T-Mobile’s Q1 2013 Shows 500K iPhone 5 Sales In One Month, Signs The ‘Un-Carrier’ Plan Is Working

Posted: May 8, 2013 in Technology

20130508-210016.jpg T-Mobile USA has reported its first quarter earnings
for 2013, and this marks the first reporting period ever
that the newly rebranded “Un-Carrier” has included
iPhone 5 sales, which began at T-Mobile April 12,
prompting line-ups of interested customers. 500,000
new iPhone 5s were sold during the few weeks they’ve been available so far, T-Mobile reports. Unlike some other carriers, T-Mobile doesn’t state
what percentage of those went to new customers,
saying simply that those 500,000 went to a mix of
“new and existing customers.” But we can still do a
fair comparison of straightforward sales, as Sprint
sold 1.5 million iPhones during its most recent quarter, which was a mix of all device types, not just
the iPhone 5. That means interest was relatively
strong at T-Mobile, since it managed to bring in one-
third of that total for the iPhone 5 alone in just a third
of the time. That’s an indication that T-Mobile’s $99 pricing of the
iPhone (which is offset by a monthly device lease for
subscribers) is likely working well. What isn’t clear yet
is how well the Un-Carrier scheme is working: T-
Mobile added 3,000 net branded customers during the
quarter, but lost 199,000 postpaid subscribers and added 202,000 prepaid users. Those adopting the new
Un-Carrier plans still count as postpaid customers,
even though they don’t have fixed term contracts. Like the iPhone 5, the Un-Carrier plans have only
been around for about a month of the total quarter, but
there are still signs that despite the continued
disparity between postpaid and prepaid growth,
customers are coming around. Postpaid churn (loss
of subscribers) was 1.9 percent, which is the lowest since the second quarter of 2008. The 199,000
subscriber loss was also a 61 percent improvement
over the postpaid decline in Q1 2012, meaning that
while the carrier still didn’t see positive growth, it may
be on the way to turning things around. In terms of earnings, T-Mobile reported $1.2 billion in
EBITDA for the quarter, a sequential improvement of
12.4 percent, but a year-over-year decrease of 7.5
percent. ARPU for branded postpaid declined by 6.3
percent, which T-Mobile says is the result of
customers embracing their Value and Simple Choice plans. ARPU for prepaid is increasing, up 11.3
percent, but there’s still a wide gap between the two.
Going forward, watching how ARPU is affected by the
Un-Carrier plans will be a key metric for determining
T-Mobile’s success with that new initiative.

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