In a research note Friday, UBS Investment Research analyst John Hodulik writes that T-Mobile's subscriber success in the second quarter means "more upside" for T-Mobile's shares, but is a "bad omen" for investors looking for higher margins from the larger wireless operators. (See T-Mobile Adds 1.1M Subs.)
- T-Mobile has emerged as an aggressive share-taker far sooner than expected and porting ratios in July suggest the worst may not be over. The Un-carrier 3.0 launch, expected by Halloween, will be another shot across the bow, forcing the larger carriers to sacrifice margins and/or share. Layering on a resurgent Sprint in 2014 makes higher wireless margin estimates start to look like a stretch.
T-Mobile CEO John Legere boasted of having the next phase of the operator's revamped strategy all planned out at its JUMP launch event in July. (See T-Mobile: Might As Well JUMP.)
If phase one of the strategy was to drop contracts and get started on its LTE deployment, and phase two initiated a trade-in program and more widespread LTE, what could phase three mean?
I reached out to Hodulik on this, but drew a blank -- financial analysts don't usually like to talk outside of school.
On the technical side, I expect T-Mobile will likely be covering 200 million potential customers with LTE by Fright Night, and that the first features of LTE-Advanced would be supported by handsets in the U.S. by that time too.
I must admit that I'm a little stumped on what T-Mobile could do further to jazz up its pricing schemes. It seems to me that an even more aggressive trade-in scheme targeting AT&T users might make sense, but I'm really just spit-balling here.
What ideas, readers?
But the real question is -- what the hell will T-Mobile's ebullient and sweary CEO, John Legere, dress up as for Halloween?
As ever, you're welcome to guess away on that topic too.
— Dan Jones, Site Editor, Light Reading Mobile