T-Mobile posted financials and customer metrics that largely exceeded Wall Street expectations. And, for the third time this year, the company increased the number of customers it expects to gain over the course of 2018.
Specifically, T-Mobile said it now expects to gain postpaid net customer additions in 2018 of between 3.8 million and 4.1 million. That’s an increase from the 3 million to 3.6 million range it provided in August, the 2.6 million to 3.3 million range it provided in May, and the 2 million to 3 million goal it set in February.
“Q3 was another incredible quarter,” said CEO John Legere on the company’s quarterly earnings conference call with analysts.
Interestingly, Legere also acknowledged that T-Mobile continues to grow despite facing two new major brands on the wireless front. Comcast, the nation’s largest cable company, has been selling wireless services through its Xfinity Mobile MVNO service since last year, and Charter recently launch its own Spectrum Mobile MVNO.
“Wireless in general is a very competitive market,” Legere said, describing the market in the third quarter as “steady.”
“The cable guys are definitely here,” Legere noted, but said that Comcast’s Xfinity Mobile growth is “coming almost exclusively from Verizon.”
“We’re not feeling that major pressure from them,” Legere said of Comcast. “It's too early to tell for Charter."
Continued Legere: “These are very deep pockets,” he said of the cable companies. “Now you've got really big companies that seem to be willing to spend tremendous amounts of money … that's not really scalable, and they should have just handed that money to Verizon."
Indeed, Comcast reported in the third quarter that it now counts almost 1 million Xfinity Mobile customer lines, but Comcast also reported a loss of $178 million from the service in the quarter.
Here are some other noteworthy topics covered by T-Mobile in its third-quarter report:
Subscribers: T-Mobile reported branded postpaid phone net customer additions of 774,000 in the third quarter, up from 686,000 in Q2 2018 and 595,000 in Q3 2017. T-Mobile said branded postpaid other net customer additions were 305,000 in Q3 2018, compared to 331,000 in Q2 2018 and 222,000 in Q3 2017. “The sequential decrease was due to lower gross customer additions from wearables,” the company said.
T-Mobile said branded prepaid net customer additions were 35,000 in Q3 2018, compared to 91,000 in Q2 2018 and 226,000 in Q3 2017. T-Mobile’s Mike Sievert said that AT&T’s Cricket was particularly strong in the third quarter, while T-Mobile focused its attention on the postpaid side of the market.
Layer3: T-Mobile said it would not launch a mobile TV service until next year. Click here for that story.
Sprint merger: T-Mobile executives reiterated their belief that the company’s merger agreement with Sprint would be approved by the first half of next year. Legere said that the transaction has received approvals from more than half of the nation’s state public utility commissions.
Spectrum: “We intend to participate in the upcoming mmwave spectrum auctions,” said T-Mobile’s Neville Ray. He also said that the nation’s satellite providers need to provide more C Band spectrum.
“We’d like to see a lot more spectrum come through than is currently being proposed by the incumbent holders on that spectrum,” Ray said of the C Band. “We think it's critical that more mid-band spectrum is brought to the U.S. so that we've got a good, strong roadmap for future 5G services."
5G: T-Mobile said it is building out 5G in 6 of the top 10 markets, including New York and Los Angeles, and hundreds of cities across the U.S. in 2018. “This network will be ready for the introduction of the first 5G smartphones in 2019. We plan on the delivery of a nationwide 5G network in 2020,” the company said.
Financials: T-Mobile said service revenues were a record-high $8.07 billion in the third quarter, up 1.7% from the second quarter of this year.
Capex: T-Mobile said its cash purchases of property and equipment were $1.36 billion in the third quarter, down slightly from the $1.63 billion the operator spent in the second quarter.