T-Mobile Customers Use the Most LTE Data
T-Mobile's LTE customers are using an average of 2.7GB of data each month, compared to around 2GB at Verizon and 1.5GB at AT&T, according to the carrier's top executives.
Speaking on T-Mobile US Inc. 's third-quarter earnings call Tuesday, CTO Neville Ray told investors -- and those following along on Twitter Inc. -- that the average LTE usage of 2GB to 3GB is up from last year, and he expects it to increase more next year as T-Mobile builds out its spectrum assets like 700MHz.
"We’re seeing customers come onto the network in great numbers, and we're supporting a great experience for them," Ray said. "That's the plan. Unlike others, we want customers to use the service when they subscribe."
T-Mobile CEO John Legere further clarified that the average is specifically 2.7GB, compared to AT&T Inc. (NYSE: T)'s 1.5GB and Verizon Wireless 's 2GB, and it's even higher for T-Mobile's unlimited customers. It's also rising for all three, and Legere feels that his company's network is in a better position to support this growth than his competitors' networks are.
That's because T-Mobile built its new LTE network to handle customer growth of zero to 250 million over a relatively short period of time. As a result, Ray said T-Mobile has more spectrum available per customer than its competitors do, as measured in "MHz-POPs," or amount of spectrum multiplied by the population it covers. T-Mobile enjoys 1.5 to 1.6 MHz-POPs per customer supported, while AT&T and Verizon are at less than 1.
"Their [AT&T's and Verizon's] ability to support growth capabilities and numbers becomes more limited as growth comes on our industry," he said.
T-Mobile is on track to cover 260 million people with LTE before the end of this year, 280 million people by mid-2015 and 300 million by the end of 2015. Ray says the company already has its first sites on air in its 700MHz A-Block spectrum, acquired from Verizon earlier this year, and will continue to build out its 4G network in 700MHz and 1900MHz PCS spectrum -- primarily outside the urban core -- as well as its AWS spectrum. (See T-Mobile Pours Cold Water on Sprint's Spark and T-Mobile: Going Bananas for Low-Band .)
And the so-called "uncarrier" continues to deploy wideband LTE in select markets. It currently has the 15x15MHz LTE network live in 19 markets, and Ray says it will hit at least 26 by the end of this year. (See T-Mobile Talks Up LTE as Legere Apologizes for Outburst.)
"We have continued to innovate on the services side too, offering our customers more ways to communicate than anyone in this industry," Ray added on the earnings call, listing voice over WiFi, voice over LTE on the iPhone, its personal cell spots and its Gogo partnership for in-flight texting as examples. (See T-Mobile Turns Up VoLTE-to-WiFi Handoff.)
T-Mobile managed to add a record 1.4 million postpaid customers in the third quarter, boosting its 2014 subscriber growth forecast by more than 1 million, to 4.3-4.7 million. For comparison, AT&T added 785,000 postpaid customers, and Verizon just beat it at 1.5 million postpaid additions. Sprint Corp. (NYSE: S)'s report, coming next week, might provide the answer of where the other three carriers' impressive gains are coming from. (See AT&T Adds 500K Connected Cars in Q3 and Verizon: Multicast Is 'a Year Away'.)
As in previous quarters, however, T-Mobile's additions came at the expense of its financials. It reported revenues of $7.35 billion, up 9.9% year-on-year from $6.69 billion, but it lost $94 million, or 12 cents per share, in the third quarter, due in large part to its expensive integration of the MetroPCS network. (See T-Mobile Sacrifices Costs for Customers and T-Mobile Taps Ericsson for LTE Upgrades.)
Legere and Ray maintained that their main competition here isn't Sprint, but rather AT&T and Verizon. A big task for T-Mobile next quarter will be to reduce its churn metrics, which came in at 1.6%, compared to around 1% for AT&T and Verizon. Legere added that consumers tend to switch carriers when they switch devices, and the iPhone launch has already helped with its churn metrics. (See Apple Claims Record iPhone 6 Pre-Sales.)
"The porting ratios with us right now are great," Legere said, referring to the ratio of customers that left T-Mobile versus joined it. That ratio was 2.2 for T-Mobile, compared to 1.89 for Verizon and AT&T, and 2.6 for Sprint. Or, put another way -- as Legere did at Monday's night Re/Code conference -- "We absolutely kicked the shit out of the industry."
— Sarah Reedy, Senior Editor, Light Reading