By Michelle Choi of Lease Advisors
Verizon and AT&T have historically been the top two U.S. wireless carriers by far, with significantly larger subscriber bases and larger coverage areas than any other carrier. The two have steadily increased their subscriber bases to 130-140 million; nearly double that of other carriers. Their average monthly churn rates of about 1-1.5 is also nearly half that of the competition. Other carriers like T-Mobile, Sprint, US Cellular, and Ntelos have experienced higher Adjusted Revenue per User (ARPU) rates than Verizon and AT&T, but have typically followed behind the two largest carriers significantly.
This is changing. T-Mobile undertook a massive network upgrade and developed its 4G LTE services despite late entry into the new generation. Its acquisition of additional spectrum has allowed signals to travel greater distances and move more easily throughwalls and other barriers. This has made new cell site deployment and coverage expansion using existing cell sites more efficient. Customers have noticed the resulting decrease in dropped calls and indoor interference. This, along with T-Mobile’s network speed and reliability has placed the carrier with the ranks of Verizon and AT&T, and earned the company a Number 1 ranking by Consumer Reports.
This network expansion and development was accompanied by an increase in subscriber base. Last year, T-Mobile’s “Uncarrier” marketing campaign generated enough momentum to gain more mobile customers than Verizon, AT&T, and Sprint combined. Using marketing flair and pocketbook-friendly features under the no-contract plan like data rollover, free data roaming, and undercut pricing, the trend continued throughout the year. T-Mobile announced last month that its 4G LTE service was available to 300 million people across the country, and was on track to add 1 million new square miles of LTE coverage to its network. The provider reported adding 2.3 million customers in Q3 2015 and 843,000 postpaid customers, earning $138 million or $0.15 a share. They added 2.1 million customers—the 11th consecutive quarter with the addition of more than 1 million new customers—bringing the year’s total to 8.3 million customers added. CEO John Legere said that the company also added 8.3 million the year before and has no plans to stop disrupting the “status quo in wireless.”
Neville Ray, T-Mobile’s CTO, said, “We have more than doubled our footprint of LTE this past year… and we are actually expanding into new territory now with our LTE services, which means we’re putting LTE into and onto rural ground and turf in brand new markets.” This entrance into new areas means that customers who had previously been unable to consider T-Mobile as an alternative to Verizon and AT&T now have a competitive option.
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