Secret to T-Mobile US Inc (TMUS)’s Triple Profit

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T-Mobile US Inc (NASDAQ:TMUS) delivered profit for the fourth quarter that nearly tripled from the year-ago quarter period. That came on the back of 1.1% growth in the top line. Its results, both earnings, as well as, revenue topped the expectations. What is the secret behind it? The interesting point was that only in the previous quarter, its earnings fell way behind the analysts’ expectations. One of the main reasons for the positive surprise was its consistent efforts to wean away customers from the rival carriers.

Attractive Plans to Lure Customers

T-Mobile US Inc (NASDAQ:TMUS) was able to draw the attention of the customers, who have connections with AT&T Inc. (NYSE:T), Verizon Communications Inc. (NYSE:VZ), and Sprint Corp (NYSE:S) with its attractive plans. For instance, the third biggest telecom operator offered schemes like lower-priced phone leasing and data rollover in the recent past.

Aside from that, the telecom firm unveiled ‘Binge On’ in November last year. That enables its subscribers to stream video services from Netflix, Inc. (NASDAQ:NFLX) on their smartphones. The key factor was that the company would not count the video download against the customer’s data plans. This kind of special offers and plans enabled the company to add over two million subscribers in the fourth quarter, which was the third straight time.

Retaining the Existing Customers

Another key point was that T-Mobile US Inc (NASDAQ:TMUS) was able to retain its existing subscribers. Its CEO, John Legere, said during the conference call that the company was not only winning subscribers but was also retaining them, which was very important. It was because of that belief that he was able to expect to add 2.4 – 3.4 million subscribers in the postpaid category in the current year though it might be lower than the last year.

The last key was that everyone believed that T-Mobile US Inc (NASDAQ:TMUS) was weaning away customers from Sprint Corp (NYSE:S). However, in reality, most of the additions came from AT&T Inc. (NYSE:T). That also made Moffett Nathanson analyst, Craig Moffett, comment that subscriber growth continued to remain solid. Also, its ARPU of $48.05 exceeded the Street analysts’ expectations of $46.97 though it was lower than the previous year quarter.

Viraj Shah

Viraj Shah has completed M.Com (Finance) and is currently pursuing his CFP. He tracks US markets along with other global markets like India very closely. He is very passionate about stocks, real estate, and technology. He also believes that money can always be made in the market.

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