T-Mobile US used its second-quarter earnings release to declare the title of the No. 2 wireless provider in the U.S., overtaking AT&T in total branded customers for postpaid and prepaid.
In the company’s first quarter since closing the Sprint merger on April 1, the new T-Mobile reported net customer additions of 1,245,000, for a total customer count of 98.3 million. Excluding connected devices, AT&T reported 92.9 million branded postpaid and prepaid customers at the end of the second quarter.
During the company’s earnings conference call on Thursday, T-Mobile CEO Mike Sievert emphasized their achievements during the quarter while dealing with the COVID-19 pandemic and managing the integration of Sprint.
In the 5G race, “T-Mobile is pulling way ahead,” he said. In the past few years, “we’ve heard a lot of competitive banter and marketing speak when it comes to 5G — all talk and most of it is just hot air. AT&T and Verizon don’t want you to see what’s becoming so painfully obvious. T-Mobile is miles ahead of both of them, and we’re quickly pulling away from the pack.”
In addition to having non-standalone (NSA) 5G, T-Mobile earlier this week launched nationwide standalone 5G and its 5G network now reaches more than 250 million people and 1.3 million square miles. The geographic 5G coverage is roughly double that of AT&T and exponentially larger than Verizon’s, he said.
T-Mobile for years suffered from lackluster coverage compared with Verizon and AT&T, which in the early days had access to more low-band spectrum than T-Mobile and Sprint. Today, T-Mobile controls about 319 MHz of combined low and mid-band spectrum on average nationwide, which is nearly double that of AT&T and nearly three times that of Verizon.
Sievert said he likes that T-Mobile is a pure play wireless company with the highest capacity in the industry. “Wireless is where things are going,” he said. “The internet is going mobile. As a mobile pure play, that’s a great place to be.”
Lighting up 2.5 GHz
T-Mobile is already lighting up the 2.5 GHz spectrum it gained through Sprint in major metro areas like New York, Houston, Los Angeles, Dallas, Washington, D.C., and Atlanta. By the end of the year, customers will find mid-band 5G in thousands of cities and towns across the country, he said. Currently, they’re seeing average speeds north of 300 Mbps.
The network team is working in overdrive to migrate Sprint postpaid traffic onto T-Mobile’s network; more than 10% of Sprint traffic is now using the T-Mobile network ahead of the actual customer migration, according to Sievert.
Over 10 million Sprint postpaid customers on average are now using the T-Mobile network every day, he said, adding that the Sprint base historically had limited access to VoLTE and now most of the Sprint postpaid base is enabled on VoLTE, so they’re getting a better voice experience.
Asked about the Metro PCS integration from a few years ago, President of Technology Neville Ray said with Metro PCS, they had to move its CDMA customer base out of their CDMA phones.
With Sprint, some 85% of the Sprint customer base has a phone that's compatible with the T-Mobile network and they’re moving over at a much faster pace. The playbook is similar in how they approach it, but “we’re in a much better place to move faster” because of the handset compatibility, he said.
Here are some other metrics from T-Mobile’s Q2 results:
- Total service revenues increased year-over-year to $13.2 billion, driven by the Sprint merger and continued customer growth. Total service revenues exclude about $1 billion of Boost revenues that are reflected in discontinued operations.
- Net income decreased year-over-year to $110 million and EPS decreased year-over-year to $0.09, primarily due to the Sprint merger and merger-related costs, impacts of COVID-19 and non-cash impairments.
- Free cash flow, excluding gross payments for the settlement of interest rate swaps related to merger financing, increased year-over-year to $1.4 billion.