T-Mobile US Inc., currently the fourth-largest wireless carrier in the U.S., revealed in a filing today that it managed to add 1.3 million branded postpaid customers during the fourth fiscal quarter. This exceeded the companys own forecast for subscriber growth almost twice. The rapid customer growth comes at turbulent times of price cuts and new promotions.
The Chief Executive Officer of the company, John Legere, said in a statement, cited by the Wall Street Journal: “We continued to take share from our competitors.”
According to the filing, 1.3 million postpaid monthly subscribers were added over the fourth three months of the fiscal year. A total of 2.1 million net customers were added in the quarter ended December. The result was a total of 4.9 million new subscribers for the entire 2014.
The last projection of T-Mobile in October pointed to a growth within the range from 4.3 to 4.7 million net new customers annually. In 2013 2 million new subscribers were added in 2013.
The new subscribers were lured by T-Mobiles aggressive pricing policy and promotions, which probably contributed to its profit margins. The company also abandoned the several-year contracts, which were not well-accepted by customers.
Jennifer Fritzsche, an analyst at Wells Fargo, commented on the U.S.-based mobile phone networks announcement for the Financial Times: “This announcement continues T-Mobile’s impressive momentum in subscriber growth, particularly with handsets, which comprised 80 per cent of postpaid net adds for the year. The question remains how this subscriber growth translates to profitability and margins.”
The customer gains come at a time of stiff competition between the key carriers in the country. Mobile carriers in the U.S. have been recently focused on providing subscribers with cheaper shared plans and more monthly data. The three largest carriers Sprint Corp., Verizon Communications Inc. and AT&T Inc. offered various promotions in order to attract more clients.
T-Mobile US Inc. was up 5.14% to close at $28.25 per share yesterday, marking a one-year drop of 14.96%. The company is valued at $22.81 billion. According to CNN Money, the 23 analysts offering 12-month price forecasts for T-Mobile US Inc. have a median target of $35.00, with a high estimate of $50.00 and a low estimate of $25.00. The median estimate represents a +23.89% increase from the last price of $28.25.
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