T-Mobile USA reports subscriber growth as Sprint takeover rumours gather momentum

US operator T-Mobile has claimed to have taken “virtually all of the industry phone growth” in 1Q14 winning market share from its competitors in the process, reporting total net subscriber additions of 2.4 million.  However, the operator recorded a $154m loss in the quarter, compared to a $106m profit recorded in the same quarter last year.  Meanwhile rumours that rival Sprint is eyeing a takeover of the firm, following its own takeover by Japanese operator Softbank last year, have resurfaced.

The operator reported that total revenues for 1Q14 increased by 47 per cent year on year, principally due to the inclusion of MetroPCS results in the period, following T-Mobile’s acquisition of the operator in May last year. Discounting the impact of MetroPCS, total revenues for the quarter increased 15.3 per cent year on year due to higher equipment sales and growth in service revenues.

Total smartphone sales were a record 6.9 million units in the quarter, said T-Mobile; equivalent to 92 per cent of total units sold. The operator said that 81 per cent of its subscriber base now uses smartphones, up from 79 per cent at the end of the 4Q13.

Despite the upturn in subscriber numbers, the operator’s adjusted EBITDA stood at $1.1bn, down 12.2 per cent since 4Q13, which it blamed on the impact of a sharp acceleration in customer growth (and related acquisition costs). It also reported that postpaid ARPU stood at $50.01, down 1.4 per cent since the previous quarter. However, T-Mobile insisted that its fourth consecutive quarter with over one million total net additions makes it the country’s fastest growing mobile operator.

“A year ago I promised that we would bring change to what I called this arrogant US wireless industry. We are delivering on that promise and our results reflect the growing customer revolution that we’ve ignited,” said John Legere, President and CEO of T-Mobile.

“We are now approaching 50 million customers, added 2.4 million net new customers in the first quarter alone, and posted our fourth quarter of consecutive service revenue growth, while once again adding more net new postpaid customers than the rest of the industry combined!”

Meanwhile Bloomberg has cited unnamed sources close to the carrier in a report that rival operator Sprint is planning to make a bid to acquire T-Mobile USA in JUne or July this year. The news agency said the operator met with banks last month to make financial arrangements for its offer.

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