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Self-styled ‘uncarrier’ nets 1.14 million new customers, grows revenues by 11%.
T-Mobile US late on Monday raised its full year outlook after reporting yet another quarter of solid customer additions and revenue growth.
The self-styled ‘uncarrier’ added 1.14 million new subscribers in the three months to 31 March. Branded postpaid customers grew by 914,000, of which 798,000 were branded postpaid phone customers. T-Mobile’s prepaid base grew by 386,000, while its wholesale base shrank by 158,000.
The company ended the quarter with 72.6 million customers in total, compared to 65.50 million a year earlier.
While impressive, customer growth was noticeably down on Q1 2016, reflecting intensifying competition in the U.S. mobile market as the likes of AT&T, Verizon and in particular Sprint respond to T-Mobile’s aggressive tactics.
12 months earlier, T-Mobile US added 2.22 million new users, comprised of 1.04 million branded postpaid users, of which some 877,000 were branded postpaid phone users.
Despite the slowing growth, T-Mobile’s quarterly customer additions stand in stark contrast to Verizon, which last week reported a net loss of 307,000 retail postpaid connections, including 298,000 phone customers, during the first quarter.
The company revealed that leading up to its relaunch of unlimited price plans in mid-February, it lost 398,000 postpaid phone users; after the launch, Verizon added 109,000 postpaid phone users.
The strong performance led T-Mobile to raise its full-year customer growth guidance. The operator now expects to add 2.8 million-3.5 million new customers in 2017, an improvement on its previous outlook of 2.4 million-3.4 million.
As well as impressive customer growth, the first quarter also saw T-Mobile spend $8 billion on 31 MHz of 600-MHz spectrum covering 100% of the country, in the recently-concluded incentive auction. The company expects 10 MHz of those frequencies to become available for use in 2017.
"With this purchase, T-Mobile now has significantly more low-band spectrum per customer than any other major provider and nearly TRIPLE the low-band spectrum per postpaid customer compared to Verizon. Overall, this spectrum increases our total spectrum portfolio by 39% and sets the stage for continued business momentum," T-Mobile said.
On the financial side, T-Mobile US’s first quarter service revenue jumped 11% year-on-year to $7.33 billion (€6.73 billion), while total revenues came in at $9.61 billion, also up 11% on last year.
Operating expenses increased to $8.58 billion from $7.50 billion, while operating income slipped to $1.04 billion from $1.17 billion. However, net income tax benefits of $270 million resulted in T-Mobile’s net profit jumping 46% year-on-year to $698 million.
"We’ve been beating up on the competition for over four years now while making wireless better for consumers," said T-Mobile US CEO John Legere, in a statement on Monday. "Q1 was no different with T-Mobile again producing the best customer and financial growth in the industry. Add to that our recent success in the 600-MHz spectrum auction and it’s clear we’re just getting started."
