T-Mobile US Results Raise Questions on Metrics
T-Mobile was the first major carrier in the US to report results for the second quarter of 2017. This is a particularly interesting time as it is the first full quarter when all carriers have been advertising unlimited LTE plans. AT&T, Sprint and Verizon have all been pushing their bottomless plans, and the competing factors have become service pricing and connectivity speeds.
For the quarter, T-Mobile said it gained 1.3 million new lines including 786,000 post-paid phone subscribers. That’s an impressive figure given the maturity of the market.
The carrier’s run of success has been very respectable and its metrics beat expectations. Not only is T-Mobile gaining subscribers, but it’s also doing so profitably: it posted operating profit of $1.4 billion for the quarter, on top of revenue of $10.2 billion. These are record numbers.
However, as an article published by FierceWireless points out, these days, reported growth in subscriber numbers doesn’t necessarily mean new users, but could actually reflect new identities.
Back in December 2016, we wrote about T-Mobile’s new Digits service, which allows subscribers to use a phone number on several devices and then to effectively stuff several phone numbers into one device (see Numbers Game). In the wireless telecom environment, this a fresh approach, but for anyone accustomed to using modern Internet-era services such as Facebook and Skype, the subscriber’s identity isn’t hard-coded into a piece of hardware. Instead, it’s all a matter of software and services.
T-Mobile’s gain of 786,000 post-paid phone customers includes some of the Digits accounts — the referring article estimates 200,000 — meaning that not all the reported additions are new users or new smartphone activations, but rather an additional identity added to existing devices.
However, average revenue per user was essentially flat year-on-year at $47, despite the impact from its Digits service, which the carrier admitted had diluted it.
AT&T offers an identity service similar to T-Mobile’s Digits called NumberSync, which allows a phone number to be shared across other devices such as tablets and wearables. Phones no longer have to be phones.
These days, counting net additions is no longer so straightforward and carriers will need to be clear if they wish to convey clarity in their reporting. Digits and NumberSync are services that tug the phone number into the Internet era, but are causing some ambiguity. Legacy key performance indicators look like they’ll be needing a refresh.
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