T-Mobile Q4 Preview: Will The T-Mobile One Plan Deliver?

T-Mobile ( TMUS ), the third largest U.S. wireless carrier, is expected to publish its Q4 2016 earnings on Tuesday, February 14. The company has already provided its preliminary operating figures for the quarter, indicating that it had added 933k branded postpaid phone net customers during the quarter, marking a slight improvement over the last year, with churn figures also trending of 18 basis points lower to 1.28%.

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T-Mobile One In Focus

T-Mobile's strong postpaid net additions for the quarter were likely driven by multiple factors including prepaid to postpaid migrations, improved supply of Apple's iPhone 7 and promotions that offered the handset for free under trade-ins. That said, a key trend that we will be watching is the performance of the T-Mobile One plan that the carrier launched in September, replacing its tiered data plans which will now only be available via select channels. T-Mobile indicated that the initial uptake (as of October) for the plan was strong, accounting for about 80% of sales to new customers, and the figure likely improved during Q4, with existing customers also potentially migrating to the plan. This should be a positive for T-Mobile's ARPU, as the plans are priced slightly higher compared to its entry level tiered offerings (6 GB of data for four lines cost about $120 per month on tiered plans, while the One plan is priced at $160 for four unlimited lines). That said, T-Mobile has taken some steps to reduce pricing on the One plan over the last few weeks, introducing all-in pricing that includes all taxes and fees into the advertised price. (related: Why T-Mobile's All-In Pricing Strategy Could Pay Off )

T-Mobile Preliminary Q4 2016 Subscriber Metrics

  • 2.1 million total net customer adds
  • 1.2 million branded postpaid net customer adds
  • 933k branded postpaid phone net customer adds
  • 541k branded prepaid net customer adds
  • Branded postpaid phone churn of 1.28%, down 18 bps year-over-year

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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