T-Mobile again reported strong second-quarter results, but abruptly postponed its earnings call planned for Thursday as reports surfaced of last-minute delays at the U.S. Justice Department, which had appeared poised to announce a deal for the $26.5 billion merger with Sprint.
Headlines have been flying this week, and it was largely expected the DOJ would formally greenlight the Sprint/T-Mobile tie up today when the nation’s third-largest wireless provider released quarterly earnings. Along with the earnings call, that announcement appears to be on hold due to some states' opposition to the deal.
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The Wall Street Journal, citing unnamed sources, reported the DOJ is negotiating to get state officials on board with a planned settlement that would involve divesting spectrum and the Boost Mobile prepaid business to Dish Network to help set up a fourth national wireless competitor, allowing Sprint and T-Mobile to merge.
A group of state attorneys general sued to block the merger on antitrust ground earlier this year, some of whom are involved in the current DOJ discussions, according to the WSJ.
Earlier this month the sates asked to delay the Oct. 7 trial start date, arguing T-Mobile and Sprint didn’t meet stipulated deadlines, including sharing completed terms of the merger.
The DOJ has now said antitrust division chief Makan Delrahim will make a significant merger enforcement action on Friday, with Reuters reporting it will be approval of the Sprint and T-Mobile merger.
T-Mobile has also rescheduled its second-quarter earnings call for Friday.
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Meanwhile, T-Mobile again reported strong second-quarter metrics, adding 710,000 postpaid phone subscribers, a 3% increase from the year ago period. T-Mobile gained 1.1 million total postpaid net subscribers in the period, up 9% year over year. The carrier also tallied 131,000 prepaid additions in the second quarter, up 44% from a year prior. Postpaid phone churn hit a record-low of 0.78%.
Service revenues of $8.4 billion in the second quarter were up 6% and contributed to a 4% year over year increase in total revenues of $11 billion.
Net income climbed 20% from the year ago period to $939 million and adjusted EBITDA of $3.5 billion was up 7%.
Once again, T-Mobile upped its guidance for postpaid net additions, now 3.5 to 4 million, from the prior 3.1 to 3.7 million.
T-Mobile said its 4G LTE service on 600 MHz now covers 156 million people and 1.2 million square miles. The carrier has been aggressively deploying 600 MHz using 5G-ready equipment and has promised a nationwide 5G network next year. The operator has already deployed 5G in parts of six cities using millimeter wave spectrum.
T-Mobile has rescheduled its second-quarter earnings call for Friday, July 26.
Article updated to include DOJ announcement and new T-Mobile earnings call date.