The Competition For The No. 3 US Carrier Heats Up As T-Mobile US Inc (TMUS) Challenges Sprint Corp (S)
T-Mobile US Inc (NYSE:TMUS) is keen to overcome Sprint Corp (NYSE:S) to become the U.S.’s No. 3 largest carrier by subscriber. The conviction at T-Mobile is that the company is poised to dethrone its immediate rival, and CEO, John Legere, has never shied from claiming that publicly.
The views of Legere, about T-Mobile US Inc (NYSE:TMUS) going beyond Sprint, are also shared by a number of analysts. There is a feeling that T-Mobile added more subscribers in the first quarter than Sprint, although the actual results on that front are currently unavailable.
Even though most analysts tracking the wireless market strongly believe that Sprint is on the verge of losing its No. 3 position to T-Mobile, there is no consensus about when exactly that will happen. While some hold that T-Mobile may have already jumped ahead of Sprint, given its strong 1st quarter performance, others believe that T-Mobile will not be able to top Sprint until the end of next month.
Estimated subscriber growth
It is estimated that T-Mobile US Inc (NYSE:TMUS) may have added 2.15 million subscribers in the first quarter, which, if true, would mean that the balance is currently tilted in favor of T-Mobile. In the same quarter, Sprint is estimated to have added just about 397,000 subscribers, which, if true, would also mean that it is set to forfeit the third position.
Closing the gap
Just before the start of the first quarter, T-Mobile US Inc (NYSE:TMUS) had 55.019 million customers, compared to 55.929 million of Sprint, according to the official counts. Given that standing, T-Mobile needed to add 910,000 net subscribers more than Sprint, in the same quarter, to almost floor the rival. However, some analysts say achieving 910,000 additional net subscribers is a huge assignment for T-Mobile.
The race comes down to revenue and profits
Whether T-Mobile US Inc (NYSE:TMUS) jumps over Sprint to No. 3 in the U.S. wireless carrier pecking order may be immaterial to investors who are looking for tangible results. The race among the major carriers is about generating more revenue and profits quarter after quarter. While price wars continue, all the carriers are working hard to bolster their network quality, reliability and accessibility. Building networks will ensure that they are able to retain the customers they win.
Both T-Mobile US Inc (NYSE:TMUS) and Sprint have the challenge of matching network quality of their larger rivals Verizon Communications Inc. (NYSE:VZ) and AT&T Inc. (NYSE:T).
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