Sometimes when a company performs consistently well, investors become numb to good numbers. Strong results are expected, so when they come in, they don't make major headlines.
That's what has happened with T-Mobile (NASDAQ:TMUS). The company consistently adds at least one million customers each quarter, and it has added more than five million customers each year for the past six years.
The Un-carrier continued that dominance in 2019. It closed the year adding 1.9 million new customers in the fourth quarter, giving it 7 million additions for the year. That's both impressive and ho-hum because the company has been delivering growth on such a consistent basis.
The merger looms large
T-Mobile plans to merge with Sprint (NYSE:S). That deal would put the company on equal footing with its chief rivals AT&T and Verizon when it comes to subscriber counts. That's important when you consider the level of investment required to build a 5G network.
The merger has passed federal hurdles, gaining approval from the Federal Communications Commission (FCC), but a group of state attorneys general still oppose it. That could scuttle the deal, which would be a blow to T-Mobile, but a blown merger will simply slow the company down, not derail its long-term success.
Outgoing CEO John Legere celebrated the company's success in a press release. His remarks were filled with his usual bravado, but they do lay out why the company will succeed with or without a merger.
"7 million net customers have chosen to join the Un-carrier movement in 2019, and they are choosing T-Mobile because we treat them right, we eliminate their pain points, and we are changing the rules of this industry for customers everywhere," he said.
Treating consumers well is actually a novel concept in the wireless space. That has been a competitive advantage for T-Mobile, and it's one that its rivals will have a hard time copying.
One-time monopolies struggle to change in a way to compete when their industries are opened up to more competition. That has been evident in the cable industry, and it's unlikely that AT&T or Verizon will be able to rapidly (or slowly) become customer-first companies.
A foundation for success
T-Mobile isn't a flash in the pan or a novelty. It's a company that has added more than 1 million new customers for 27 straight quarters. That's nearly seven years of steady, strong growth. Merging with Sprint will super-charge that growth and give the company a bigger base to spread out 5G expenses over.
That would be nice for investors, as it's a sort of shortcut to success. In reality, though, while shortcuts are nice, they are not needed. T-Mobile has shown that, given time, it will eventually catch up to its rivals. The company has built a working business model that sets itself up well for long-term success.
The Un-carrier has built a strong bond with its customers by treating them well. That's a pretty good plan that protects the company from pricing pressure or new, low-cost rivals. That should be enough to keep the company as a growing player in the space, even in the unlikely event the merger gets denied.