The "uncarrier" blew past all expectations as it added another 648,000 subscribers. This is the second quarter in a row that T-Mobile has seen impressive growth and much of its success is being attributed to the fact that it did away with annual service contracts.
These plans have become popular overseas but T-Mobile is one of the first major U.S. carriers to offer them. As a result of its impressive subscriber growth, T-Mobile was able to outpace AT&T and is now putting pressure on Sprint and Verizon as well.
Coming From Losses
T-Mobile's growth is definitely impressive when just compared against that of its competitors, but after four years of losses, T-Mobile has even more to celebrate. The massive influx of new customers came immediately after T-Mobile did away with its regular contracts, opting for month-to-month contracts instead of the industry standard 24-month deals.
Despite the great report, T-Mobile did fall 1 percent on the stock market but analysts are attributing that to short-term investors cashing out. Overall, T-Mobile's share value has increased by 22 percent since the end of August.
Along with changing its plans, T-Mobile now allows customers to upgrade more frequently. Even though there are no service contracts, discounted phones still come with their own long-term contracts, but T-Mobile allows subscribers to upgrade early as long as they bring back their phones.
A New Trend?
Now that all of the major carriers have introduced early upgrade deals for subscribers (something that was unheard of just two years ago), it may be possible that Verizon, AT&T, and Sprint will follow T-Mobile and switch to similar no-contract plans.
Verizon and AT&T do have some prepaid options but they are generally far less efficient than their main plans. As such, T-Mobile is the only top U.S. carrier to actually switch to no-contract plans.
Alternative carriers such as Ting have become incredibly popular around the U.S, touting low cost, reliable, and no-contract plans. Straight Talk is perhaps the most popular carrier when it comes to no-contract plans. Although it is cheap, the service runs off the networks of Sprint, T-Mobile, and Verizon. This means that you can attain a no-contract plan for a competitive price without sacrificing too much in the way of coverage.
No matter how great these alternative carrier deals are, they are still far less popular than any of the big name carriers. However, as we have seen in numerous other countries, no-contract plans are becoming increasingly popular. Now that T-Mobile has shown the growth potential with these plans, it is likely that the other major carriers are at least considering them.
Whether or not the other carriers adapt and begin to offer better no-contract plans, they will still have to start taking T-Mobile seriously, as its growth continues to outpace the largest carriers in the country.