Sprint, T-Mobile US Tout Subscriber Growth: Will AT&T and Verizon Tout ARPU?
Average revenue per user, or average revenue per account are important measures of mobile service provider operational performance. The total number of accounts, and the composition of accounts (prepaid or postpaid; tablet or phone) also are important.
With a mobile marketing war going on in the U.S. market, the value of each metric might change. At a high level, Sprint and T-Mobile US are likely to tout subscriber growth. AT&T and Verizon are likely to soon emphasize ARPU or ARPA.
The reasons are prosaic as well as strategic. No company likes to report negative numbers, and eventually, it is possible AT&T or Verizon or both might actually have to report negative account figures. It hasn’t happened yet, but it is possible.
T-Mobile US and Sprint, on the other hand, are gambling on a furious pursuit of account growth, at the expense of ARPU or ARPA. Executives at those firms will be no more happy to report negative numbers for ARPU or ARPA, and will tout account growth.
Sprint preannounced net account growth in the calendar fourth quarter (Sprint’s third fiscal quarter) of 2014.
During the quarter, Sprint platform net additions totaled 967,000 including postpaid net additions of 30,000, prepaid net additions of 410,000 and wholesale net additions of 527,000. That reversed a trend of account losses.
“The growth in postpaid customers was driven by the highest number of postpaid gross additions in three years, and postpaid phone gross additions increased 20 percent for the quarter year-over-year,” Sprint said. “ In addition, the percentage of prime customers was the highest on record.”
Non-prime customers are those who are subject to involuntary churn, being disconnected for non-payment of their bills. In fact, financial performance at Sprint is credited with a 10-percent drop in profits for Sprint parent SoftBank.
T-Mobile US, for its part, likewise touted high account growth for its fourth quarter of 2014.
In the fourth quarter, T-Mobile US added 2.1 million net customers, the seventh quarter in a row that T-Mobile US has generated more than one million net customer additions.
Branded postpaid net customer additions were 1.3 million, a 47 percent improvement compared to the fourth quarter of 2013, T-Mobile US said.
Branded postpaid phone net additions were over one million, implying T-Mobile US activated about 300,000 tablet connections.
For the full-year 2014, the Company reported branded postpaid net customer additions of 4.9 million and 8.3 million net total customers, an 89 percent increase from the prior year.