John Legere’s Uncarrier campaign may have landed T-Mobile plenty of customers over the last two years, but Uncarrier’s numerous consumer enticements haven’t exactly been friendly to the actual carrier’s bottom line. T-Mobile has posted quarterly losses far more often than it’s reported gains, but the fourth quarter was a welcome exception to the rule.
[company]T-Mobile U.S.[/company] reported a net Q4 profit of $101 million, which, coupled with its even more gainful second quarter, put T-Mobile in the black for the year with a total net income of $247 million. That may pale in comparison to the $12 billion in profits posted by Verizon in 2014, but it should help quiet some of the criticism that T-Mobile is gaining customers at the expense of profits.
T-Mobile added 2.1 million new connections to its networks in Q4, capping off 2014 with 8.3 million more customers than it had at the beginning of the year. T-Mobile now has 55 million connections total and is now nearly tied with the country’s third largest carrier, Sprint (which ended the year with 56 million subscribers).
In 2015 T-Mobile is projecting another big growth year, though not quite as big as 2014. In its forward-looking guidance, T-Mobile said it expects to add between 2.2 million and 3.2 million postpaid subscribers (customers who subscribe to its core Simple Choice plans) in 2015, compared to the 4.9 million postpaid customers it attracted in 2014.
T-Mo’s outspoken CEO also had a few choice words about the blockbuster spectrum auction that ended last month with a record $41.3 billion raised. Of the major carriers that participated, T-Mobile wound up winning the fewest new airwaves, paying $1.77 billion, compared to the $10 billion–plus paid by [company]AT&T[/company], [company]Verizon[/company] and [company]Dish Network[/company]. On T-Mobile’s Issues and Insights blog, Legere called the auction a disaster for American consumers because it placed even more spectrum in the hands of the country’s most dominant carriers, and he accused Dish of gaming the system.
Instead of winning licenses directly, Dish bid through shell companies in order to gain massive discounts ($3.3 billion, to be specific). It’s a pretty despicable practice, but it’s a practice that all of the major carriers have engaged in in one form another. That’s why you aren’t hearing much complaining from the other operators.
In fact, T-Mobile is going into the next auction — which will reallocate valuable low-band frequencies from the TV broadcast industry to the mobile carriers — with a very big advantage. In that auction, the Federal Communications Commission is setting aside blocks of airwaves in every major market for carriers that don’t own much low-band spectrum, meaning T-Mobile and Sprint will likely get new 600 MHz licenses at sizable discounts over AT&T and Verizon.