T-Mobile had a record-breaking fourth quarter
T-Mobile released preliminary fourth-quarter figures showing that the nation's second-largest wireless carrier expects to record a record 6.4 million net customer additions to its postpaid customer list. Not only would that be the best results for that category in the industry, it would also be a record high. And even better than that for T-Mobile investors, it would be above the high-end of the guidance that T-Mobile provided.
The fourth quarter will also result in the net addition of 1.4 million postpaid accounts says the company. Again, not only is this the best result for this category in the industry, it is a record high. How many of you remember the days when T-Mobile was the fourth largest of the major U.S. wireless firms, and the last of the majors to offer 3G? Along came industry executive John Legere who turned T-Mobile into what it is today; the fast-growing most innovative of the major U.S. wireless providers.
Mike Sievert has done a great job following former CEO John Legere
Sure, Legere left after he set the stage for T-Mobile to become the early King of 5G in the U.S. But his former right-hand man, Mike Sievert, has done a masterful job. And while his reign as CEO has been more, shall we say, low-key than Legere's, he has continued to keep the carrier on the same course. As for Legere, who knows? He may end up running Twitter if Elon Musk knows what is good for him.
T-Mobile continues to grow and grab market share
Continuing with the fourth quarter preliminary numbers, the gold standard for wireless firms is postpaid phone net customer additions. Postpaid accounts are those that pay for the month following the period of service. Prepaid accounts pay before the start of each month. Postpaid accounts are more expensive and make up the vast majority of accounts. And phone accounts are the bread and butter of most wireless firms.
T-Mobile's fourth-quarter postpaid phone accounts are expected to show net customer additions of 3.1 million, the best in the industry and the highest since T-Mobile closed on its $26 billion merger with Sprint. And the postpaid churn rate, at .88%, is the lowest in T-Mobile's history and makes the company the only one in the industry to show year-over-year improvement in the fourth quarter.
You might not know what churn means. No, it has nothing to do with producing butter or cream-at least not in this context. The churn rate is the percentage of customers that leave the company to sign up with another firm over a set time period. Which in this case is the percentage of customers T-Mobile lost over the fourth quarter.
T-Mobile continues to grow and grab market share
Speaking of CEO Sievert, the executive had this to say about the fourth quarter, "2022 was definitely the year of the Un-carrier as T-Mobile just posted amazing results -- our highest ever postpaid account net adds (the best measure of our industry-leading growth in customer relationships), both postpaid customer net adds and broadband customer growth that is expected to lead the industry, and our lowest-ever churn numbers."
Sievert went on to add that "It's clear that T-Mobile's ability to offer both the best network and value is bringing new customers to the Un-carrier and enticing those who join us to stay. And our momentum won't stop as we continue to translate our long-established 5G lead into overall network leadership and execute on our unique growth strategy. We are perfectly positioned to profitably take further market share in 2023 and beyond!"
So what did Wall Street think about this report? During the regular trading session, T-Mobile (TMUS) rose 92 cents or .66% to $139.96. After hours, the stock rose $2.04 or 1.46% to $142. That is closer to the 52-week high of $154.38 than the 52-week low of $101.51.
We should point out that the preliminary fourth-quarter results are subject to being changed "pending completion of year-end closing review procedures."
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