Ina Fried

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Amid Strategy Shift, T-Mobile Adds 1.1 Million Customers in Second Quarter

T-Mobile US said late Wednesday that it posted its strongest customer growth in four years, adding 1.1 million customers during the second quarter, including 678,000 for its primary T-Mobile and MetroPCS brands.


The company said it now expects to gain between one million and 1.2 million branded customers this year, reversing several years of customer losses. (Clarification: Branded customers includes T-Mobile and MetroPCS customers but not the company’s wholesale business or those for virtual network operators that use T-Mobile’s network.)

“T-Mobile’s Un-carrier approach has clearly resonated with consumers,” CEO John Legere said in a statement. “By fixing the things that drive them mad, like contracts and upgrades, and freeing them from the two-year sentences imposed on them by our competitors, they are choosing the new T-Mobile in unprecedented numbers.”

T-Mobile said it sold 4.3 million smartphones, representing 86 percent of phones, up from 71 percent a year ago.

It has been a time of great change for T-Mobile, which moved in March to do away with phone subsidies and long-term contracts, and completed its MetroPCS acquisition in May.

The company said it expects to end the year with between 60 percent and 70 percent of T-Mobile postpaid customers on one of the new-style unsubsidized phone plans. About half of such customers are on one of those plans now, up from 36 percent at the end of March.

T-Mobile also plans to increase its spending on marketing and attracting new customers, majority owner Deutsche Telekom said in a press release announcing its own quarterly results.

“We are in the middle of a massive turnaround in the United States and we want to carry on along this successful course,” Deutsche Telekom Chairman René Obermann said in a statement. “We are prepared to spend more on high-value growth this year than previously planned.”

In recent days, T-Mobile US has expanded MetroPCS into new markets using the T-Mobile network, and launched a promotion where all its phones are available for no upfront cost.

Also in July, the company announced its Jump program, which lets customers who pay $10 per month upgrade their phone as often as twice per year.

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— Om Malik on Bloomberg TV, talking about Yahoo, the September issue of Vogue Magazine, and our overdependence on Google