About Sprint Communications Company L.P.
T-Mobile US is one of the largest providers of wireless voice and data communications services in the US with more than 81 million customers. The company's T-Mobile and Metro by T-Mobile (formerly MetroPCS) subscribers use its networks domestically and can connect to the compatible network of Deutsche Telekom, which owns 30% of T-Mobile, when in Europe. In addition, T-Mobile sells phones, tablets, and accessories from such vendors as Apple, Samsung, and Google. It has about 2,200 T-Mobile and MetroPCS branded retail sites (ranging from kiosks to stores). In 2018, T-Mobile and Sprint agreed to combine in a $26.5 billion deal. US regulators are studying the proposed transaction.
T-Mobile provides wireless communications and equipment sales, including branded postpaid, branded prepaid, wholesale, and equipment sales.
Branded postpaid generally provides wireless communication services for phones, mobile broadband devices such as tablets, and wearables. The business accounts for about 50% of the total revenue.
Branded prepaid generally provides wireless communication services but the customers will pay in advance. The company offers prepaid service through the T-Mobile and Metro by T-Mobile brands. The business accounts for more than 20% of revenue.
Equipment sales include the sales of phones, tablets, wearables, and accessories. Equipment sales account for about 25% of the total revenue.
The Wholesale business includes sales to machine-to-machine and Mobile Virtual Network Operator customers that operate on the T-Mobile network but are managed by wholesale partners. The business accounts for about 5% of revenue.
T-Mobile US, based in Bellevue, Washington, gets all of its revenue from the US, including Puerto Rico and the US Virgin Islands. The company has more than 100 facilities, including switch centers, data centers, call centers, and warehouses, around the country. It also has some 64,000 macro towers and 21,000 distributed antenna systems and small cell sites in the US.
Sales and Marketing
T-Mobile US has about 2,200 T-Mobile and Metro by T-Mobile stores and kiosks around the US.
The company's largest customer segment is postpaid, which accounts for more than half of its customers and generates around 65% sales. The prepaid segment includes about a quarter of customers and accounts for about 30% of revenue; wholesale clients, roaming charges, and other services account for the remaining revenue.
T-Mobile's revenue has grown at a 9% a year clip over five years, rising from $29.5 billion in 2015 to $43.3 billion in 2018. Net income rose even faster, reaching $4.5 billion in 2017 (due to a tax benefit) from $247 million in 2014.
In 2018, sales rose 7% from $40.6 billion in 2017, driven by higher service and equipment revenue. Service revenue was up 6% year-to-year on growth in existing and new markets, which included the T-Mobile ONE Unlimited 55+ and T-Mobile ONE Military plans. Other factors were lower customer turnover, growth in connected devices, and contributions from Metro by T-Mobile brand. Equipment revenue increased 7% due to a higher average revenue per device sold. That more than offset a decrease in the number of devices sold.
T-Mobile reported $2.9 billion in 2018 net income, a 36% decrease from 2017, mainly because of higher taxes in 2018 after a tax benefit in 2017.
The company's cash on hand totaled $1.2 billion in 2018, about even with 2017's cash. In 2018, operations generated $3.9 billion in cash, while investing activities used $579 million and financing activities used $3.3 billion.
T-Mobile has significant long-term debt, $26.7 billion, which could limit flexibility in reacting to business changes or pursuing growth opportunities. In 2018, however, interest expense was $835 million compared to more than $1 billion in each of the previous two years.
T-Mobile calls itself the Un-carrier because of its strategy upending the wireless market by offering unlimited data at lower cost and doing away with annual service plans, among other changes. As other carriers such as Verizon and AT&T followed suit, T-Mobile offered more "un-carrier" programs such as unlimited streaming of Netflix. Such offerings have helped increase the number of subscribers has risen by more than 5 million a year for five straight years before dropping to just more than 4 million new customers in 2018. Further, the costs associated with the Netflix offering reduced average revenue per user by 32 cents in 2018 from 2017.
T-Mobile is putting its Layer3 acquisition to work in offering a Pay-TV service called TVision. Rolled out in the 2019 second quarter, the service offers local channels, sports, and traditional pay channels. The cost, $100 a month, is on par with competitor offerings, but T-Mobile vows not to raise prices.
T-Mobile is building out 5G across the US, including in six of the top 10 markets, with plans to have a nationwide standards-based network in place in 2020. The capability of a built-out 5G network is one of T-Mobile's selling points for its merger with Sprint.
Despite its growth, T-Mobile is still much smaller than Verizon and AT&T. Even the combination of T-Mobile, the third biggest provider, and Sprint, the fourth biggest, would make the combined company a bigger third place competitor. Verizon and AT&T have more resources and they've added other capabilities such as content that gives them a broader reach.
Mergers and Acquisitions
For the third time, Sprint and T-Mobile, majority-owned by Deutsche Telekom, agreed to team up in a $26.5 billion deal that would form the third largest wireless carrier after Verizon Communications and AT&T Inc. Previous attempts were scuttled by regulators' antitrust concerns. Sprint and T-Mobile hope that a new regulatory environment gives them a better chance this time. They promised to keep prices low for consumers while using their assets to build a robust 5G network, the next generation of wireless technology. The merged company would take the T-Mobile name. The deal came together once Softbank, Sprint's majority owner, agreed to give Deutsche Telekom control of the combined company. Many of the antitrust issues that ended the previous merger attempts remain. T-Mobile and Sprint must overcome concerns that so much of the US's wireless service would be provided by just three companies.
In 2018 T-Mobile acquired Layer3 TV. T-Mobile rolled out a TV service, TVision, built on Layer3 technology in 2019.
6391 Sprint Pkwy
Overland Park, KS 66251-6100
Phone: 1 (800) 829-0965
Employer Type: Privately Owned
Indir Account Executive: Michaelangelo Lopez
Director of Retail Promotions, Corporate Marketing: Mark Rexroat
Employees (This Location): 800
Employees (All Locations): 22,000
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