T-Mobile US triples profit, adds two million customers

Continues run of good results, but share price barely budges

T-Mobile US has continued to tap into widespread frustration with competing mobile phone carriers by adding 2.1 million customers in the last quarter of 2015 and tripling its profits.

The Q4 results show the company's net income jumped to $297m from $101m one year previously. It also pulled in an additional 2.1 million customers in the quarter, bringing its total customer base to 63 million.

The results continue the company's run of good results: it has added over a million customers every quarter for the past ten quarters, and for the past three quarters added two million customers.

T-Mobile US has aggressively chased customers from rival companies by removing the aspects of their current contracts that most frustrate them.

It does not tie customers into contracts, as opposed to the standard two-year contracts that market leaders AT&T and Verizon insist on. And T-Mobile US has even offered to pay the exorbitant fees that those companies charge to let people out of their contracts.

T-Mobile US offers a more flexible text message and data approach that can save customers hundreds of dollars a year with the same usage. It has allowed customers to roll over unused data to the next month. And recently it has offered two services – one for music and one for video – that allow customers to access streaming services without them impacting data usage.

The great man himself

CEO John Legere was also keen to point out that the company is retaining those pulled-over customers. "We aren't just winning customers, we're keeping them too," he said on the earnings call. He also highlighted that most of the customers are coming from market leader AT&T.

On the downside, T-Mobile US's new video service – BingeOn – has become controversial due to its likely breaking of net neutrality rules; something that sparked a series of poorly judged responses from Legere that slightly tarnished his loveable maverick reputation.

That aside, T-Mobile US's message of putting customers first, as opposed to trying to extract maximum profit from each and every one, continues to resonate. The image of a fast and fun company that Legere has been pushing was even extended to a T-Mobile-created drinking game for its own results.

"Take a drink every time: anyone references 'listening to customers' (you know because we say it A LOT); John Legere drops a four letter expletive," reads part of guide. "Finish your drink if: there's a suit or tie sighting."

Success aside, Wall Street is still tying T-Mobile US share price to the company's total revenue, rather than its growth success. Total revenue for the quarter went up 1.1 per cent to $8.25bn (expected $8.20bn). In response, the share price went up ... 1.1 per cent. ®