T-Mobile is on pace to report around 614,000 net new postpaid handset customers in the first quarter, according to the analysts at Wells Fargo. That’s below the Wall Street research firm’s initial estimate of 678,000 for the period.
As a result, the firm also lowered its estimates for T-Mobile’s first-quarter service revenue to $7.82 billion from $7.86 billion.
“Despite the carriers running several device promotions in Q1, we still think industry switching activity will be relatively muted, with gross adds seasonally slowing after a stronger-than-expected Q4,” the Wells Fargo analysts wrote in a research note issued late last week. “TMUS has had several BOGO (buy one get one free) offers in the market for select Apple, Samsung and LG phones and has noted postpaid porting trends vs. the other carriers improving modestly in Q1.”
However, the firm said it has noted an increase in interest in connected devices like cars and smart watches at T-Mobile. As a result, the Wells Fargo analysts raised their expectations in that space to an estimate of 216,000 postpaid net customer additions in Q2, from an initial estimate of 120,000.
Nonetheless, T-Mobile itself said it continues to expect to gain customers throughout 2018. “In 2018, we expect postpaid net customer additions between 2.0 and 3.0 million,” the carrier wrote in its earnings release in February.
Wells Fargo’s reduction in its expectations for T-Mobile is noteworthy considering the firm recently increased its expectations for AT&T. Specifically, Wells Fargo last month said it now expects AT&T to gain 70,000 postpaid phone customers in the first quarter, an improvement from the 150,000 customer it initially expected the carrier to lose.
Despite Wells Fargo’s reduction on T-Mobile, most believe the wireless sector is headed toward an overall finance improvement in the first quarter. For example, the analysts at Deutsche Bank Markets Research recently said they expect the nation’s four biggest wireless network operators will, in aggregate, return to year-over-year service revenue growth in the first quarter of this year.