There's been a battle raging between Sprint (NYSE:S) and T-Mobile (NASDAQ:TMUS) for the past few years. Sprint has been fighting to win back customers who've left the carrier, while T-Mobile has been on a customer acquisition rampage, adding more than 1 million net customers each quarter for the past 10 consecutive quarters.
Those additions, and Sprint's loss of customers over the past few years, have made T-Mobile the third-largest wireless carrier by subscriber numbers, surpassing Sprint's subscriber count by about two million.
But while T-Mobile has used its Un-carrier image, low prices, free perks, and straightforward plans to gain customers, the carrier has let its guard down on one major front -- its network performance. The latest RootMetrics data show that Sprint's network easily beats T-Mobile's, and that the two will continue battling for third place for quite some time.
How Sprint and T-Mobile stacked up
RootMetrics' data -- which combines more than 6 million cellular tests from across the U.S. -- unsurprisingly shows that Sprint and T-Mobile lag behind Verizon Communications (NYSE: VZ) and AT&T's (NYSE: T) networks.
But Sprint and T-Mobile are making big strides. RootMetrics noted that Sprint made "strong improvements" to its data reliability and network speeds, just as it did in the second half of 2014. The report also mentioned that Sprint surpassed the 97% "threshold of excellence" for users' ability to connect to the network in a total of 106 markets, and met the same standard in 119 markets for its ability to maintain those connections. Sprint was also able to match Verizon and AT&T's call performance.
T-Mobile made some big gains as well. The Un-carrier continued to improve network speeds in metro areas, outperforming all other carriers -- besides Verizon -- in average speed tests in most markets.
The carrier also improved network reliability and call performance over its ratings from last year. T-Mobile surpassed the 97% "threshold of excellence" for network connectivity in 62 markets, and the same percentage for the ability to maintain connections in 111 markets.
Why all of this matters
No one likes a poor network connection, and according to data from Consumer Intelligence Research Partners, Sprint and T-Mobile customers really don't like poor connections. In fact, customers from both carriers named network reliability as the chief reason why they'd consider leaving to go to another carrier.
That's why the improvements Sprint and T-Mobile have made are so important, and why both companies need to keep them coming. This year, T-Mobile plans to spend about $4.7 billion to help improve its network, and Sprint is expected to spend the same amount on average each year for the next three years.
That may sound like a lot of money, but it hardly measures up to AT&T and Verizon's spending -- which will amount to about $18 billion each this year.
So while T-Mobile and Sprint battle against each other for subscriber numbers and network quality, it's likely that Verizon and AT&T will continue solidifying their network dominance and maintaining their leads. If there's any hope for T-Mobile and Sprint to catch up, it'll be in adding new customers, eventually raising plan prices, and then using that money to build out more robust networks.
I think T-Mobile's ability to add customers in droves will eventually give it the upper hand -- including in network quality -- against Sprint, but that may take a while to fully materialize. T-Mobile will have to switch gears from focusing on customer acquisition to more reliable cellular connectivity. And even if it does, you can bet that Verizon and AT&T won't be sitting around waiting for T-Mobile to catch up.
Chris Neiger has no position in any stocks mentioned. The Motley Fool recommends Verizon Communications. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.