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T-Mobile is the real reason AT&T and Verizon are expanding into media

Reuters/Kacper Pempel
Workers redecorate a former Era Mobile phone outlet with T-Mobile logo in Warsaw June, 1, 2011. REUTERS/Kacper Pempel/File Photo GLOBAL BUSINESS WEEK AHEAD PACKAGE –…
  • Amy X. Wang
By Amy X. Wang


Published This article is more than 2 years old.

In a word: T-Mobile.

Verizon and AT&T, once kings of the US telecom industry, have suffered serious hits to their wireless businesses of late, disappointing investors with meager subscriber growth in the latest quarter.

Meanwhile, T-Mobile announced its own third-quarter results today (Oct. 24)—and they’re positively glowing. The carrier, likely due to aggressive marketing efforts, added nearly one million branded postpaid subscribers in the last reporting period, more than twice that of its rivals. Postpaid customers, who sign up for services upfront, contribute the most to a wireless provider’s revenue and are thus the best indicator of the company’s health.

T-Mobile’s explosive wireless subscriber growth, and the subsequently dimmer performances of its rivals, explain a lot about those rivals’ recent actions: Verizon made a massive purchase this summer of Yahoo’s core businesses, and AT&T just this weekend announced a $80 billion merger with media company Time Warner.

Though neither AT&T nor Verizon has admitted their stalled subscriber numbers may be caused by T-Mobile’s vigorous snatching-up of market share, both companies are certainly looking elsewhere for profit as a result. Verizon appears to think its acquisition of Yahoo will prove a boon to its online content and advertising businesses; AT&T’s interest in Time Warner, Recode suggests, signals that the wireless company wants to be more than just a “dumb pipe” for content and start controlling some of that content itself.

As for T-Mobile? It’s happily enjoying its reign as America’s fastest-growing wireless carrier—at least judging by the elation in CEO John Legere’s recent tweets.

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