T-Mobile is already at the half way point with respect to the top competition in its space. The third largest wireless carrier in the United States has a little more than 70 million subscribers, compared to the above 130 million subscribers for Verizon and AT&T, and it is growing fast, steadily increasing its market share in a market that is not really growing fast.
The US Wireless market is growing, but albeit at a slow rate. Here are the key findings from Strategy Analytics’ US Wireless Market Outlook 2015-2020
- While growth has slowed, nearly 100 million wireless connections (including consumer electronics connections but excluding M2M) will be added through 2020, reaching a 128% penetration rate (of the US population).
- Mobile service revenue will grow 0.2% to reach US$197 billion in 2020, up slightly from $195 billion in 2015, spurred by a 5.7% growth in prepaid service revenue and 3.3% growth in data revenues.
- Verizon Wireless and AT&T are diversifying their revenue streams but will remain strong leaders, even as challengers T-Mobile USA and Sprint gain ground.
- No major shifts are anticipated in market share among the top 4 carriers, as T-Mobile has already surpassed Sprint in terms of total subscribers by mid-2015. The wholesale/MVNO/reseller market will gain a slightly higher percent of net adds over the next couple years.
But T-Mobile is not just increasing market share in a slow moving market, it is gobbling it up. It took them just four years to double their customer base from 33.39 million in 2012 to 71.45 million by 2016, moving from fourth position in the market to third position, and in the process changing the topic from “Sprint will buy T-Mobile” to “T-Mobile and Sprint will merge” to “T-Mobile will go it alone.”
T-Mobile’s customer base expansion has shown no signs of fatigue so far. Postpaid revenues grew 7% in the first nine months of the current fiscal as postpaid customer base expanded in double digits. The pace of customer additions has come down a bit this year compared to what they were able to do last year, but if you ask the top two carriers, they will tell you what a big deal signing up 3.8 million additional customers is, especially over a nine month period.
T-Mobile is still increasing its numbers by the millions every year, and every additional million gets them closer and closer to Verizon and AT&T. It has been five long years since T-Mobile started adding customers in boat loads. The last time they reported near-flat customer base growth was in 2012.
Since then there has been no looking back, and their stellar growth has continued till now. Looking at the momentum behind the customer net adds, it’s very easy to say that T-Mobile is many quarters away from running out of breadth. Maybe they will continue till the media’s tune changes to “T-Mobile will buy Sprint”.
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