In recent years, the stand-out performer in the ultra-competitive U.S. mobile market has been T-Mobile, which has more than doubled its subscriber base to almost 70 million since March 2013.
Under the stewardship of CEO John Legere, the company has lifted itself from an unremarkable mid-market position and taken the fight to dominant players Verizon Wireless and AT&T Mobility. How did they manage that?
Exit Strategy
In 2011 T-Mobile was on the verge of abandoning the U.S. mobile market altogether—a fate that was only prevented when AT&T’s $39 billion takeover attempt was abandoned in December 2011. This was following strong opposition from the FCC, the Department of Justice, and a number of attorneys general.
As a direct result of AT&T’s failure to complete the deal, T-Mobile benefitted from a “break-up fee” of $3 billion in cash. They also received a large package of advanced wireless services mobile spectrum in 128 cellular market areas, including 12 of the top 20 markets.
Bumper Package
The bumper spectrum package allowed T-Mobile to make up for lost time and work toward its side-lined LTE network rollout, eventually introducing 4G technology in a number of key markets in March 2013.
Despite inaugurating LTE services more than two years after its rival operators, T-Mobile enhanced its network dramatically and its 4G infrastructure now covers 315 million Americans.
Despite inaugurating LTE services more than two years after its rival operators, T-Mobile enhanced its network dramatically and its 4G infrastructure now covers 315 million Americans.
Netflix and Chill
T-Mobile also caused a stir with its evolving “UnCarrier” strategy, which has seen it abolish annual service contracts, scrap data roaming charges in hundreds of countries, and cancel limits on upgrades, among other initiatives.
Most recently, the cellco introduced free Netflix subscriptions for its Family Allowance customers.
Marathon, Not a Sprint
In September 2017 it was reported that long-time suitors T-Mobile and Sprint were exploring a tie-up once again, a deal that is expected to be helped by the Trump administration’s pro-business position.
Since the previous merger attempt failed, T-Mobile has leapfrogged its rival in terms of market share and now holds the strongest negotiating position. As such, if the deal comes to fruition, parent company Deutsche Telekom is expected to take the majority stake.
Since the previous merger attempt failed, T-Mobile has leapfrogged its rival in terms of market share and now holds the strongest negotiating position.
Based on TeleGeography’s June 2017 data, the enlarged company would automatically take pole position in the U.S. wireless market, with a 35.2 percent share of the spoils, ahead of current leaders Verizon (33.1%) and AT&T (29.4%).
Turnaround Timeline
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March 2011 |
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Deutsche Telekom enters into a definitive agreement to sell T-Mobile USA to AT&T Inc. for $39 billion |
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December 2011 |
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AT&T abandons takeover of T-Mobile in the face of regulatory pressure |
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April 2012 |
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T-Mobile receives spectrum in 128 markets from AT&T; break-up fee also includes $3 billion in cash |
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September 2012 |
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John Legere appointed CEO of T-Mobile US |
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March 2013 |
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T-Mobile USA belatedly launches LTE, in Baltimore, Houston, Kansas City, Las Vegas, Phoenix, San Jose, and Washington D.C. |
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May 2013 |
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T-Mobile USA closes merger with pre-paid specialist MetroPCS; company renamed T-Mobile US |
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June 2013 |
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Addition of MetroPCS customers helps T-Mobile pass 40 million subscriber base |
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June 2014 |
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Sprint offers $32 billion for T-Mobile US |
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August 2014 |
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Sprint scraps projected takeover due to regulatory hostility |
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December 2014 |
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T-Mobile reaches 50 million subscriber milestone |
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January 2015 |
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T-Mobile bids $1.774 billion for 157 AWS-3 licences in FCC auction |
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March 2016 |
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T-Mobile passes 60 million subscriber mark |
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February 2017 |
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T-Mobile dominates FCC’s 600MHz auction, agreeing to pay $7.993 billion for a total of 1,525 licences |
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August 2017 |
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T-Mobile launches world’s first 600MHz LTE network |
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September 2017 |
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T-Mobile and Sprint reportedly initiate merger talks; DT set to take majority stake |
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2019 |
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T-Mobile expects to launch 5G technology |
5G Future
“My job has always been to unleash and empower – and I’ll tell you what, we are not done yet," said Legere.
And he seems to be telling the truth. In terms of network developments, T-Mobile threw down the gauntlet to its rivals when it agreed to pay $7.99 billion for a total of 1,525 regional 600MHz licenses in the FCC’s most recent spectrum auction, going on to activate the world’s first 600MHz LTE network in August 2017.
Going forward, T-Mobile has announced that it plans to commence its 5G network rollout in 2019 and expects to achieve a nationwide footprint by 2020, utilizing its recently-acquired 600MHz spectrum holdings alongside its supply of 28GHz and 39GHz band frequencies.
Tom Leins
Tom Leins is a Senior Research Analyst for TeleGeography’s GlobalComms Database. Based out of the company’s UK office, he also contributes to the company’s daily CommsUpdate newsletter, which includes his popular weekly MVNO Monday round-up. MVNO industry aside, Tom has developed a strong specialization in the U.S., Latin America, and the Caribbean, tracking mergers and acquisitions, spectrum auctions, regulatory developments, market opportunities, and growth trends.