T-Mobile will soon pass Sprint to become the number three carrier in the states30
Sprint has been held back by troubles with its network, which has cost them subscribers unhappy with the service. T-Mobile has been using its customer-friendly UN-Carrier approach to add to its top-line while sacrificing profitability. But T-Mobile's profits will be growing in coming quarters, according to Deutsche Telekom CFO Thomas Dannenfeldt. The German telecommunications giant owns 67% of T-Mobile's shares.
The other day, we told you that T-Mobile's profit margins were the lowest amongst the four major U.S. carriers. This is part of Legere's strategy to focus on bringing in new customers. To do this, T-Mobile offers low cost data plans along with a limited amount of free data for tablets, and allows customers to stream music for free. T-Mobile has seen its revenue rise, but at the expense of profit margins. But eventually, this should lead to higher profits. Deutsche Telekom's Dannenfeldt says, "In the same way as revenue increases when the number of customers grows, so earnings will improve in the next few quarters as revenue rises."
Other Deutesche Telekom executives are pleased with the success of T-Mobile. Chief Executive Tim Hoettges added, "I am convinced that T-Mobile US will continue to be a source of great satisfaction for us."
source: Reuters, NASDAQ via AndroidHeadlines