for new ways to engage customers.

Although T-Mobile US would not be considered a challenger brand in the same way as Iliad in Italy or Jio in India, the shake-up of the business under Legere’s leadership has created a similar disruption. T-Mobile US has continuously boasted of collecting new customers with ease quarter after quarter, but such momentum can only last so long; new ideas are needed.

In India, Jio has diversified into content and also hinted at an assault on the broadband market, though T-Mobile US has resisted such pleasures to date. The introduction of financial services is simply another tool in the shed for T-Mobile US to maintain its current course. The last few Uncarrier moves have not been the earth shakers of yesteryear, though this would certainly capture the attention of the masses.

With a huge customer base, 73 million subscribers, and a sound relationship with said customers, churn was 0.95% during the last quarter, the foundations are steady. However, the big question is whether the T-Mobile US brand, led by the eccentric and wild Legere, can present itself as a business in which consumers would be confident in dealing with for their finances.

Banks do not generally present themselves as fun or charismatic brands mainly because dealing with an individual’s money is a serious matter. People will want their cash handled by a man who looks like a stereotypical accountant, not a 40 year-old frat-boy. This is perhaps one of the issues T-Mobile US will have to assess, as Legere does not give the impression of the most trustworthy banker.

FCC drafts in external opinion to figure out the T-Mobile-Sprint conundrum

Perhaps realising the gravity of the situation, the FCC has drafted in outside help to assess the impact of the T-Mobile-Sprint merger on the US economy.

David Sibley will help the team as an outside consultant reporting into David Lawrence, who is leading the merger taskforce. This should not be seen as an unusual move from the FCC, though perhaps such external opinions should have been brought in earlier considering the impact this merger will have on the telco landscape and competition.

“We are fortunate that Professor Sibley is bringing his considerable economic experience and expertise to bear in this review,” said FCC Chairman Ajit Pai. “Rigorous economic analysis plays an important role in all of the Commission’s work and will be essential to a thorough investigation into whether approval of this transaction would be in the public interest.”

This is the big question. The merger will bring the number of national telcos down from four to three, but is this a good or bad move. There are arguments on both sides.

The bad side of the argument is a simple one. Removing one of the major telcos from the ecosystem will reduce competition and hurt the consumer through higher pricing due to a lack of choice. This is not a complicated point to make and a genuine concern, especially in a country like the US which where telcos do not operate everywhere. The risk of monopolies or duopolies in certain areas increases.

On the positive side, while the number of massive telcos decreases, competition increases as the merged entity would offer a more valid threat to AT&T and Verizon through the combined scale. T-Mobile US CEO John Legere often refers to AT&T and Verizon as the duopoly, and while this is an exaggeration, they are miles ahead of T-Mobile and Sprint in third and fourth place. T-Mobile and Sprint are not at the right scale to compete with the leaders individually, but together the merged organization would offer greater scale. The theory here is reducing competitors would make the market more competitive, therefore better for the consumer.

This is the conundrum which the FCC needs to decide on. Evidence and experts will be aplenty on both sides of the argument, though Sibley certainly adds some expertise to the team.

Sibley is currently the John Michael Stuart Centennial Professor of Economics at the University of Texas at Austin. Prior this role, Sibley worked Head of the Economics Research Group at Bell Communications Research, as well as the Deputy Assistant Attorney General for Economic Analysis in the Antitrust Division of the US Department of Justice. He also represented the US in OECD discussions.

As it stands, the merger shot clock is currently on pause, with the FCC deciding it does not want to be rushed. The approval or rejection of mergers and acquisitions are targeted to be completed within a 180-day window, though the FCC is offered the luxury of taking longer if it is a particularly complicated case. This is proving to be one, with the FCC requesting input from competitors of the pair recently, most notably from players outside the mobile ecosystem, suggesting it is investigating the impact on such segments as broadband.

T-Mobile gives prepaid customers the 5G luxury

T-Mobile has become the first US telco to commit the 5G euphoria to its prepaid customers, alongside unlimited plans which will feature Amazon Prime and Google One.

Previously known as MetroPCS, the prepaid brand has been shortened to Metro, and is the first service to commit to 5G as a prepaid offering. Starting from $30 a month and heading up to $60, the various plans are data-centric, aiming to appeal to teenagers and millennials.

“When we talk about 5G for All, it’s not just nationwide 5G service but it’s all shades of T-Mobile, Magenta and Purple,” said Neville Ray, CTO at T-Mobile. “5G is going to be huge. It’ll transform the wireless experience. Metro by T-Mobile customers deserve access to the latest technology, and we’ll make sure they get it.”

