T-Mobile’s stock jumped nearly 5 percent today after the fourth-largest U.S. carrier reported a record 8.3 million net customer additions in 2014 and laid out aggressive plans for 2015.
“Our competitors are complaining about ‘irrational competition’ and ‘temporary periods of intensity, ‘and returning to normal circumstances’,” said T-Mobile’s marketing chief Mike Sievert during an investor conference today. “There will be no normal, this is the new normal, and it’s working really well for T-Mobile.”
T-Mobile’s shares jumped 4.7 percent, up $1.26 a share, today to close at $28.14.
Without going into specific forecasts for subscriber growth or financial results, T-Mobile painted a very positive picture, starting with its network aspirations. “I’m very tired of that Verizon map,” said T-Mobile’s CTO Neville Ray, who aims to cover 300 million people with its faster network speeds by the end of the year. “I’m going to rip it up in 2015.”
T-Mobile’s network is often criticized for not being as large as the competition, but by the end of the year, Ray said it will have finally caught up to both AT&T and Verizon’s footprints.
In terms of subscriber growth, last year will be difficult to beat. This morning, T-Mobile announced preliminary results for the year, saying it added 8.3 million new customers and 2.1 million customers in the fourth quarter alone. In total, it now has just over 55 million subscribers.
“I don’t believe that we’ll replicate that level of success in 2015,” said CFO Braxton Carter. “I think we are going to have incredible momentum, we are going to grow significantly outside of our market share, by adding more of the gross and net additions than our competitors. We are very optimistic on the growth profile.”
Sievert was a little less cautious: “The truth is, we are consistently way over performing on our promises because what we are doing is resonating with customers.”
Financially, Carter offered some insight into operations, hinting that the company reached its earnings target in the fourth quarter and that he anticipates positive free cash flow in 2015.
Some critics wonder how T-Mobile can continue to build out its network at such a frantic pace, while continuing to offer even more incentives for customers to switch to the carrier. Over the past year, it has rolled out eight initiatives, ranging from WiFi calling to free music streaming services.
Sievert pulled back the curtain a bit on its strategy, saying that it’s not magic.
“Our customers are paying for those services more than they have ever paid before,” he said. “We aren’t a price leader. We don’t play on price, but what we do offer is a great value. We have done eight big industry moves that have very little to do with changing our prices.”