T-Mobile's all-in bet on unlimited pays off

The carrier's move to eliminate all options except for its T-Mobile One unlimited data plan didn't slow its momentum down.

Roger Cheng Former Executive Editor / Head of News
Roger Cheng (he/him/his) was the executive editor in charge of CNET News, managing everything from daily breaking news to in-depth investigative packages. Prior to this, he was on the telecommunications beat and wrote for Dow Jones Newswires and The Wall Street Journal for nearly a decade and got his start writing and laying out pages at a local paper in Southern California. He's a devoted Trojan alum and thinks sleep is the perfect -- if unattainable -- hobby for a parent.
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Roger Cheng
3 min read

T-Mobile CEO John Legere at his CES press conference, when he talked about moving to just a single unlimited data plan.

James Martin/CNET

No choice appears to be the right choice for T-Mobile customers.

The backlash over T-Mobile One -- the company's unlimited data plan -- seems like a distant memory. When the carrier in August first unveiled its decision to remove all of its plans in favor of a single unlimited option, it drew heaps of scorn as customers complained that they would be forced into a pricier plan. Others simply decried the lack of options.

T-Mobile initially pulled back from the move, letting people choose its existing plans for a few months. But after "eliminating" taxes and fees, the company in January pulled the trigger and went all in on its unlimited data plan.

There appears to be no more lingering bitterness: the T-Mobile train kept chugging along with 1.1 million new customers in the first quarter.

The growth comes amid one of the most competitive stretches in the wireless business, as the carriers step over each other to win your business. Verizon on Thursday posted its first-ever loss of post-paid customers -- people who pay at the end of the month and boast higher credit scores and loyalty -- because it was late to the unlimited game.

That T-Mobile continues to outstrip the industry in customer growth during this period underscores the momentum behind the "Un-Carrier" movement. Still, T-Mobile's own growth slowed down from a year ago.

"To be sure, growth has moderated a little from peak rates a year ago...but only a little," said Craig Moffett, an analyst at MoffettNathanson.

But a look at T-Mobile's results vs. Verizon's performance highlights the difference in trajectory. T-Mobile gained 914,000 post-paid customers, including 798,000 who used a phone. It also added 386,000 pre-paid customers.

Verizon, on the other hand, said it lost 289,000 post-paid phone customers, and 307,000 in total, marking the worst period for customer growth. The company said it saw things rebound after it unveiled its own unlimited plan in February.

T-Mobile estimates it captured 250 percent of the subscribers in the period, which suggests its rivals lost customers. "We right now are the wireless business," CEO John Legere said on a conference call with analysts.

We'll get another chance to see the effects of T-Mobile when AT&T reports results on Tuesday.

Legere took his shot at Comcast and its announcement of its Xfinity Mobile service. "They're arrogant and they'll fail miserably," he said, reiterating a theme he espoused during CES 2017.

Watch this: T-Mobile CEO to cable: Welcome, and get ready to get your ass kicked

Comcast wasn't immediately available to comment.

More T-Mobile everywhere

T-Mobile is pushing its "Un-carrier" movement to more parts of the country.

The company was the top bidder in a recent government spectrum auction that should boost its coverage throughout the nation. Chief Technology Officer Neville Ray said he expects to put some of the 600 megahertz band to use this year, and noted that at least one phone from Samsung would be able to take advantage of the new radio frequency.

In addition, the company plans to open 3,000 new stores, half of which will be T-Mobile and the other half pushing its MetroPCS prepaid service.

"All the ass-kicking is done in a world where we're competing in two-thirds of the country," Chief Operating Officer Mike Sievert said on the call.

T-Mobile, the nation's third-largest wireless carrier, posted first-quarter earnings of $698 million, or 80 cents a share, and revenue of $9.61 billion. Excluding one-time items, T-Mobile's earnings would have been 48 cents a share.

Analysts, on average, forecast earnings 34 cents a share and revenue of $9.62 billion, according to Yahoo Finance.

T-Mobile shares fell 0.8 percent to $65.42 in after-hours trading on the revenue miss and slowing customer growth.

The story originally published at 1:18 p.m. PT.

Updated at 3:05 p.m. PT and at 9:07 a.m. PT on April 25: To include additional background and quotes from the executives.