T-Mobile’s aggressive “un-carrier” promotion plan resulted in a net gain of 1.6 million subscribers in the fourth quarter, but losses widened to $20 million as a result of the company’s aggressive marketing tactics.
The company posted a net loss of three cents a share on revenue of $6.83 billion, compared to analyst expectations, on average, of a loss of 13 cents per share on $6.95 billion in revenue. T-Mobile’s stock price was down less than one percent on the news in pre-market trading.
T-Mobile net subscriber additions of more than 1.6 million increased from just 61,000 in the year-ago period, driven by its campaign to acquire new customers, and retain existing ones, through various initiatives, such as offering phones for no money up front and giving some customers unlimited data and texting worldwide at no extra cost. Not surprisingly, such promotions are not cheap — the $20 million loss in the fourth quarter of 2013 was a 150 percent increase from a loss of $8 million in the same period last year.
The company is forecasting the addition of two million to three million net subscribers in the 2014 calendar year.
(Correction: An earlier version of this story incorrectly attributed the company’s subscriber gains and rising costs in the fourth quarter to a T-Mobile initiative to reimburse new customers for the early termination fees their previous carriers charge them for breaking a contract. That initiative actually launched this quarter.)