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July 29, 2021
T-Mobile reported strong numbers in its second quarter earnings and joined rivals AT&T and Verizon in business wireless growth.
T-Mobile reported 1.3 million Q2 postpaid net additions, a number it says leads the industry. For comparison, AT&T reported about 1.16 million postpaid net additions in Q2. T-Mobile company reported 1.2 million in Q1 and 1.1 million in Q4 2020.
T-Mobile reported Q2 revenues of $19.95 billion with service revenues totaling $14.5 billion. Moreover, T-Mobile raised its guidance for the next quarter.
“Stellar postpaid customer gains and industry-leading service revenue growth translated into industry-best growth in profitability and cash flow, and drove another beat and raise quarter – all fueled by unprecedented synergies that only T-Mobile can deliver,” T-Mobile CEO Mike Sievert said.
T-Mobile’s Mike Sievert
In addition, the company reports that its 5G network now covers 305 million people and 1.7 million miles. Moreover, T-Mobile reported that its network now carries about 80% of Sprint customer traffic and one-third of Sprint customers.
Sievert told analysts and investors that T-Mobile is strategizing how it should proceed with the migration. He said the migration includes multiple “discrete events”: moving the substantial portion of network traffic, migrating the core network, migrating rate plan, migrating the biller and lastly migrating the brand. Sievert said T-Mobile has begun to shut down the “source” (Sprint) network to the “destination” side (T-Mobile).
“We’re pleased with our progress. We’re ahead of schedule, but this next year is a really critical time,” Sievert said.
T-Mobile didn’t include numbers from its business unit but nevertheless reported “increased growth.” Sievert said he’s “delighted” with T-Mobile for Business’ results and declared that T-Mobile’s business net additions surpassed that of Verizon.
T-Mobile’s Mike Katz
Mike Katz, executive vice president of T-Mobile for Business, said the company has set its sights on the postpaid core connection opportunity.
“If you look at all the opportunities in enterprise, core connectivity is still the biggest opportunity, both from numbers/subscribers but also for revenue, so we’ve been really focused on taking share there,” Katz said.
Metrigy’s Irwin Lazar
Irwin Lazar, president and principal analyst for Metrigy, said T-Mobile took a unique approach to distributed workforces during COVID-19. The carrier’s WFX portfolio includes an unlimited data plan, home office internet using a 4G/5G broadband connection, and a collaboration offering that utilizes Dialpad.
“T-Mobile seems to be the one company that’s attacked that remote work market,” Lazar said.
Omdia’s Daryl Schoolar made a similar comment earlier this year, praising WFX for its scalability and marketability.
“T-Mobile smartly recognizes that the pandemic will leave a lasting impact on how people work. 5G was designed to help operators better address enterprise needs,” Schoolar said.
T-Mobiles chief wireless competitors, Verizon and AT&T announced their earnings last week. Verizon and AT&T both saw growth in their business wireless businesses. Verizon’s business wireless service revenues increased 8.0% year-over-year to $3.1 billion, although that growth predominantly came from SMB customers (11.3% year-over-year revenue increase) while global enterprises dropped slightly. AT&T’s business mobility unity reported a net gain of 5.5 million wireless subscribers in the second quarter.
Verizon’s total business revenue increased 3.7% year-over-year to $7.8 billion, a number close to where it was in Q2 2019.
The wireline numbers did not paint as strong a growth picture. Verizon Business broadband connections dropped from 491,000 in Q2 2020 to 480,000 Q2 2021. In the meantime, consumer broadband connections increased. AT&T’s business wireline revenue dropped 4.0% year-over-year to $6.1 billion in Q2 2021 while – you guessed it – consumer wireline revenue increased.
Sievert gave his reaction to…… Dish Network’s decision to move off its mobile virtual network operator (MVNO) business off T-Mobile’s network and onto AT&T’s. In return, T-Mobile this week unveiled a prepaid promotion designed to draw customers away from the Boost Mobile business that Dish bought from Sprint.
Sievert said T-Mobile will honor all of its obligations to Dish that remain. However, he said Dish’s exit presents opportunity for T-Mobile to double down on its strengths.
“When they move off of our network, that’s going to open up both management attention, but more importantly, capacity. And so many things in our plan are predicated on available capacity,” Sievert told analysts during an earnings call. “For example, home broadband where we don’t think we’re going to be so much paced by the demand. We’re going to be paced by the available network capacity, so there’s an opportunity to go faster.”
Matthew Toth, president of C3 Technology Advisors, pointed to the Internet of Things as a big factor driving wireless growth.
C3 Technology’s Matthew Toth
“Cell phone penetration in the US is pretty much maxed, but IoT is gong to drive wireless revenue up for years to come as everything from Redbox vendor machines to water sprinkler systems need constant connectivity,” Toth told Channel Futures.
Read more about:Agents
Senior News Editor, Channel Futures
James Anderson is a news editor for Channel Futures. He interned with Informa while working toward his degree in journalism from Arizona State University, then joined the company after graduating. He writes about SD-WAN, telecom and cablecos, technology services distributors and carriers. He has served as a moderator for multiple panels at Channel Partners events.
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