The new offers will be available to customers as soon as 5G-capable phones hit the market in mid-2019, though that hasn’t stopped the Magenta Army from preaching the benefits today. Prepaid services are often viewed with an air of distaste, though committing to 5G services certainly adds to the blur between prepaid and postpaid.

The basic difference between prepaid and postpaid is simply the billing function, though postpaid are more attractive to the telcos due to the lower risk of churn. With this enforced loyalty, benefits have traditionally been directed towards this segment, i.e. subsidised devices or value-adds such as free subscriptions, though the landscape does seem to be shifting. Benefits are being offered irrelevant of whether a customer is prepaid or postpaid.

Customers of the top two tiers of these tariffs will receive a free Google One 100 GB cloud storage account, while those selecting the top-tier will also get an Amazon Prime subscription. The 5G commitment from T-Mobile US is just another example.

“I couldn’t be more proud of today’s launch and what it means for our customers and potential customers,” said Tom Keys, President, Metro by T-Mobile. “Truly nationwide and unlimited service on the most advanced LTE network and now with Amazon Prime and Google One. There’s not a better value in wireless. And with a commitment to bring 5G to life in 2019, we’re making it crystal clear: Metro by T-Mobile customers aren’t making a compromise. They’re refusing to make a compromise.”

FCC says new material means it needs more time to assess TMUS/Sprint merger

The US Federal Communications Commissions has indefinitely extended the amount of time it will take to sign off the country’s operator mega-merger.

Referring to an ‘informal shot clock’ of 180 days in which to assess the pros and cons of T-Mobile US and Sprint permanently hooking up, the FCC announced in a letter that it is being paused. The only stated reason is the submission of new material from TMUS that significantly alters the criteria by which the FCC will make its assessment, thus requiring more time.

“Today we are pausing the Commission’s informal 180-day transaction shot clock in this proceeding,” opens the letter. “Additional time is necessary to allow for thorough staff and third-party review of newly submitted and anticipated modeling relied on by the Applicants.

“Each of three separate developments require more time. First, on September 5, 2018, the Applicants submitted a substantially revised network engineering model… The newly-provided network engineering model is significantly larger and more complex than the engineering submissions already in the record.

“Further, in an August 29, 2018 exparte meeting, T-Mobile executives Mike Sievert and Peter Ewens described T-Mobile’s reliance on a business model, titled Build 9,’ which apparently provides the financial basis for the projected new network buildout. The Commission did not receive Build 9, and third parties did not have access to it, until September 5. Build 9 therefore requires further review.

“Finally, T-Mobile recently disclosed that it intends to submit additional economic modeling in support of the Applications, beyond that strictly responsive to the various economic analyses in the Petitions to Deny. This new economic modeling will also require additional time for review.”

So, in essence, TMUS recently decided to offer up a bunch more material in support of the merger and the FCC needs more time to review it. Seems fair enough. “The clock will remain stopped until the Applicants have completed the record on which they intend to rely and a reasonable period of time has passed for staff and third-party review,” concludes the letter. How long that reasonable period of time will be is unclear.

T-Mobile US and Sprint finally get some support for merger

Budget MVNO Ting Mobile has come out in support of the proposed T-Mobile US and Sprint merger, standing pretty lonely opposite the waves of opposition.

In a letter to the FCC, Elliott Noss, CEO of parent company Tucows, has penned his support for the merger. While there certainly will be support for the transaction outside of the T-Mobile US and Sprint offices, Noss is creating a pretty lonely silhouette at the moment.

“In a general sense, we think the T-Mobile/Sprint merger makes strong business sense and will generally benefit most stakeholders,” Noss states. “For greater clarity, we view the group of stakeholders as customers, employees and investors, in that order.

“We believe customers will benefit from a more efficient, profitable company which will allow greater investment in building the current Sprint spectrum in particular. We are uncertain whether customers will benefit from lower prices as we have seen in Canada (with the most expensive mobile phone service in the world) that three competitors and no MVNO presence in the market leads to clear oligopolistic pricing and a minimum of competitive pricing pressures.”

While the queue opposing the merger has been growing over the last few days, T-Mobile US has apparently been lobbying MVNOs and customers to build its own legion of support. There there have been few public statements so far, this might well be the first, and although Tucows is not a massive player, having an established business will count for something.

