T-Mobile continues to rack up customers
As T-Mobile waits to hear whether it’ll be able to consummate its marriage with Sprint, the company is still racking up new customers. T-Mobile also beat analysts’ expectations for revenue and profit when it reported quarterly earnings Thursday.
The third-largest U.S. wireless carrier by subscribers said it added 1 million new postpaid customers, or customers who pay their bills at the end of the month. Such customers are considered valuable in the wireless industry. The figure was in line with estimates from research firm FactSet.
As for the financials, T-Mobile exceeded expectations. The company reported net income of $751 million, up from $640 million a year earlier. Excluding items, T-Mobile earned 87 cents per share, which beat analyst expectations of 83 cents. The company’s revenue also increased to $11.88 billion, from $11.45 billion. This also beat analysts’ average estimates.
T-Mobile’s deal to acquire Sprint has been in a holding pattern for most of the past two years as it awaits a court decision after several states sued to stop the merger. The two companies delivered closing arguments last month. A decision is expected this month.
T-Mobile’s strong growth is in stark contrast to that of Sprint, which has been limping along, losing customers and generating less revenue than analysts had expected. During the fourth quarter, Sprint reported it had 115,000 postpaid phone subscribers.
T-Mobile’s subscriber growth in the fourth quarter is also outpacing that of rivals AT&T and Verizon. Last week, AT&T said it had added 229,000 postpaid mobile phone subscribers during the fourth quarter. Verizon added 790,000 new postpaid phone subscribers in the fourth quarter.
Though T-Mobile says there’s likely to be more competitive pressure from cable providers like Comcast and Charter offering wireless service, it foresees subscriber growth continuing, with an expectation to add 2.6 million to 3.6 million customers for all of 2020. This would likely outpace AT&T and Verizon. T-Mobile added a total of 4.5 million customers for all of 2019.
As for the deal with Sprint, T-Mobile CEO John Legere said he’s confident the judge in New York federal court will approve the merger. When asked on the call with investors whether T-Mobile and Sprint might consider a spectrum-sharing arrangement if the deal were to fall through, Legere said he’d make two points: “One is the deal will be approved. Point No. 2: The deal will be approved.”
That said, he conceded that if by some chance the deal falls apart, there are a “myriad of things that Sprint and [T-Mobile] could consider doing” to get some of the benefits they’d gain if they merged. But he added confidently, “The deal will be approved.”
T-Mobile execs also teased another Un-carrier announcement that it expects to make in the coming weeks. Legere didn’t offer details but said an announcement was coming this quarter.