T-Mobile US ups guidance as subs top 100m

Thanks primarily to the addition of Sprint, the self-styled Uncarrier has turned in a particularly strong set of third quarter results.

However, it was net additions of 2.04 million customers – including 689,000 postpaid phone subscribers – that really stole the show, pushing T-Mobile US above the 100 million customer mark for the first time.

“There is no doubt that we’re the growth leader in wireless,” said T-Mobile US CEO Mike Sievert, in a statement.

The operator ended September with 100.4 million customers in total, to be precise; 65.8 million of them are highly-prized postpaid phone customers. The rest of its base is comprised of 20.6 million prepaid users, and 13.9 million ‘other’ postpaid customers, which includes mobile broadband dongles and the like. Postpaid phone churn was broadly flat year-on-year at 0.9 percent, while prepaid churn fell to 2.9 percent from 4 percent.

12 months earlier, before the Sprint deal closed, T-Mobile had 66.5 million customers in total, which included 39.3 million postpaid phone customers and 20.8 million prepaid customers.

“Last quarter T-Mobile overtook AT&T to become number two in US wireless and today we announced our highest ever postpaid net adds,” Sievert said.

Unsurprisingly, the addition of Sprint has also bolstered T-Mobile on the financial side of things.

Its third-quarter topline jumped to $19.3 billion from $11.1 billion a year earlier. Most of that growth came from the prepaid business, where service revenue almost doubled to $10.2 billion from $5.7 billion. Prepaid service revenue was flat year-on-year at $2.4 billion. Meanwhile, operating income jumped to $2.6 billion from $1.5 billion, and net profit came in at $1.3 billion, up 44 percent on Q3 2019.

“Since closing its merger with Sprint seven months ago, T-Mobile has been driving hard on integration including unifying employees and customers under one brand, rapidly improving the Sprint customer experience, and quickly rolling out 2.5-GHz spectrum to build the world’s best 5G network,” said T-Mobile. “Merger synergies are being realised faster than expected and the company expects to deliver more than $1.2 billion of synergies in 2020.”

T-Mobile said 15 percent of Sprint postpaid customer traffic has already been shifted onto the T-Mobile network, and customer migration is underway. And thanks partly to that aforementioned 2.5-GHz spectrum, its 5G network now covers 270 million people.

The strong showing prompted T-Mobile to raise its earnings outlook for the second half of 2020. It now expects adjusted EBITDA of $13.6-$13.7 billion, up from $12.4-$12.7 billion. Having not previously issued guidance on postpaid phone customer additions, T-Mobile has now said it expects to add 1.3-1.4 million during the second half.

“Customers are choosing T-Mobile in record numbers because we are the only ones that can deliver this combination of value and experience with a true 5G network that is available to customers in every single state,” Sievert said. “We’re consistently and profitably outpacing the competition – and we’re just getting started.”

Indeed, on this kind of performance, T-Mobile will barely notice the $200 million FCC fine it received this week for subsidy fraud.