T-Mobile USA is German giant Deutsche Telekom's biggest business outside Europe. From 2013, the company positioned itself as "the Un-carrier", a challenger brand among US mobile providers: "Un-satisfied with the status quo. Un-afraid to innovate." In honour of that branding it launched a series of aggressive marketing propositions, including easier upgrades, no charges for international data roaming, free iPhone trials, free music streaming and so on. That, combined with acquisitions of first MetroPCS and then Sprint in 2020, elevated it from challenger brand to one of the Big Three national carriers. The business was originally formed from Deutsche Telekom's acquisition of US provider VoiceStream in 2001, and then steadily expanded through a series of further purchases. By the early 2010s, though, it still lagged far behind local giants AT&T and Verizon. An attempt to sell out entirely to AT&T was blocked by regulators in 2011. A new potential escape route was forged in 2012 with an arrangement to merge T-Mobile into publicly quoted MetroPCS. Under unconventional and hard-charging new CEO John Legere, the resulting business underwent an extraordinary rebirth over the next few years. T-Mobile USA steadily added on new customers, often at the expense of main rival Sprint, eventually supplanting the latter as the #3 US wireless provider, though still some way behind the two leaders. Several times over the next few years, T-Mobile engaged in talks to merge with the ever-weaker Sprint. Finally, in 2018 an outline deal was reached whereby T-Mobile would acquire Sprint for around $26bn in stock. However, the would-be partners were forced to battle with regulators for almost two years to secure approval. A green light was finally issued by the FCC in summer 2019 after T-Mobile and Sprint agreed to spin off key assets to a new would-be wireless provider, Dish Network. However, regional hurdles remained. The deal was finally cleared in Feb 2020 and completed three months later. By the end of 2020, the merged entity managed 102.1m customers, overtaking AT&T as the #2 mobile brand. The vast majority are served by the main brand; MetroPCS - now Metro by T-Mobile - still operates as a secondary prepaid brand. CEO Legere departed the group in early 2020, and was succeeded by deputy Mike Sievert. Revenues for 2020 were $68.4bn with net income of $3.1bn.
Capsule checked 9th December 2019
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Recent stories from Adbrands Update:
Adbrands Daily Update 28th Oct 2020: T-Mobile USA is the latest entrant into streaming media with the launch of TVision, available in three different price-tiers according to the range of channels required. The service has been in gestation for two years, ever since T-Mobile acquired live TV streamer Layer3 in 2018. The new offering is designed to become the cornerstone of an expanded home internet service to rival traditional cable providers.
Adbrands Daily Update 2nd Apr 2020: The merger of T-Mobile USA and Sprint closed yesterday nearly two years after it was agreed, and a decade since the two companies first started negotiations. At the same time, ownership of the Boost mobile service and its 9m customers transferred to Dish Network, along with selected infrastructure assets, and John Legere has stepped down as CEO of T-Mobile USA in favour of his former deputy Mike Sievert. Deutsche Telekom ends up with a 43% stake in the business, while Sprint owner Softbank has 24%. The remaining shares are publicly owned. The Sprint network will continue to operate for the time being under its new owner, but will be gradually phased out.
Adbrands Daily Update 11th Feb 2020: Finally, a green light. Two years after they agreed an outline deal, T-Mobile USA and Sprint got court approval to merge. District Judge Victor Marrero threw out the remaining objections submitted by a group of US states who argued that the merger would be anti-competitive, despite the fact it had already been passed by the Justice Department and the FTC. A few other obstacles remain, but it looks at last as if this combination of the current #3 and #4 US wireless carriers will actually take place.
Adbrands Daily Update 18th Nov 2019: John Legere, the high-profile and outspoken CEO of T-Mobile USA, announced plans to depart the company in April next year, despite its forthcoming merger with rival carrier Sprint. His loss will be a blow to the enlarged business, but he will be succeeded by longtime lieutenant Mike Sievert. "I hired Mike in 2012 and I have great confidence in him," said Legere. "I have mentored him as he took on increasingly broad responsibilities, and he is absolutely the right choice as T-Mobile's next CEO. Mike is well prepared to lead T-Mobile into the future. He has a deep understanding of where T-Mobile has been and where it needs to go to remain the most innovative company in the industry." There had been rumours that Legere was in talks to take over as CEO of office sharing company WeWork; however Legere reportedly ended those discussions because of a potential conflict of interest: Japanese group Softbank is the controlling shareholder in both Sprint and WeWork.
Adbrands Daily Update 29th Oct 2019: Talks with local regulators in different states to resolve opposition to its merger with Sprint drag on, but in all other respects T-Mobile USA is thriving. In 3Q it added more postpaid wireless subscribers than both its two biggest rivals combined. Postpaid are generally considered to be mobile companies' most valuable customers. Net adds were 754,000 subscribers, compared to 444,000 at Verizon and a lacklustre 101,000 at AT&T. Total customers at T-Mobile at the end of Sept were 84.2m, though prepaid still represented a significant proportion. Total postpaids were 45.7m. AT&T had 162.3m, including 75.2m postpaids. However its results were overshadowed by a worrying decline in pay-TV and broadband customers. Verizon had 93.8m mobile customers, and remains the postpaid champion with 89.1m contract subscribers. Sprint has yet to report 3Q figures, but at the end of 2Q had 54.6m total customers of whom 32.2m were postpaid. If the T-Mobile/Sprint goes through without further significant losses in postpaid customers, the combined total of around 77.9m monthly subscribers would put that business ahead of AT&T.
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