T-Mobile has big hopes to become the top US wireless carrier. At one time, this carrier existed on scraps. It survived on what is could get by reducing prices and offering no-contract services. Its coverage outside of major cities wasn’t worth having. Now it is aiming to become America’s top wireless carrier.
T-mobile received a $3 billion severance fee after the failure of its 2011 merger with AT&T. It used that money for shopping: it bought up wireless airwaves in several western states. Now it is the #3 US wireless carrier and looking for more: hoping to leapfrog AT&T and Verizon to the #1 spot for nationwide coverage.
That said, it is doubtful if T-Mobile could beat these two for subscriber numbers. People tend to stay with the same carrier unless there are compelling reasons to move. A significant reduction in prices or charges could be one reason, though people may be suspicious of consistency of service if charges are too low. Both competitors have around twice the number of users as T-Mobile has at the moment.
Nevertheless, T-Mobile’s monthly subscribers have grown during the past four straight years, while the first quarter of this year saw AT&T and Verizon lose monthly payers. According to Barclay’s, T-Mobile now has an 18% share of retail subscribers in the first quarter, compared to just 10% in the first quarter of 2012.
There has been talk about a T-Mobile merger with Sprint Corp., a competing carrier at #4 in the listing, just below T-Mobile. It was rumored that Sprint’s majority shareholder, the SoftBank Group Corp of Japan, would consider giving up its control over sprint to do a deal with T-Mobile. There might also be some interest from cable companies.
Furthermore, it was rumored that Charter Communications might get together with some others to buy over the wireless firm. Consequently, T-Mobile’s stock price rocketed – up 60% from this time last year. Not only that, but the company’s first-quarter profits are up 46% from the same time last year to $698 million. Another year might see it hit the billion.
Verizon has been declared the top US wireless carrier network in terms of scope of cover and of reliability in getting a signal. While T-Mobile still appears to have some work to do in these areas, there seem few doubts that the company is heading in the right direction. It spent $8 billion in April in the largest auction of US wireless airwaves run by the US government. The company states that its purchases will give it increased presence in the west, including Texas, Arizona, Wyoming and Montana.
While there are still talks of a hook-up with Sprint, the company is keeping its options open. Its new 5G network may strengthen its hand. We shall see, but meantime T-Mobile is on the up and quite capable of going it alone. T-Mobile top US wireless carrier? Yes, possibly in the not too distant future. Let’s just say that T-Mobile has big hopes, big designs, and big plans for the future.
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