By Samrhitha A
(Reuters) -T-Mobile US topped Wall Street expectations for quarterly wireless subscriber additions on Thursday, as cost-conscious customers flocked to its cheaper plans and superior 5G services in a highly competitive market.
The U.S. wireless carrier has been taking the lion’s share of subscribers in the last three quarters, thanks to its discounted bundles and edge over rivals in 5G after its $23 billion buyout of Sprint in 2020.
It added 760,000 postpaid phone subscribers – its highest second-quarter additions in eight years. The figure was also higher than additions posted by rivals AT&T and Verizon and beat expectations of 708,800, according to Visible Alpha.
But second-quarter revenue fell 2.6%, to $19.20 billion, slightly missing estimates of $19.31 billion, according to Refinitiv data. T-Mobile shares fell 1% in extended trading.
“In a highly saturated market, T-Mobile has continued to deliver growth for both postpaid and prepaid customers,” said Third Bridge analyst Jamie Lumley.
“However, the drop in momentum year-over-year may be a sign that the power of its aggressive pricing strategy is starting to wane as the competition looks to stabilize the market.”
The company raised its full-year forecast for wireless subscriber growth and now expects wireless subscriber net additions between 5.6 million and 5.9 million, up from its earlier forecast of 5.3 million to 5.7 million.
The carrier saw an influx of customers driven by its “Go5G Plus” and “Phone Freedom” plans, which give customers an alternative to the three-year contracts offered by rival players.
T-Mobile’s churn rate, which refers to the percentage of customers who stopped using the company’s services, was better than its rivals at 0.77%. By contrast, Verizon reported a churn of 0.83% for monthly phone subscribers, while AT&T’s came in at 0.79%.
Excluding items, the company earned $1.86 per share, beating analysts’ estimate of $1.69 per share.
Verizon on Tuesday beat estimates for quarterly profit on the back of lower costs, while AT&T expanded its cost-cutting plan by $2 billion on Wednesday, after topping estimates for quarterly free cash flow.
(Reporting by Samrhitha Arunasalam in Bengaluru; Editing by Pooja Desai)
