T-Mobile US is one of the largest providers of wireless voice and data communications services in the US. The company's 61 million T-Mobile and MetroPCS contract and prepaid consumer customers use its networks domestically and are able to connect to the compatible network of Deutsche Telekom when in Europe. It also offers low-cost, no-contract mobile services through the GoSmart brand. In addition, T-Mobile sells phones, tablets, PDAs, and accessories from such vendors as Apple, Nokia, and Samsung. It has about 8,000 T-Mobile and MetroPCS branded retail sites. In 2013 Deutsche Telekom acquired smaller rival MetroPCS via a reverse merger and combined it with T-Mobile; Deutsche Telekom owns about two-thirds of the combined company.
Sales and Marketing
T-Mobile markets its services and products via its own network of retail locations, as well as through more than 60,000 third-party retail locations and online. Its largest customer segment (about 70% of revenue) is postpaid subscribers. Prepaid customers account for about a quarter of revenue and wholesale clients, roaming charges, and other services generate the rest.
In 2014 T-Mobile reported about $29 billion in revenue, up 21% from the prior year. The growth was powered by a $2 billion increase in prepaid service revenues, a $1 billion rise in postpaid service revenues, and a $1.5 billion increase in equipment sales. The contributions of the Metro PCS network also contributed to revenue growth.
T-Mobile's profit zoomed more than 600% higher in 2014 to $247 million on the higher revenue. Cash flow from operations also rose in 2014 from 2013 to $4.15 billion from $3.5 billion.
The company has crafted a "Un-carrier" strategy to compete with the big boys such as Verizon Wireless and AT&T Mobility. It has offered a line of Simple Choice plans that eliminate annual contracts, as well as caps and overage charges. T-Mobile has also introduced a simpler handset upgrade program and reduced some international calling rates and roaming fees when traveling outside the US. The company pays early termination fees for customers who leave another carrier for T-Mobile. Other carriers have followed the company's lead and done away with contracts.
Another key initiative of T-Mobile's strategy is heavy investment in network modernization to support its nationwide 4G LTE (long-term evolution) technology. Wideband LTE is available in 245 markets and is expected to be available in more than 260 markets by the end of 2015. Extended Range LTE covers nearly 175 million people and is on track to cover more than 350 markets by year-end 2015.