T-Mobile Takes PR Advantage of Early Q1 2013 Metrics

T-Mobile is probably the earliest to report Q1 2013 numbers, over a month ahead of the May 8, 2013 Deutsche Telekom formal release date. Only after 4 days since the first quarter closed, they reported some specific subscriber and churn data through their press release.

Here's a full look (2012 and Q1 2013) at the metrics on a table (click on the graphic for a bigger view). 

Why So Early?

T-Mobile needs to show that its strategy is succeeding. A key part of the 2013 goal/strategy is to stabilize the postpaid subscriber base.  By all accounts, Q1 2013 is going well in the ~ 60% range decrease in postpaid losses sequentially and year-over-year.  Though the company is still bleeding postpaid subs, the trend is positive. Q2 will be a crucial quarter as the iPhone goes on sale and the marketing to push AT&T switchers increase.  The trajectory looks good and the question for T-Mobile is which quarter the company crosses a positive net addition.

Wholesale to the Rescue

The pickup in MVNO and machine-to-machine subscribers have been saving the company's bacon for several quarters. Both categories account for 576K net adds.  The irony is that the MVNO partners such as Tracfone's StraightTalk and SimpleMobile are vying for the same price sensitive prepaid base is in the running for.  However this is likely to be a similar prepaid segmentation strategy that Sprint is employing.  When MetroPCS is complete, there will likely be additional rejiggering of the strategy.

Missing Data

We'll all have to wait for the financial numbers to be released in May. Aside from overall revenue and EBITDA margins, ARPU will be somethings that I'm looking for include the direction of CPGA and ARPU for postpaid and prepaid.   

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Tier 1 Q4 2012 Smartphone Growth and the iPhone

Now that three Tier 1 carriers have reported their Q4 results, here are some observations and commentary on smartphone growth.  As most industry people know, smartphones are the hot user commodity. Smartphones serve many purposes from a churn reduction tool, to ARPU uplift (offsetting voice revenue decline) to increasing operational efficiency (move data consumption to a more data efficient (capacity and throughput to the LTE network). But the old 3G network also has legs so for now, wholesale (MVNOs & M2M) and prepaid can extend return on old investment there.

iPhones have been a catalyst for increased carrier data revenue. AT&T's past  iPhone exclusivity has allowed it to accumulate a massive customer base that proven to be low-churn and loyal. With the exclusivity gone, other carriers (through Apple's deal-making and carriers' realization that an iPhone is competitive table stakes) also jumped on the iPhone bandwagon.  The notion that iPhone is such a powerful sales acquisition and retention tool has played out again in Q4 2012.

For the big three, AT&T, Sprint, and Verizon Wireless, smartphones sales/activations continue to be on a positive track.  AT&T reported 10.2 million smartphone sales in Q4, while Verizon Wireless came close at 9.8 million, and Sprint posting 6.1 million. These added up to 26.1 million smartphones.  The interesting observation is how many of these smartphones were iPhones.

• AT&T - 8.6 million
• Verizon Wireless - 6.2 million
• Sprint 2.2 million

As a percentage of the overall Q4 smartphone sales, iPhones activations accounted for:

• AT&T - 84%
• Verizon Wireless - 63%
• Sprint - 36%

On the whole among the three Tier 1 carriers, the iPhone accounted for 65% of smartphone activations. 

Impressive stats for sure. With contenders from BlackBerry (BB10 OS), Microsoft (Windows Phone 8) and Android, can the iPhone in the U.S. continue its run?  I submit that this hinges on Apple innovation.  As I've said previously, Apple needs to innovate, as its user interface (UI) is aging with incremental innovation.  Customers have a lofty expectation of radical things for each iPhone (and iPad) model.   Apple needs to deliver in 2013 or the early adopters (and then the mainstream) will move on.   

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