T-Mobile USA is poised for a resurgence, some analysts said this week.
Canaccord Genuity analysts Greg Miller and Eric Chu cited T-Mobile's "renewed advertising campaign and a major network upgrade" as signs that the nation's fourth-largest wireless operator will reemerge as a more viable competitor and possibly recover lost market share.
The Bellevue, Wash.-based wireless provider – and its parent company Deutsche Telekom – suffered a huge blow when AT&T gave up on its plans to acquire T-Mobile USA, and the company has continued to see its postpaid subscribers defect to rivals. Still, Canaccord Genuity analysts say they are "far from writing the company off for dead."
The analysts spent a few days on the road with Deutsche Telekom's management, and they obviously were impressed with what management had to say. Canaccord Genuity said T-Mobile USA has a "well-thought-out campaign" for a comeback to the good old days a few years ago when it was increasing its market share.
"With its network modernization plan in the U.S., the company will be in a far better position to improve its network coverage and in-building penetration, even without the benefit of low-band spectrum," Miller and Chu wrote. "With the spectrum and the cash that was received from AT&T as a condition of the deal break-up, the company remains in the position to launch at least a minimal LTE footprint and can fund its development from cash from operations in the U.S."
T-Mobile USA has been restructuring its operations in a self-proclaimed effort to compete better and return to growth. The company in March revealed plans to consolidate call centers from 24 to 17 facilities and cut 1,900 jobs. Nine hundred more job cuts were announced last month, though T-Mobile said it was moving swiftly to create 550 jobs, mostly in the Puget Sound area.
To turn itself around, T-Mobile USA is partly counting on a $4 billion network modernization and migration to 4G LTE. Its plans have gotten the attention of Wall Street; although T-Mobile USA lost 802,000 subscribers on contract in the fourth quarter, a financial firm opined earlier this year that T-Mobile is poised for a revitalization.