For those who are not aware of Tucows and its Ting Mobile brand, the organization operates out of Ontario in Canada and Mississippi in the US, using both Sprint and T-Mobile US’ networks. The firm generated revenues of $81 million for the quarter ending August 8, with a net income of $3.6 million. This quarter demonstrated a 4% decline in revenues, though the firm is up 15% year-on-year for the first six months.

The general message here seems to be one which contradicts that of the bigger telco boys; light-touch regulation is the way forward and this merger will benefit US consumers and businesses.

Looking at the opposition, the Communications Workers of America (CWA) union, satellite operator Dish and MVNO Altice USA were the latest to join. Dish and Altice USA have both stated the merger would make them reconsider entering the mobile race in the US, though Tucows clearly believes this is a lot of hot air. The merger would not prevent it from succeeding in the future.

“We had chosen Sprint and T-Mobile as our service providers originally for a variety of reasons, including price, device compatibility, territorial coverage, protocol coverage (CDMA and GSM), and MVNO-friendly policies and practices,” Noss states. “These factors were not the same for both companies. In some cases, Sprint is stronger than T-Mobile. In other cases, T-Mobile has advantages. Mostly, we chose to add T-Mobile as a second network in 2014 in order to have diversity of supply and to have some leverage with our suppliers in hopes of balancing an unequal bargaining position.

“In combination, a new Sprint/T-Mobile entity should continue to provide diverse support for geography, protocols, and device support. Sprint and T-Mobile, however, have different approaches to pricing and MVNO policies and support generally, and they have not announced which practices will prevail in a post-merger company.”

Noss believes a healthy MVNO sector can compensate for reduced competition as a result of the merger, and this ecosystem should be given more attention by the FCC. Neglecting the MVNO market would create the same sticky situation Canadians are facing in terms of competition, which would have more of a negative impact that the combination of Sprint and T-Mobile.

This is an opportunity for Noss to have a moan at regulators for neglecting the MVNO market to date, most notably the adoption of eSIMs, however it is fundamentally in support of the merger. Tucows might be a minnow on the US telco scene, but should the T-Mobile US lobbying efforts work, enough support from the MVNOs will have to be taken into consideration. Could this be the first of many…

CWA, Dish and Altice USA join the T-Mobile/Sprint opposition

With conflicting predictions on the outcome of the industry’s biggest will-they/won’t-they flying everywhere, opposition to the deal from a communications union, Dish and Altice has started to scrap for attention.

The Communications Workers of America (CWA) union, satellite operator Dish and MVNO Altice USA have all aired their grievances, as the industry seemingly turns against the prospects of reducing competition across the US. While we suspect politically-minded individuals actually care very little regarding the concerns of Joe Bloggs, enough resistance from corporations could certainly have an impact on the decision making process.

Mergers of this nature are particularly sensitive to authorities due to the direct impact on competition. The difficulty is focused around the idea of ‘public interest’, a loosely defined term which underpins opinion in a huge number of legal cases in the US. Unfortunately for the US and its citizens, the definition of ‘public interest’ can depend on numerous factors and is rarely 100% consistent.

Looking at the opposition raised in recent days, the focus seems to be around three themes; competition, national security and jobs. Competition is the main focus here, so will get the lion’s share of attention.

When looking to raise support for the transaction, T-Mobile and Sprint executives have pointed towards the idea of consolidated networks and more efficient supply chains to bridge the gap created by AT&T and Verizon at the top of the communications rankings. According to Dish and the CWA, this is nothing more than hot air, as neither organization needs the merger as a means to provide 5G services or could not exist without the deal. As 5G services would be brought without the proposed tie-up, the public interest aspect is questioned as why would it be logical to remove a fourth player.

Another interesting point is the spectrum screen. The FCC gets very fidgety when one telco controls more than 33% of available spectrum in a given region, though should the deal go through, this would be the case across 66% of the US, a landmass which acts as home to 92% of US citizens according to the CWA. Altice USA believes one of the conditions of the deal should be the divestment of spectrum which exceeds the screen, as well as the associated network infrastructure, to improve opportunities for MVNOs and smaller telcos.

But perhaps the most important assertion here is the prevention of competition. Dish has stated the tie up would possible prevent it entering the wireless market with its own offering, while Altice USA has expressed concerns over whether the new organization would honour its own MVNO agreement with Sprint. Altice USA has said it is on track to launch an offering in 2019, though there have been no guarantees its ability to compete would not impaired by the transaction.

Predictions on whether reducing the number of wireless operators from four to three vary quite considerably, though there will certainly be concern if MVNOs start rowing backwards due to the deal. Taking Sprint out of the equation is one problem, but MVNOs disappearing will have another painful impact on competition.

