Analyst: T-Mobile likely to dish on margins, spectrum and LTE Unlicensed during Q4 earnings

T-Mobile US (NYSE:TMUS) will report its full fourth-quarter earnings tomorrow and since the carrier has already detailed its subscriber growth, the focus is likely going to be on its margins and future technology deployments, according to a financial analyst.

In a research note, Wells Fargo analyst Jennifer Fritzsche wrote that T-Mobiles is likely going to report revenue of $7.92 billion and adjusted EBITDA of $1.65 billion in the fourth quarter. She wrote that T-Mobile will likely report service revenue of $5.88 billion (which would be up nearly 14 percent from the year-ago period) and equipment revenue of $1.93 billion (which would be up 22 percent).

On Jan. 7, T-Mobile said it added 2.1 million net wireless customers in the fourth quarter, including 1.3 million branded postpaid net subscriber additions (of which 1 million were phone customers). For all of 2014, T-Mobile is projecting that it added 8.3 million total customers, which would represent an 89 percent jump from 2013.

"We expect a major focus on margins going forward given the significant growth and heavy promotional activity TMUS experienced in 2014," Fritzsche wrote, adding that she expects the carrier to report estimate EBITDA service margins of 28 percent in the fourth quarter.

"We will look for an update on TMUS's spectrum portfolio following the AWS-3 auction in which it spent $1.8B, including the deployment of its 700 MHz A Block spectrum, thoughts on the broadcast incentive auction and updates on its LTE Unlicensed (LTE-U) initiatives," she added. "We also expect TMUS to provide color on the decommissioning of MetroPCS and guidance on cost synergies in 2015."

T-Mobile has said it is focused on acquiring and deploying low-band spectrum, and is likely to be a major player in the 600 MHz incentive auction currently scheduled to start in early 2016. T-Mobile has also been a major proponent of License Assisted Access (LAA) or LTE-Unlicensed (LTE-U), and might even launch the service in the 5 GHz band this year.

During its earnings call, T-Mobile has said that "scripted remarks will be kept to a minimum in order to provide more time for free-flowing dialogue with analysts, investors, media and consumers." The call is expected to last an hour and a half, about a half hour longer than most typical quarterly earnings conference calls.

"Participants will have multiple ways to submit questions including via phone and Twitter (@TMobileIR using #TMUSearnings)," T-Mobile said last week. "This quarter, T-Mobile will also take questions via SMS and respond to some of them on the call (send a text message to 313131, enter the keyword TMUSQA followed by a space)."

That unconventional style was on display in comments T-Mobile CEO John Legere made to Mashable about his near-constant presence on Twitter and why other CEOs do not emulate that style.

"Frankly, a lot of CEOs are just spoiled, and they would never do this," he said. "It's a lot easier to sit in meetings all day than face your customers every day, listen to them and tackle the big issues that are bothering them. If you are going to engage here, you have to be ready to take the feedback seriously and then act. Execs at big companies (like, oh, say AT&T and Verizon) are so used to ignoring their customers they don't even know how to start listening to them. I prioritize my time differently."

For more:
- see this Mashable article

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