T-Mobile grew its customer base over the holiday period, finishing the year with another strong quarter that saw it bring in 927,000 postpaid phone additions over the quarter, the metric used by the industry as an indicator of success.
This capped off a year of growth for phones that resulted in 3.1 million more that signed up for monthly plans over 2022. All told, it had 6.4 million net additions over 2022, half of which had signed up for phone plans.
“We’re winning the highest share of switching decisions in the industry,” T-Mobile CEO Mike Sievert said on the earnings call. He did not say if the carrier would be changing its promotional strategy, standing in contrast with AT&T and Verizon’s recent claims to both wind down their aggressive phone deals which had been used to lure customers.
Sievert addressed the recent cybersecurity breach that affected 37 million T-Mobile customers, regretting that any information was exposed but noting that the carrier’s systems prevented the “most sensitive kinds” of data from being accessed. The hack was the fifth breach in five yearsprompting concern over the carrier’s security.
T-Mobile continued slowly growing its 5G network and announced that it is now covering 265 million people with its faster midband and millimeter-wave “Ultra Capacity” 5G flavors that offer significantly improved speeds and capacity compared to 4G LTE and its low-band 5G network (what T-Mobile calls “Extended Range 5G”). That marks an increase of 15 million over the last quarter, with the carrier planning to expand this faster network to 300 million people by the end of 2023.
Sievert said that of its 150 MHz of spectrum, 130 MHz is dedicated to midband 5G, which it aims to grow to 200 MHz by the end of 2023.
T-Mobile reported a more modest 25,000 prepaid net additions due to customers switching providers, although the carrier noted that it was the only one with positive gains — Verizon lost 175,000 and AT&T lost 13,000 prepaid customers over the holiday period. Sievert took this as a healthy sign for the industry as customers continued to shift from prepaid to postpaid contracts.
T-Mobile’s internet customer base grew with 524,000 net additions in the quarter, slightly lower than the 578,000 added last quarter as the carrier adjusts to increased deactivations from a customer base that grew to 2.6 million by the end of the year. Most of these are using T-Mobile’s fixed wireless running on its mobile 5G network, which Sievert admitted in the call has less overall bandwidth capacity than wired fiber internet but is cheaper and available to tens of millions of households without needing to go through the trouble of laying cable, making it attractive to customers.
“Most of our [fixed wireless] customers are coming directly from cable, not just from rural areas or unconnected places or DSL,” Sievert said.
T-Mobile reported $15.5 billion in service revenue, a growth of 4% year over year, which resulted in a diluted earnings per share of $1.18, an increase of 71% from the same period in 2021. That was above the $1.10 earnings per share expected by analysts polled by Yahoo Finance.
T-Mobile shares slightly rose 0.5% in early morning trading.
T-Mobile said they were on track to meet expectations for 2023, which includes finalizing its integration with Sprint’s network by the end of the year. The carrier had “substantially completed” decommissioning of Sprint’s network in the third quarter of 2022. T-Mobile expects postpaid net customer additions of between 5 and 5.5 million, half of which will be on phones.
T-Mobile capped off its quarterly report by committing to a sustainability goal of zero emissions across its entire carbon footprint by 2040, although the carrier did not offer any specifics on how it would meet that goal.