T-Mobile US: Big investments, big results for 2022
2022 was the company’s ‘best year ever,’ says CEO Sievert
T-Mobile US rounded out 2022 with postpaid net customer additions of 1.8 million in the fourth quarter and 6.4 million for the year, beating its guidance and recording record-low churn of 0.88%. Q4 2022 — 6.4 million in 2022, exceeded guidance
CEO Mike Sievert said on the results call with analysts that 2022 was the company’s “best year ever” and that it met or exceeded its guidance across the board by setting itself up as the mobile network offering both network quality and value.
“T-Mobile is not only the 5G leader, but now, the overall network leaders, and this opens big growth pathways for our future,” Sievert said, going on to add: “Our strategy is differentiated and durable because it’s driven by taking share in places where we’re massively underpenetrated relative to the competition, and where we now have the winning hand,” Sievert said. As one example, he pointed to T-Mobile’s business offering snagging one of its highest-ever figures for phone net adds in the fourth quarter, while Verizon saw high business churn numbers.
In broadband, the company saw net additions of 524,000 in Q4 and 2.0 million for the year. Asked about convergence and bundling wireline services/strategy during the quarterly call, Sievert said that he had no interest in major changes to its strategy of focusing on wireless. “That is the place where the future lies and where we want to be,” he said, while adding that it may make sense to work with partners on converged offers.
T-Mo reported total service revenues up 4% during the fourth quarter to $15.5 billion, and up 5% year-over-year for 2022 to $61.3 billion. Postpaid service revenue growth was even better, at 7% YoY for the quarter and up 8% for the full year.
Net income was up 250% compared to the fourth quarter of 2021, but down 14% year-over-year to $2.6 billion due mostly to merger-related costs of $3.7 billion.
Sievert also said that T-Mobile US’ investments in cybersecurity “showed up in critical way” several weeks ago. “After identifying a criminal attempt to access our data through an API, we shut it down within 24 hours,” said Sievert. “And more importantly, our systems and policies protected the most sensitive kinds of customer data from being accessed. … While I’m disappointed that the criminal actor was able to obtain any customer information, we are confident that our aggressive cybersecurity plan … will allow us to achieve our goal of becoming second to none in this area.”
Other key takeaways from T-Mo’s fourth quarter and full-year 2022 numbers:
-Postpaid phone net additions were 927,000 in the quarter and 3.1 million for the year, with postpaid phone churn of 0.92% in Q4 and 0.88% for 2022.
-Prepaid net adds were 25,000 in the fourth quarter and 338,000 for the year. Prepaid churn for the year was 2.77%, which T-Mo said was the lowest in company history.
-The company recently announced a commitment to a net-zero target by 2040, the first of its kind in the U.S. wireless industry.
