As a result, the company is growing at an alarming rate. T-Mobile already added more than 3.5 million customers this year, more than any other carrier. The pink carrier commands about 18% of the wireless market, up from 11% at the beginning of the year. Nearly a third of new wireless customers or people switching their cell phone service are choosing T-Mobile.
Yet T-Mobile's moves have been unpopular with shareholders -- the stock is down 21% this year, way more than Verizon and AT&T's far more modest swoons. Much of that has to do with the fact that T-Mobile failed to strike a merger with potential suitors Sprint or Dish (DISH). But shares also suffered as investors worried about how the marketing campaign affected T-Mobile's profit.
"The managerial histrionics that have played so well with consumers have worn thin with investors, who fear that T-Mobile is putting growth above profitability," noted Craig Moffett, senior analyst at MoffettNathanson Research.
^ I agree. Investors only seem to care about "this quarter's earnings", which leads to CEO's making bad decisions.
Gaining as much market share as possible is a good long term strategy. Profitability will follow. Investors need to STFU.
Gaining as much market share as possible is a good long term strategy. Profitability will follow. Investors need to STFU.
I STRONGLY disagree. This is another example of the "we'll make it up on volume" that nearly destroyed the auto supply base. Many investors do tend to be short term thinkers. But a company still needs a profitable strategy, not just grow share. Market share != profit
Jeff
If only it was that simple.TMO has gained over 4 million new customers sending them money every month since mid 2013. If the average bill is 50/month, thats 200 million dollars extra cash. Per month.
I am buying up TMUS hand over fist
T-Mobile is a great long-term play right now, they're making the moves they need to be competitive with AT&T and Verizon nationally on a large scale. Long term, that's great for investors AND consumers. However, that means a short-term loss in shareholder profits and value.
The long-term investors probably aren't complaining much. Just the ones looking for a relatively quick buck.
I just wish that they put more money into their network and a bit less on advertising.
Verizon might be pure evil, but at least you can get cell service from them in rural areas.
I just wish that they put more money into their network and a bit less on advertising.
Verizon might be pure evil, but at least you can get cell service from them in rural areas.
There's a risk when you make an aggressive play for market share that you turn the industry into one where it's hard for anyone to make a profit (see: Amazon). In this case though, T-Mobile wasn't making any money in the old model, either. If the FCC weren't going to let them merge with another player, the only real option was to shake up the market.
As a consumer, I'm tremendously thankful. My service bill this year was less than half of what it would have been under the old model.
buy buy buy! you can't miss this undervalued stock! this definitely going to the moon!
I really find that whole rural argument to be meaningless. Are so many of you guys from rural areas that coverage is an issue? I mean AT&T claims to cover 99% of the population. Even if that 1% is not covered, what % of that 1% actually surfs tech forums.I just wish that they put more money into their network and a bit less on advertising.
Verizon might be pure evil, but at least you can get cell service from them in rural areas.
I really find that whole rural argument to be meaningless. Are so many of you guys from rural areas that coverage is an issue? I mean AT&T claims to cover 99% of the population. Even if that 1% is not covered, what % of that 1% actually surfs tech forums.
I have carried an VZW iPhone and AT&T Android phone for some time now, and only very few cases has the VZW coverage been a factor. And there are just as many places where VZW sucks balls too (i.e. Manhattan)
VZW just plain rocks in the rural southwest.I really find that whole rural argument to be meaningless. Are so many of you guys from rural areas that coverage is an issue? I mean AT&T claims to cover 99% of the population. Even if that 1% is not covered, what % of that 1% actually surfs tech forums.
I have carried an VZW iPhone and AT&T Android phone for some time now, and only very few cases has the VZW coverage been a factor. And there are just as many places where VZW sucks balls too (i.e. Manhattan)
The CEO did mention in their latest uncarrier movement (not the specifics but mentioned it's coming and will have its own major announcement) that they were going to switch their current 2g/edge network over to LTE and expect most of it to be complete by the end of next year. He also mentioned their wideband expansion for better penetration in large cities.
Considering how fast they went from a barely LTE network, to nearly all major cities LTE in about a year to a year and a half, I'm willing to give them the benefit of the doubt.
No matter what carrier you have, you can all probably agree t-mobile is the one truly making strides in changing how the system works. Look at all the bundle deals some of these companies are now offering, when they wanted to rip you off for 1gb or 2gb of data before. They've all had to adjust to t-mobile making some big waves in the industry, and that's just great for us consumers.
but once LTE and beyond becomes the base norm, then I'd expect we'll see devices support more bands standard, and then won't people be able to roam a lot better?