T-Mobile surprises market with profit hike

27 April 2016 |


T-Mobile announced better-than-expected results today, boosted by new price plans and video-streaming products.

T-Mobile USA declared unexpectedly good results today. Revenue jumped 10.6 % to $8.6 billion. Wall Street analysts expected revenue of $8.43 billion. However, the company reported net income of $479 million, 56 cents per share, for the first quarter, compared with a loss of $63 million, or 9 cents per share at the same time last year.

It reported net income of $479 million, 56 cents per share, for the first quarter, compared with a loss of $63 million, or 9 cents per share, a year earlier. In terms of free cash flow for 2016, investors are looking at sums between $1.5 billion to $2 billion.

T-Mobile is slowly gaining market share, which is good news for investors since it has been in a price war with rivals Verizon Communications Inc, AT&T Inc and Sprint Corp. It is also rolling out a number of consumer offers such as its free video Binge On, data rollover plans and numerous social media marketing campaigns.

The company said it has added 2.2 million customers in the quarter ended March 31, surpassing the analyst’s estimate of 1.72 million, according to Thomson Reuters.

T-Mobile now expects to add 3.2 million to 3.6 million postpaid customers (on a net basis) this year compared with a previous forecast of 2.4 million to 3.4 million.

Churn was stated to be 1.33 percent in the quarter, up slightly from 1.3 percent last year. This was put down to aggressive competition from Sprint. 

To increase network capacity, T-Mobile has filed to participate in the U.S. government's low-frequency spectrum auction. It has a war chest of $10 billion for the auction, which it expects to win.