After overcoming years of uncertainty and narrowly avoiding an all-but-completed buy-out, wireless carrier T-Mobile U.S. (TMUS) - Get Report is one of seven companies being added to the NASDAQ 100 Index for 2016. This list is comprised of the country's biggest non-financial publicly traded companies.

The benefit of being in the NASDAQ 100 is largely symbolic, because it means few big changes -- aside from some increased buying activity due to being a part of an index fund like the Powershares QQQ Trust. Joining the NASDAQ 100 does, however, provide further proof that T-Mobile is heading in the right direction in the highly competitive -- and lucrative -- mobile phone industry.

TERP

data by

YCharts

The turnaround for T-Mobile has been especially impressive, considering where the company was just a few years ago. In 2011, the company hemorrhaged customers to competitors that attracted new, exclusive phones that T-Mobile wasn't interested in. AT&T was ready to buy T-Mobile U.S. from its German parent company for $39 billion, but that deal was shelved after being opposed by federal regulators.

A New T-Mobile

After the buy-out attempt failed, T-Mobile could have been dead in the water with its declining market share. At the time, the company was the fourth-biggest cell phone provider in terms of customers, with just 11% of the market in early 2011.

While AT&T's acquisition of T-Mobile was a high-profile failed to anti-trust issues, T-Mobile was free to merge with small-time player MetroPCS, which was the fifth-largest wireless provider with just three percent of the market. The 2012 merger brought the two companies together to compete against industry leaders Verizon, Sprint and AT&T.

As good as the merger was, it was the bold decision to completely reinvent T-Mobile's subscription structure that allowed the company to succeed. Wireless providers love locking in customers to multi-year contracts, which are highly lucrative despite frustrating those who would appreciate some flexibility. T-Mobile's previous business model was based on these contracts, and it couldn't compete against the others. With this in mind, the company ditched convoluted contracts and offered simple month-by-month prices.

This no-contract route worked out well with consumers, as T-Mobile now has the lowest churn rate and the most loyal customers out of any of the major providers. T-Mobile also attracts the highest amount of defecting customers from competing providers. This is partly due to an aggressive push by T-Mobile to compensate customers for any fees they might need to pay by breaking long-term contracts.

Growth Isn't Free

While T-Mobile's flexible plans are not as profitable as long-term contracts from rival companies, T-Mobile is growing steadily and more than holding its own in the industry. For ten quarters in a row, the company has had a net gain of at least 1 million subscribers. The high-margin company phones sold are also a big win for T-Mobile, as the third-quarter 2015 additions were well above its larger competitors.

While T-Mobile's growth in customers is the gold standard amongst mobile providers, these new customers come at a cost. In the latest quarterly report, T-Mobile missed badly on earnings-per-share (EPS), with 15 cents per share reported versus expectations of 31 cents.

"Subscriber growth is the most important metric for T-Mobile but they need to show profit growth," said analyst Walt Piecyk.

Despite the missed earnings, T-Mobile raised projections on its customer growth.

T-Mobile has come a long way, and its future is looking good. The company might not generate as much money as investors hope due to the price of its aggressive customer acquisition strategy, but this approach is a good long-term plan for the scrappy mobile provider. The company's entry onto the NASDAQ 100 doesn't change much, aside from reaffirming the company's impressive turnaround.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.