T-Mobile adds 1M customers as Uncarrier push pays off

The company touts the biggest volume of phone customer additions in the industry for second consecutive quarter, as its losses narrow significantly.

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Roger Cheng
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T-Mobile CEO John Legere.
T-Mobile CEO John Legere. Lori Grunin/CNET

The T-Mobile customer growth engine is picking up steam.

The carrier added more than a net 1 million new customers in the third quarter, including a net new 648,000 so-called postpaid customers, who tend to have stronger credit history and are willing to pay more each month. It ended the period with more than 45 million customers.

"Our momentum is great and we have confidence that we can continue to deliver sustainable and profitable growth," CEO John Legere said in a statement.

The No. 4 wireless carrier posted a loss of $36 million, compared with a loss of $7.74 billion from a year ago, when it recorded a massive noncash charge in relation to the merger between T-Mobile and MetroPCS. The company didn't disclose its per-share loss or share count, but will do so later this week in its 10-Q filing with the Securities and Exchange Commission.

Revenue rose 37 percent to $6.69 billion.

That's better than Wall Street's average estimate of $6.57 billion in revenue.

It's been a sharp turnaround over the past two quarters, with T-Mobile having returned to customer growth at a time when its larger rivals have been losing customers or seeing their growth dramatically reduced. The company's "Uncarrier" initiative, which included a no-contract model, early upgrade program, free international data roaming, and, most recently, an offer of 200 megabytes of free data for tablets, has caused consumers to give it a second look.

For the second quarter, T-Mobile boasted the most new phone customer additions in the industry, an indication that its strategy is paying off.

Its growth came as Sprint lost 313,000 net customers and AT&T couldn't hang on to its feature phone customers.

In the quarter, T-Mobile sold 5.6 million smartphones, although the company didn't disclose the number of iPhones sold in the period. Like the other carriers, it was hit with shortages that limited how many iPhone 5S units it could sell after the launch.

Total average revenue per user fell to $45.38 from $50.55 in the period, as the total turnover rate remained flat at 3.1 percent. Its branded postpaid turnover rate, however, did improve to 1.7 percent from 2.3 percent a year ago.

T-Mobile boosted its projection for net new customers for 2013 to 1.6 million to 1.8 million, up from a prior range of 1 million to 1.2 million.