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T-Mobile Sees Biggest Growth Quarter In Company History

T-Mobile's unconventional strategy seems to be working as the company gains momentum and market share.
Posted at 10:32 AM, Oct 28, 2014

T-Mobile's unconventional strategy is gaining momentum as the fourth-place mobile carrier posted its biggest growth quarter of company history.

The carrier looks unstoppable, posting its biggest growth quarter ever with 2.3 million new customers, making it the company's sixth straight quarter with more than a million new customers.

So what spurred all this growth? It might be the bold moves that shook up — and probably angered — its competitors in the mobile carrier industry.

A big piece was its un-carrier campaign where the company promoted freedom from contracts.  

"You guys are amazing at this bossing people around stuff."

"So what are you going to do?"

"Something better."

But to end contracts before they expire, someone needs to pay the early termination fees. So T-Mobile decided it would do that, too.

JOHN LEGERE ON CNBC: "This is serious, philosophical change in our business — the end of early termination fees, which we believe is important because it's the death knell in contracts. ... We're going to eliminate the entire ETF."

That's when the other carriers got nervous. AT&T preemptively targeted T-Mobile customers ahead of the announcement with up to $450 per line to switch. And Sprint, nervous it might lose market share, has launched a similar promotion.

As ComputerWorld reported in August, third-place Sprint has had trouble fending off T-Mobile's assault. Its wireless market share fell to 16 percent of all U.S. wireless subscribers, just barely staying ahead of T-Mobile's 15 percent.

All this growth has come at a cost, though. While analysts expected a profit of 2 cents per share, the company actually posted a net loss of $94 million, or 12 cents a share. The company said the loss was due to higher selling and administrative costs.

And investors seemed satisfied with that answer. T-Mobile stock was up before the markets opened Tuesday. Sprint's third quarter results will be released next Monday.

This video includes images from Getty Images.