T-Mobile (NASDAQ:TMUS) has been the most aggressive of the four major wireless carriers. Under outspoken CEO John Legere, the company has slashed prices, eliminated device subsidies, simplified pricing, and gotten rid of overages.
That approach has led the "uncarrier" to gain 8.3 million customers in 2014, with 2.1 million being added in the fourth quarter alone, according to the company's preliminary year-end financial results.
"While my competitors are hiding behind less valuable connected device subscriber additions and managing profit expectations to the downside, T-Mobile delivered over 2.1 million customers in Q4, while managing the balance between growth and profitability," Legere said.
T-Mobile had a spectacular year, but its overall growth and Legere's plan to pass Sprint (NYSE:S) to become the third biggest wireless carrier have been hampered by its network. Though Legere has been investing heavily in improving it, T-Mobile's network has consistently lagged behind industry leaders AT&T (NYSE:T) and Verizon (NYSE:VZ).
That weakness has kept customers from leaving AT&T and Verizon for T-Mobile's better pricing. In many ways, it's the biggest thing holding the company back and stopping people from fleeing the more expensive carriers en masse.
The new Mobile Network Performance Review from RootMetrics shows that T-Mobile gained some ground on its rivals. The survey, which covers the second half of 2014, still ranks Legere's company last in overall performance, and while "last place" never sounds good, the results are encouraging for T-Mobile.
First is not much better than worst
"While Verizon and AT&T top the charts, all networks are getting better," wrote survey author Patrick Linder. "We saw improvements across the board in data speed and data reliability, which are fast becoming keys to everyday mobile experience."
Linder also specifically noted that T-Mobile (as well as Sprint) showed big improvement over previous years.
In fact, the gap between the top company (Verizon) and the bottom company (T-Mobile) was much smaller than it was on the survey for the same period last year. T-Mobile's current score would have topped the survey for the second half of 2013, as you can see from the new chart above and last year's below.
"Although T-Mobile finished lower in our national results, it recorded the third most awards at the metro level and remained ahead of Sprint at this level of our testing," Linder wrote. "The upgrades from these two networks are clearly starting to take hold and are impacting performance, in particular, at the metro level. In short, performance is trending in a positive direction, and consumers are benefiting from the changes we've seen."
Maybe better than it looks
While T-Mobile was last overall, it finished ahead of Sprint in a number of categories, including the speed index and data performance categories at the national level. Linder also wrote that the results suggested that some of T-Mobile's weaknesses could be temporary.
"T-Mobile's last place finish in our Overall RootScore results was in part driven by a slip in call performance ranking," according to the study. "T-Mobile has been busy with network upgrades, though, and this drop in call performance could be a transitory issue."
The T-Mobile network has holes
The improving T-Mobile network performs well in cities but is not as strong in less-populated areas. Linder pointed out that this may not matter for people who live in the highly populated areas where the company performs strongly.
"T-Mobile is comparably very fast and a solid option to consider in most major cities," he wrote. "If you primarily use your phone within an urban environment, T-Mobile remains a solid choice."
The RootScore results are weighted to favor urban areas, which does help T-Mobile, but the company "lacks the broad coverage to excel in our National RootScore Awards," he wrote.
Linder does expect T-Mobile's continued investment in its network to pay off.
"T-Mobile recently launched its Wideband LTE service. This upgrade was made available near the end of our testing cycle, but we will be keeping a close eye on results in 2015 to see what type of impact it might make," Linder wrote.
A reasonable choice
In 2013, T-Mobile was the fourth-rated wireless network. At that time it was vastly inferior to AT&T and Verizon. Now, if you live in a city and don't travel much to lesser-populated areas, the "uncarrier" equals or betters its rivals.
Yes, T-Mobile is still in last place, but in much of the country it's really a four-way tie for first. That's a huge improvement in a year and shows that Legere's expensive efforts to build his company's network are paying off.
T-Mobile is already a viable choice for many that looks to be its on its way to being a viable, low-cast carrier no matter where you live.