'Un-carrier' T-Mobile reverses its losing streak
Posting profits of $101 million and continued customer growth, T-Mobile says its bet on low cost, consumer-friendly plans has paid off. But will those cheap plans come back to haunt the 'un-carrier'?
T-Mobile’s "Un-carrier" strategy seems to have paid off for the mobile provider.
In 2014, the nation’s fourth largest carrier saw a profit of $101 million, breaking its $20 million loss a year ago. T-Mobile’s revenue also jumped to $8.15 billion, an almost 20 percent increase, and held nearly 100 percent of industry growth in 2014 for plans in which the phone had already been paid in full.
For the seventh quarter in a row, T-Mobile added more than 1 million new customers to its service. The company credits this sustained growth to its Simple Choice plans and to features such as Data Stash, a program that allows customers to roll over your unused data, and Wi-Fi Un-leashed, which allows people to make calls via Wi-Fi. T-Mobile saw 2.1 million people added to its customer base in the fourth quarter alone.
“2014 was the best year of growth in company history,” says John Legere, president and chief executive officer of T-Mobile, in a statement to Yahoo! Finance. “Our Un-carrier moves helped us blow away the competition. The best is yet to come as the future looks bright in 2015.”
All the good news comes as a surprise to some industry watchers. Analysts who participated in a Thomson Reuters survey expected the company’s revenue to top out at $7.88 billion.
T-Mobile fell on RootMetrics' mobile network survey to fourth place, behind Sprint. Mr. Legere dismissed the survey, which ranks each network in terms of speed and consistency, as “outdated” data. The RootMetrics study was conducted during the second half of 2014.
But the biggest critique of the company has been the very formula that brought the carrier success in 2014. Critics say T-Mobile’s Un-carrier growth is unsustainable, and by T-Mobile’s own admission, the company will take a financial blow of $100 million to $150 million for the free 10 gigabytes of data it dishes out to new subscribers of Data Stash, though it is confident it will be able to earn back the loss.
T-Mobile says it will continue to push its Un-carrier plan and expects to add between 2.2 to 3.2 million customers by the end of 2015.