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T-Mobile’s Future Uncertain Despite Growth In Q2 2015

July 31, 2015 - Written By Ricardo Trevizo

T-Mobile is one of the four major carriers in the United States, positioned behind Verizon and AT&T, and ahead of Sprint. Since its foundation in December, 1999, the unCarrier has expanded its reach across the nation to provide a coverage of over 96 percent, and has also been praised as the number one carrier for retail-store customer satisfaction for over four consecutive years. T-Mobile seems to truly cares about its customers and works hard to provide the best possible service, which has led to a major growth during this year’s second quarter. The total revenue that the company earned during Q2 2015 exceeded what analysts at Wall Street had predicted. Due to this unprecedented growth, T-Mobile now holds enough momentum to make it through the whole year without any financial struggles. Unfortunately, this story might not repeat itself in the coming years as analysts have several major doubts about what the future might hold for the company, if it doesn’t diversify itself.

T-Mobile has without a doubt, grown a lot over the past few years, and today this has become apparent after the company reported $8.2 billion in total revenues and a net income of $361 million, which is significantly higher than last quarter and the previous year. But this increase might not be sufficient to hold the unCarrier for the next few years, as Wells Fargo analysts Jennifer Fritzsche, Eric Luebchow and Caleb Stein stated in a recent study, “While it clearly has momentum entering the back half of 2015 (and in our view, perhaps the best CTO in the business), we do have some concerns about the company’s ability to continue to differentiate its service during a period when we are on the cusp of much service differentiation in the wireless market”.

T-Mobile has to act fast if it wants to continue to keep growing at the current pace the company has, as the market is constantly evolving. Wall Street analysts noted that in order to retain this growth, T-Mobile has to diversify its overall business, exploring different areas of the market, such as the Internet of Things or even connected cars. But something that might also help the carrier quite a lot, is to merge with another company such as Comcast to provide a seamless experience between the two companies’ services. But said move is still a mere possibility as the carrier has still half of the year ahead, to either change its strategy or continue to play safe and rely on its current momentum.