T-Mobile and Sprint have been locked in a dead-heat race in recent months over who will be the nation's third-largest carrier. Now, it appears T-Mobile has officially pulled ahead, unseating Sprint as the nation's third-biggest cell service provider.
Last month, T-Mobile said it had 58.9 million subscribers — thanks to gains spurred by its Uncarrier promotions, which offer features such as rollover data, free calls to Canada and Mexico and free international roaming.
Meanwhile, Sprint on Tuesday said it had added 675,000 subscribers in the last quarter — but it wasn't enough to keep T-Mobile at bay. The carrier ended June with 56.8 million subscribers, more than 2 million behind T-Mobile.
Sprint chairman Masayoshi Son told investors Tuesday that although he'd "lost confidence" in Sprint for a time after it failed to acquire T-Mobile a year ago, the company's recent gains represented a turnaround under chief executive Marcelo Claure.
"I am much more confident about Sprint," said Son, a Japanese businessman who also tried to tamp down any speculation that he may be looking to sell off the company just two years after he swooped in to buy the firm.
Still, Sprint faces some big challenges ahead: It doesn't have a lot of money to spend, and analysts say it must upgrade its network significantly to compete. With T-Mobile pulling ahead into third place, the pressure is only growing.
This marks a tipping point for the industry, one that T-Mobile is bound to use to its marketing advantage but will also change how investors, regulators and other businesses view the two competitors. In the same way the moment negatively affects Sprint, it could have long-term ramifications for T-Mobile on everything from how much it's able to grow its network in the future to what kinds of commercial partnerships it strikes.