Following a meeting with the company’s management, the analysts at Wall Street research firm Jefferies said T-Mobile likely will meet or exceed its guidance for customer net additions and earnings.
“With volumes likely down y/y amid supply constraints and less aggressive promotion, we believe the company is well positioned to beat guidance on EBITDA, net adds, or both,” the firm wrote in a note issued to investors this morning.
During the meeting, T-Mobile management “noted the pick-up in porting trends early in the quarter, reflecting the strength of the T-Mobile brand and product offering,” the analysts at Jefferies said. “However, we note that 4Q is traditionally back-end loaded, which may make QTD trends less relevant. Nevertheless, promotional activity appears rational, with T-Mobile offering BOGOs, albeit for a limited time and requiring a new line activation. Sprint appears to be the only carrier promoting the iPhone X, offering $350 for switchers, or with eligible trade. Though iPhone X inventory has been better than anticipated, supply constraints are likely to push some activity into 1Q across the industry.”
The statements from Jefferies largely dovetail with recent comments from T-Mobile’s CFO: Braxton Carter earlier this month said T-Mobile is making big subscriber gains in the fourth quarter. “So far in the fourth quarter our porting rations are up significantly,” Carter said. “We ended the third quarter at a porting ratio of 1.53; we’re now 1.73 on porting ratios to date this quarter. And our porting ratios are up against every carrier, and fairly significantly. That’s pretty good movement just being roughly halfway through the fourth quarter versus what we saw in the third quarter. So the thesis is playing out.”
As noted by Strategy Analytics, T-Mobile added roughly 1.3 million customers in the third quarter, growing its total subscriber base to about 70 million—thus positioning the carrier as the nation’s third largest provider of wireless services. Specifically, T-Mobile added 595,000 net postpaid subscribers during the third quarter, falling short of the 646,000 new customers expected by Wells Fargo Securities, but its overall net additions of 1.3 million during the period marked its 18th straight quarter of more than 1 million net additions.
In announcing its third-quarter results, T-Mobile narrowed its guidance range for postpaid net customer additions for the year, raising it to a range of 3.3 million to 3.6 million, up from prior guidance of 3 million to 3.6 million.