Partners: T-Mobile's Business Customer Growth Fueled By Expanded Business Services, Channel Focus
Unlike its rivals, T-Mobile, the third largest wireless carrier in the U.S., has steadily posted subscriber gains each quarter and the second quarter of 2017 was no exception.
The Bellevue, Wash.-based provider signed 817,000 branded postpaid customers in its second quarter, cruising past Wall Street's estimate of 731,250 new subscribers. But 2017 marks the first time that the consumer-focused company is reporting robust growth within its business customer base as well, according to T-Mobile.
T-Mobile CEO John Legere opened up the provider's quarterly earnings call by saying that the business services unit, T-Mobile @Work, contributed its highest share of postpaid customers in the company's history.
"We are making great progress towards breaking down [AT&T and Verizon's] stranglehold on business customers," Legere said. "In fact, 181 new logos in the enterprise, federal and public sector were added in Q2 and over 40 percent of Fortune 1000 companies are now T-Mobile customers."
PlanetOne is a Scottsdale, Ariz.-based master agent and one of the first T-Mobile Preferred Partners since the provider launched its channel program in 2014. The T-Mobile relationship is growing year over year and continues to exceed the master agent's expectations, said Lauren Shapiro, President of PlanetOne.
One of the ways T-Mobile has been able to grow its business services segment is through partners. Today the carrier offers a competitive residual compensation model, and is staying true to its "un-carrier," unlimited business philosophy, Shapiro said.
"T-Mobile cracked the code for channel success," she said. "Our T-Mobile sales continue to grow and we expect even greater growth as T-Mobile continues to invest in its infrastructure and channel programs.’
With a saturated consumer market, focusing on business customers will let T-Mobile continue its subscriber growth pattern, said Rob Chamberlin, co-founder and chief revenue officer of DataXoom, a Walnut Creek, Calif.-based wireless solution provider that partners with T-Mobile.
Chamberlin said that T-Mobile has bled into the small-to-midsized business space as a result of their consumer focus, but the provider is making investments in its business services unit to target larger companies.
"[T-Mobile] is ramping up the @Work program. Business services went from being the redheaded stepchild of T-Mobile, to being a focus," he said. "We are also seeing T-Mobile be more present in the channel."
T-Mobile's Legere also used the earnings call to shed some light on unconfirmed reports that rival wireless carrier and potential merger partner Sprint could be looking elsewhere for a strategic relationship.
Sprint's parent company Japan's SoftBank Group revealed in February that it was very interested in courting T-Mobile in an effort to combine the two companies. However, unconfirmed reports published in June suggest that Sprint, the fourth largest wireless provider in the U.S., could be exploring an exclusive wireless partnership with cable giants Charter Communications and Comcast instead.
’We have the same, but maybe more, opportunities from an inorganic or an expansion standpoint than we had last quarter,’ Legere said while addressing consolidation rumors during the Q&A portion of the earnings call. ’I feel equally as strong about all the things I did last time,’ he added.
T-Mobile reported $10.21 billion in revenue during Q2 2017, ended June 30, up 10 percent from $9.29 billion in the year ago quarter and beating Wall Street analyst expectations of $9.81 billion. Net income for the quarter was $582 million compared to $228 million in the same quarter one year earlier. The carrier reported earnings per share of 67 cents for the quarter, up 168 percent from 25 cents per share in Q2 2016 and far exceeding analyst's estimates of 38 cents for Q2 2017.