T-Mobile Gains the Most, Slows Down Growth

Sprint Close Behind, as AT&T and Verizon Maintain Customer Base

Consumer Intelligence Research Partners, LLC (CIRP) today released analysis of the results from its research on mobile phone companies for the calendar quarter that ended December 31, 2017. This analysis features findings about consumer trends in mobile phone activations from April-June, 2017 for AT&T (T), Verizon (VZ), Sprint (S), and T-Mobile (TMUS).

CIRP finds that among major mobile phone companies, T-Mobile had the best quarter, combining retention of existing customers, gains of new customers from other carriers, and first-time customers.

Based on our analysis of customer activations, we identify customers that renewed contracts with their existing mobile carrier, customers that switched carriers, and first- time mobile phone buyers. Combining these three factors, among customers that activated a phone during the quarter, T-Mobile grew its customer base 15%, relative to the number of customers that started the quarter as T-Mobile customers and entered the market to renew or switch carriers (Chart 1). (Note this does not indicate that T- Mobile’s entire installed base of customers grew by that percentage in the quarter.)

Chart 1: Carrier Share of Phone Activators at Start and End of 2017-Q4 

Chart 1: Carrier Share of Phone Activators at Start and End of 2017-Q4 

We take a quarterly view of loyalty and churn, focusing on customers who chose to activate a phone. T-Mobile started with 16% of the consumers in our quarterly survey of phone activators, and ended the quarter with 19%, growing its quarterly share by 15%, the highest of the four major carriers. Sprint was close behind, growing its share by 10%. AT&T and Verizon continue to just maintain their positions, barely growing in the quarter. Yet, T-Mobile has seen much greater net growth in earlier quarters, ranging from 20-30%, compared to 15% in this quarter.

Change in share for the quarter consists of customers who activated a phone that started with a carrier, plus those that became new customers of the carrier, minus those that switched away from that carrier. T-Mobile attracted new customers that switched from other carriers equal to 28% of the activating customers it had at the start of the quarter, and attracted first-time phone buyers equal to 5% of its base. T-Mobile also lost 19% of its customers that activated a phone during the quarter to other carriers. (Table 1).

Table 1: Customer Gains and Losses by Carrier – 2017-Q2 

Table 1: Customer Gains and Losses by Carrier – 2017-Q2 

How these carriers grow, by retaining current customers and gaining customers from other carriers, matters as much as the extent of the growth. AT&T and Verizon typically have the most loyal customers, but at the same time have a difficult time attracting customers from other carriers. Sprint and T-Mobile tend to lose a higher percentage of customers compared to AT&T and Verizon, but at the same time have a higher rate of customer switching from other carriers.

While the four leading carriers trade customers, as a group much of their growth comes at the expense of regional and non-affiliated pre-paid carriers. The regional and pre-paid carriers retained a much smaller percentage of their customer base, and attracted a smaller percentage of new customers from other carriers, as well.

CIRP bases its findings on a survey of 500 US subjects, from July 1-11, 2018, that activated a new or used phone in the October-December 2017 period. For additional information, please contact CIRP.