T-Mobile reported fourth quarter 2021 results featuring 10 percent growth in earnings and 30 percent growth of free cash flow. Net account additions grew 32 percent over 2020 levels.
T-Mobile also claims to be the fastest-growing public company in the home broadband business as well, building to 650,000 accounts in two years. It is fair to note that T-Mobile historically has had zero market share in the home broadband business, so its entry into the market would allow high early growth rates.
T-Mobile has expected to grow home broadband in rural markets, but perhaps a surprise is that “the majority of our customers come from suburban and urban markets,” according to Dow Draper, T-Mobile EVP.
Some might question T-Mobile’s ability to take home broadband share since its network will not match fixed network speeds. But T-Mobile believes “80 percent, 90 percent of the customers are right in the sweet spot of where our product performs,” says Mike Sievert, T-Mobile CEO.
As all internet service providers must plan for, delivered bandwidth will have to increase over time, to ensure that addressable market does not shrink too much. Still, critics believe faster deployment of fiber-to-home and upgrades of the hybrid fiber coax networks will ultimately limit T-Mobile’s addressable market in fixed wireless.
T-Mobile--essentially--may not worry about that. It is a market share attacker and wins simply by gaining in a big new market where it formerly did not compete at all, or was limited in its ability to compete. That essentially is the same argument T-Mobile advances about rural customer market share, enterprise and government accounts as well.
Having set a target of 20 percent share of the mobile government and enterprise segment of the mobile market, T-Mobile reports it is on track to do so by 2025.
Business strategy often is largely shaped by market structure. Large, stable markets where the number-one provider has twice the market share of provider number two; which in turn has twice the share of provider number three, are quite difficult to disrupt.
Markets are harder for challengers to disrupt when demand, supply and core technologies are stable. Highly-regulated industries can see more share change when rules are changed, especially relating to market entry by new firms, or when regulators decide to allow market-changing mergers.
In markets with high saturation, mergers often are the main way share is changed. Competitor mis-steps also can allow more change than otherwise is thought possible. Finally, attacker cleverness and willingness to disrupt the value-price-experience standard can move market share.
Perhaps T-Mobile has benefitted from all of those changes.
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