Dish argues customisation of radios, chipsets and devices by the new organization would prevent it from entering the 5G mobile voice/broadband market, or at the very least delay it. Altice USA has pointed to comments from T-Mobile US CEO John Legere, which it believes demonstrates hostility towards MVNOs. Finally, the CWA has suggested the removal of head-to-head competition between the pair would be detrimental, while each has a viable future in the 5G world as a standalone business.

Looking at the other arguments, there seem to be less credibility. On the jobs front, the CWA predicts under the proposed terms of the transaction, 28,000 jobs would be sacrificed. 12,600 would be in the postpaid business, 11,800 in the prepaid and 4,500 in head office roles. As with any merger, there will certainly be crossover and therefore redundancies, though considering the combined workforce of the two organizations is in the region of 80,000-90,000, we can’t imagine redundancies will be as high as 33%.

In terms of national security, the CWA suggests Softbank is too close to Huawei and ZTE. The union quotes Sprint executives, claiming they have praised the technology of the two vendors, though this is hardly a surprise; many telcos around the world have paid compliments to Huawei in particular for the excellence of products, customisation and account management capabilities. Huawei is the market leader for communications infrastructure for a reason.

The national security argument seems to be nothing more than a shallow attempt to rile paranoid politicians who already have a Chinese bee in their bonnet. The link appears to be a smear attempt, attributing comments which are far from uncommon to a single business. It is an underhanded move and undermines the credibility, assuming it has much, of the union.

Although we do not see much substance to the employment and national security arguments, the competition concerns from all three are somewhat justified. Authorities will certainly have some alternative ideas to consider and it tough to see how this merger will be approved within the 90-day targeted window.

Legere gives up the weird and wonderful for loyalty-focused Uncarrier move

Revamping customer services and launching a loyalty programme might be very intelligent plays by T-Mobile, but it isn’t quite the grandeur of kick-starting an assault onto the TV content market.

Whenever CEO John Legere pulls on the magenta t-shirt, applies the gallons of mousse to the hair and presumably drinks 15 shots of espresso to get the authentic wired look, the industry has come to expect big, disruptive and combative things with Uncarrier announcements. The latest ‘challenge’ is somewhat more traditional than we are now used to as the norm with the eccentric CEO.

Back in January, when T-Mobile US completed the acquisition of Layer3 TV, it paved the way for the magenta army to tackle the convergence market. T-Mobile has been promising a disruptive TV service and is yet to deliver. When Legere decided to stoke the fire of excitement by telling us the next Uncarrier move was coming this week, assuming it would be the TV embrace would have been a fair bet. The reality is functionally a great route for the business, but it isn’t anywhere near as stimulating as what we imagined, even if Legere does his relatively-shallow excitable-puppy routine.

The banner for the new initiatives is ‘Rock Star Treatment’, which does seem to be a rip-off of the Virgin Atlantic adverts of yesteryear. The first prong will be to revamp the customer services operations, creating a proposition where the customer feels valued. Despite Legere claiming this is disruptive, it is something which should have been done anyway. The song-and-dance surrounding the upgrade just illustrates how little telcos think of their customers in the first place. Secondly, the loyalty programme is very similar to the proposition which O2 has built in Priority. It’s a very effective loyalty programme for O2, so we have no issue with Legere ripping off the UK market leader.

“Our customers get treated like rock stars with Team of Experts, and we believe they ought to be treated like that everywhere they go,” said Mike Sievert, COO at T-Mobile US. “Music connects us, so we’re connecting our rock star customers with exclusive magenta extras at Live Nation events and with Pandora. Now, when they turn on their tunes or head to a show, they’ll get an elevated experience, just for being with T-Mobile.”

On the customer services side of things, the T-Mobile Team of Experts has been launched nationwide which promises no robots or automated phone menus, and a dedicated customer services representative who will be assigned to a customer. As part of the initiative, Legere has promised you will talk to an actual person, no bouncing from department to department, 24/7 call centres, call-back features will be introduced and integration with Alexa or Google who will be able to assist negotiating the beige maze.

Some of these features are welcome additions to the customer services mix, while other are something the telco should have been doing anyway. Although this is hardly the most exciting aspect of the communications world, it is a critical one. Telcos who take customer services seriously are the ones who have the lowest churn and highest Net Promoter Score (NPS). Many business experts will tell you it is more profitable to keep current customers happy that constantly chasing acquisitions to replace the churn. It seems like an obvious thing to say, but with the attitudes of the telcos, you wonder whether it has hit home. T-Mobile is seemingly making efforts to improve here, and the second aspect of the Uncarrier launch will also add to momentum.

