Now that T-Mobile USA has completed its merger with MetroPCS, birthing the newly named T-Mobile US, where does the operator go from here?
RCR Wireless News spoke with Weston Henderek, principal analyst of consumer services at Current Analysis, to get his take on the future of T-Mobile US.
Sure, both brands are set to continue on in their current iterations, at least for the time being, but at some point decisions will have to be made. Does T-Mobile US continue to position itself as the underdog to the bigger players in Verizon Wireless, AT&T Mobility and Sprint Nextel? Or, does it shift its focus downward, taking on the value players in the space like Leap Wireless, Tracfone and various mobile virtual network operators.
More pressing, if Dish Network’s current attempts to acquire Sprint Nextel or Clearwire – or both – fails, does the newly more independent T-Mobile US become the next target for Charlie Ergen’s wireless ambitions?
Operationally pre-merger, T-Mobile USA managed to add 579,000 customers to its network during the first quarter of the year, which was more than triple its customer growth for the first quarter of 2012, and left the carrier with just under 34 million customers at the end of the latest quarter.
MetroPCS has lost 482,922 customers over the past year, ending the first quarter of 2013 with just under 9 million total subscribers. First quarter results did show a net gain of 108,668 subscribers, but that result was down 17% from the previous year.
Overall, the new combination is supporting approximately 43 million customers, about 12 million fewer than No. 3 operator Sprint Nextel, which some feel could see the most impact from the new T-Mobile US.
A positive for T-Mobile US is that it looks to have momentum in the no-contract space, both from past and ongoing offers from both sides of the business as well as T-Mobile US’ focus on its device financing model. Also, at least the T-Mobile side of the operations is now offering Apple’s iPhone products, which should help shore-up postpaid churn.
Investors appear to be on-board with the new entity with the company’s newly listed stock (TMUS) having gained around $1.40 per share since opening at $16.25 per share on May 1. Analysts have noted that some of that bump could be associated with views that the company will see some sort of merger offer from Dish Network in the near term.
Despite the current enthusiasm surrounding the “new” carrier, there are still hurdles to overcome. Henderek noted that the carrier will have to carefully manage the integration of MetroPCS’ customer base into the T-Mobile fold, noting that customers could see this as a time to shop around. T-Mobile US will also have its hands full with its continued network upgrade plans that have the carrier quickly re-splicing its spectrum holdings in order to support the rollout of LTE services. One needs to look no further than at Sprint Nextel to know how this process can turn disastrous.
MetroPCS has already said it planned to de-commission up to 10,000 cell sites as part of the merger. The carrier entered the relationship with 11,500 towers. T-Mobile USA for its part operates with approximately 51,000 towers, though it did sell off operational control of 7,200 sites that it owned to Crown Castle last year for $2.4 billion
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