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T-Mobile train thunders through Q2

Beautiful railway station with modern red commuter train at suns

T-Mobile US has continued to defy global trends of a slowdown as it reports another quarter of 1 million net adds as consolidation rumours continue to swirl.

Top-line numbers were once again very promising and CEO John Legere was enthusiastic as ever in reeling off the talking points. Over the course of the quarter, the team brought in 1.3 million net additions, 817,000 of which were branded postpaid, service revenues grew 8% year-on-year and total revenues were bolstered by 10%. It’s the 17th consecutive quarter T-Mobile has added more than a million customers. No-one is going to complain about those numbers.

“If you are looking for the big news from Q2, you could simply say that T-Mobile’s business continues to perform at peak levels across the board,” said Legere. “Our incredible customer growth that I am sure the other guys won’t mention next week, combined with an all-time low churn yielded a record quarter for the Ontario.”

And while these look positive for the moment, the momentum doesn’t seem like it will slow any time soon. Following the recent spectrum auction, Legere expects to ‘light up’ the first 600 megahertz site in August. Coverage of 1.2 million square miles is expected by the end of the year as more sites come online, though part of this spectrum will be used for its ‘nationwide’ 5G network, which is expected to be online in 2019/20.

5G might be the hot topic, but T-Mobile seemingly hasn’t forgotten about 4G (thankfully…). Its current 4G network covers 315 million people today, with an additional 321 million targeted by the end of the year. In typical, Legere fashion, a cheeky dig was also needed, as T-Mobile claims the crown for the fastest network for the 14th quarter in a row.

“Amazingly, Verizon fell behind AT&T in terms of download speed. Both Verizon and AT&T are completely choking in the wake of their unlimited launches and have seen significant network slowdowns,” said Legere. “Their networks just can’t take it.”

Success at T-Mobile US is not something which surprise anyone, but one area of curiosity continues to be on the consolidation front. Although we haven’t found anything concrete out after the earnings call, one thing is clear; Legere has an acquisition on his mind. What this looks like, or who it actually is, remains to be seen, but you can guarantee it will be done on T-Mobile terms.

Inorganic growth is all well and good, but it would appear the team are being very cautious not to get involved with any toxic businesses. The mindset here is pretty clear; we don’t care about your dreams and aspirations, we want to know how you are doing now. It does appear that Legere has zero interest in a sinking ship, which might strike out a couple of acquisition rumours.

“I would say we have the same but maybe more opportunities from an inorganic or an expansion standpoint than we had last quarter,” said Legere.

“The noise to action ratio is zero, and all of those things are because we know Cable has a shitty MVNO relationship with Verizon that they want to do something different with. We know that Sprint has a need to do something and we are interested in all of these options, but we are interested in focusing on our business and doing things in a methodical way at our schedule and at our schedule.”

To be completely honest, we haven’t learnt anything new here. T-Mobile US is continuing to smash it, most would have suspected this, and Legere seems to have his eyes lasered on an acquisition of some form. There is still a lot of mystery surrounding any consolidation, but it would be a fair bet to assume there will be some movement over the next couple of months.

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