T-Mobile said it had one of its best quarters for adding enterprise, government and SMB customers as it is leveraging its unlimited plans and specialized sales force.
The carrier added 1.4 million net additions in the first quarter and 773,000 net postpaid phone adds. T-Mobile is projecting postpaid net customer additions of 4.4 million to 4.9 million in 2021.
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T-Mobile CEO Michael Sievert on the company's earnings call spent a good chunk of time talking about the plan for expanding its business accounts. He said:
For businesses, we saw one of our best-ever quarters for phone net adds in Q1. And more importantly, we see increased engagement around how these 5G capabilities available only from T-Mobile in a meaningful way can really benefit their companies. We're bringing the Uncarrier to the business space and breaking down antiquated constructs just like we did for consumers by increasing our specialized sales force and building tailored products for large enterprises and government customers.
Sievert said businesses will gravitate away from pooled data plans and opt for unlimited data. "Carriers are still selling pooled, shared and limited data to enterprise customers," he said.
If successful, business accounts will likely smooth out T-Mobile's net additions in future quarters. Consumer net adds in the first quarter may have been spurred by US stimulus checks from the government. Business sales cycles are longer and net adds will be a lagging indicator.
Michael Katz, executive vice president for T-Mobile for Business said the carrier has been seeing enterprise gains as its 4G network hit parity with Verizon and AT&T. 5G is adding more use cases to T-Mobile's enterprise story. "The funnel is in the best place that it's ever been, both in the public and private sector," said Katz.
Sievert said 5G for businesses is likely to be a partial replacement for Wi-Fi deployments. "When you're thinking about large enterprise, you both have the dynamics of a single enterprise having really large-scale wireless deployments. And honestly, with a lot of those companies, we already have presence and had presence for a long time. Our role has just changed," he said.
The T-Mobile CEO added that enterprises are looking for networking as a service and the carrier can fill that void over time. "Enterprises don't want to be buying and deploying assets," said Sievert.
T-Mobile's plan for enterprise accounts is to land accounts switching from AT&T and Verizon, but Katz indicated the carrier is planning to move up the stack and into edge computing. A partnership with Lumen is expected to bring more edge computing use cases to T-Mobile. "What was important to Lumen and particularly to the customers that they're looking to bring the solution to, is a big distributed, powerful 5G network," said Katz.