T-Mobile’s brash, consumer friendly ways continue to resonate with consumers according to the magenta uncarrier’s latest earnings report.
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Customers are also hanging onto T-Mobile’s service longer, with the turnover rate falling to 1.46 percent from 1.64 percent a year ago.
“Our momentum is strong and our incredible customer growth is translating directly into solid financial growth which makes it crystal clear that putting customers first is just good business”, CEO John Legere said in a statement. Sprint has also joined the fray in recent quarters, fueling additional price pressure in the industry. Branded prepaid net additions came in at 595,000, while wholesale net additions were 632,000.
The company said it sold or leased 8.9 million devices in the third quarter, 8.1 million of which were smartphones.
In addition to strong customer growth, T-Mobile delivered outstanding financial results. The increase in revenues was also due to higher equipment sales, due to an increase in volume the equipment revenues increased 20% to $315 million in 2QFY15. On a year-over-year basis, branded postpaid phone ARPU declined 3.7%.
Similarly, the branded postpaid customer per account increased from 2.23 in 2QFY14 to 2.43 in 2QFY15.
T-Mobile’s (TMUS) stock was up 2.9% to 42.55 in premarket trading. The profit miss underscores the high costs associated with competing on price to sustain user growth. Analysts were expecting earnings of 30 cents per share, according to Yahoo Finance, while revenue was seen topping 8.2 billion, according to most analysts. Average monthly revenue per user was $47.99, down from $48.19 in the prior quarter and $49.84 from a year earlier. Year-over-year, the improvement was primarily due to higher net cash provided by operating activities. T-Mo’s LTE covers more than 300 million people, while Wideband LTE – which offers increased bandwidth and capacity – is in 245 markets, with the goal of passing 260 markets by the end of 2015.
“T-Mobile continues to have the best fundamental growth and market share gains”. The company covers nearly 175 million POPs with its Extended Range LTE service and is leading in average download speeds for the 7 quarter in a row.
Cash capital expenditures reflect T-Mobile’s continued investment in the expansion of its 4G LTE network. In the third quarter of 2015, cash capital expenditures were $1.1 billion, down from $1.2 billion in the second quarter of 2015 and flat compared to $1.1 billion in the third quarter of 2014. This is the third time in 2015 that T-Mobile has raised its full-year 2015 guidance for branded postpaid net customer additions.
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The company said it earned $138 million in net income, or 15 cents per share, on revenue of $7.8 billion. It also reported an increase in its service revenues from branded postpaid customers from $7 billion in 1HFY14 to $7.8 billion in 1HFY15.
