T-Mobile Again Leads Industry on Postpaid Phone Adds
T-Mobile remains at least two years ahead of its competition on the deployment of spectrum for 5G, CEO Mike Seivert told analysts Wednesday as the carrier announced Q3 results. T-Mobile said it added 850,000 postpaid smartphones in the quarter, with churn of 0.87%. The carrier also announced it now covers 300 million POPs with dedicated mid-band 5G, two months ahead of its target.
“I know it may get confusing with others celebrating their C-band deployments,” Sievert said. Despite those deployments by AT&T and Verizon, “T-Mobile's nationwide median speeds were double the next competitor's speeds in September,” he said. “Our mid-band 5G square mile coverage is also double the next closest competitor, meaning others still have a lot of wood to chop beyond just population dense pockets to ever reach the expansive geography where T-Mobile is today,” he said.
T-Mobile has more spectrum dedicated to 5G than the other major carriers, and that's before it deploys C-band or 3.45 GHz spectrum, the 2.5 GHz licenses bought in a recent auction or the rearming of its AWS licenses, Sievert said. “We started the 5G era two years ahead of the competition, and today we remain two or more years ahead,” he said.
T-Mobile is winning across markets, Seivert said. “Prime network seekers in the top 100 markets increasingly recognize that T-Mobile offers the best combination of network coverage and capacity to meet their needs” and for the first time T-Mobile had the highest share of switchers in smaller and rural markets in the quarter, he said.
T-Mobile’s fixed-wireless broadband service now has 4.2 million customers, T-Mobile said. The company markets the service to about 50 million homes, Sievert said. That’s “a dynamic number and it changes based on penetration of given neighborhoods,” he said. He said T-Mobile is “conducting all kinds of experiments” in fiber but declined to comment on potential partnerships. “We are interested in whether or not there are techniques that are capital-efficient that could extend the capacity and competitiveness of wireless … and we've not yet cracked the code on that,” he said. “Fiber is a technology for the decades and that's not lost on us,” he said.
Asked about T-Mobile’s push in rural and small markets, Jon Freier, president-consumer group, said the company’s definition includes 40% of the U.S. “When you think about a lot of the places that we're playing, we're bringing the only 5G network into town,” he said. T-Mobile so far has been active in 70% of those markets, he said.
T-Mobile reported service revenues of $15.9 billion, up 4% year over year, and postpaid service revenues of $12.3 billion, up 6%. Net income of $2.1 billion was up 322% year over year. The company reported adjusted free cash flow of $4 billion and said it repurchased $2.7 billion of common stock in the quarter. T-Mobile didn’t comment on its agreement with Dish Network, nor were executives asked about it.
“Postpaid phone net adds came in at 850K, ~9% above consensus, mainly driven by higher gross additions” and “service revenue exceeded expectations,” said KeyBanc’s Brandon Nispel: “Results show [T-Mobile’s] market share gains are not slowing.”
“With momentum in mobility, and with so much opportunity in mobility still ahead, why do so many observers, and sometimes even T-Mobile itself, spend so much time focused on anything else?” asked MoffettNathanson’s Craig Moffett. Questions continue about a potential deal with wireline provider Frontier, he said: “There is no strategic merit whatsoever in a combination between T-Mobile and Frontier. None. Nada.”