The second aspect is a loyalty programme. Here, a partnership with Pandora will offer Uncarrier customers a year-long Pandora Plus subscription, and through a tie-up with Live Nation, will have exclusive and early access to gigs, as well as discounted tickets. This is an approach to retention and rewarding customers which we really like and smells very similar to O2’s strategy.

When looking at free value-adds for customers, some telcos look at big ticket items like sports. While this might attract certain customers, the risk is there is little interest from others. A focus on music offers breadth and accessibility. With Pandora, customers can choose their genre, or tap into alternative content such as podcasts and radio stations. It offers something for everyone. With the Live Nation tie up, this is relatively risk free as it gives the consumer the choice of what to purchase. T-Mobile is offering value to the customer through discounts and early access, though it is placing the financial commitments on the consumer. They choose what they want, but are receiving value through being a T-Mobile customer.

Overall, this is an alternative approach to convergence. The ventures into content are not to generate revenue directly through increasing ARPU, but focused on retention of customers. Offering value-adds for free makes the customer feel rewarded and an indirect boost for the bottom line. Securing customers for the long-term is an excellent way to improve profitability, and a better relationship with customers will only create more brand ambassadors.

While this is not the devilish and enticing Uncarrier move which we have become accustomed to with Legere and his wild eyes, it is a pragmatic business strategy to secure the user base and improve the foundations. If T-Mobile US can take it retention capabilities up to the same level as its subscriber acquisition, the duopoly might not be that far on the horizon after all.

T-Mobile US hits 21 consecutive quarters of 1mn subscription adds

Another three months have passed and yet again we are reporting about the eccentric John Legere and his unique use of punctuation cooing over 1.6 million net additions to T-Mobile US subscriber numbers.

With these new customers in the 21st consecutive quarter of at least 1 million net adds, it now takes total subscribers in the T-Mobile US grasp to 75.6 million. Total revenues are up 4% to $10.6 billion across the second quarter, while the 4G LTE network now covers now covers 323 million people, just 2 million short of the end-2018 target.

“T-Mobile just recorded its best Q2 in company history,” said John Legere, CEO of T-Mobile US. “That means 21 quarters with over one million net adds, record-high service revenues, industry-leading postpaid phone net additions, and record-low postpaid phone churn. Our business is strong, our strategy is working and we won’t stop.”

While these numbers are certainly something for the boisterous and unconventional CEO to shout about, the earnings call leaned naturally towards the much-anticipated tie up between T-Mobile US and Sprint. While the deal is working its way through the regulatory approval process in typically slug-like fashion, there are whispers in corners of the industry it may well be blocked by the watchdogs.

Fortunately for T-Mobile US, aside from scale and more efficient operational processes, it doesn’t seem to need Sprint that much. Yes, the boost to subscription numbers, the existing footprint and certain spectrum assets would be welcomed, but T-Mobile US is a company which is continuing to gather momentum on its own. The team boasted of an aggressive deployment of 600 MHz across the quarter, augmenting existing low-band capabilities on 700 MHz, while also being awarded the fastest LTE network according to Ookla, and winning 5 of 7 categories in most recent OpenSignal study.

One area of concern might be ARPU. Competitors have started to show better numbers when it comes to service revenues through increasing ARPU, while T-Mobile US improvements have come as a result of acquiring customers. At some point it will start to become prohibitively expensive to acquire new customers in the fashion investors are becoming comfortable with. Executives might start looking back at the declining ARPU, it dropped 1.2% to $46.52, as a missed opportunity. The declines being witnessed are not massive, but incrementally they will start to add up.

Period ARPU
Q2 2018 $46.52
Q1 2018 $46.66
Q4 2017 $46.38
Q3 2017 $46.93
Q2 2017 $47.01
Q1 2017 $47.53
Q4 2016 $48.37
Q3 2016 $48.15

Of course, in relation to competitors increasing ARPU numbers, Legere was as combative as you would expect:

“And let me just add a couple of things, when you really deep dive some of these ARPU changes and trajectory with the competitors, you’ve got to remember that they’re doing it by screwing the customer. Administrative fees are a huge part of what’s happening there and you’re taking that out of the pockets of existing customers.”

Irrelevant as to whether you like the colourful attitude of the CEO, or find the purposely-obnoxious presentation irritating, you can’t argue with results. T-Mobile US is continuing to gather steam and be a pain to competitors.