The CEO of T-Mobile, Mike Sievert, recently spoke about the company’s record-breaking performance in the second quarter of the year. Despite other companies facing cautionary signals in the market, T-Mobile has seen a significant increase in new accounts and overall growth.
Record Growth
In the first and second quarters of the year, T-Mobile saw the biggest growth in its history. Sievert stated that in the second quarter alone, the company delivered 380,000 new accounts – the highest number ever recorded. He attributes this success to T-Mobile’s strategy of being the “un-carrier,” offering consumers more affordable options and not raising prices like its competitors.
Competitor’s Price Increases
T-Mobile’s competitors, AT&T and Verizon, have raised prices citing inflation as the reason. Sievert, however, believes that this is just an excuse and that T-Mobile’s strategy of being the un-carrier has allowed them to avoid increasing prices. The company has also introduced a “price lock” feature, ensuring that prices will not be raised in the future.
Cost Pressures
Sievert acknowledged that T-Mobile also faces cost pressures, such as rising labor costs and equipment expenses. However, the company has long-term contracts and arrangements in place that lock in pre-inflationary prices, giving them some insulation against these pressures.
Bad Debt
When asked about customers not paying their bills on time, Sievert stated that it is a normal occurrence for the company and that they work with customers to recover the debt. He also mentioned that T-Mobile reported elevated bad debt levels to pre-pandemic levels but that they are comfortable managing it and have guided EBITDA up in the same report.
Churn
Sievert also touched on the topic of customer churn, stating that T-Mobile’s position as a pure-play mobile internet company in an era where internet usage is becoming increasingly mobile is a significant advantage. The company’s record growth and success in managing customer relationships are evidence of this.
conclusion
T-Mobile’s strategy of being the “un-carrier” and offering affordable options to consumers, along with its long-term contracts and cost management, has allowed the company to see record growth and success in the second quarter. Despite facing similar cost pressures as its competitors, T-Mobile has not raised prices and continues to provide value to its customers.