(Reuters) – T-Mobile US Inc (TMUS.O) on Wednesday said it added far more wireless subscribers than Wall Street had expected, as the third-largest U.S. wireless carrier invests in its network while awaiting regulatory approval to buy rival Sprint Corp (S.N).
A T-Mobile logo is seen on the storefront door of a store in Manhattan, New York, U.S., April 30, 2018. REUTERS/Shannon Stapleton
T-Mobile Chief Executive John Legere said in an interview he felt confident regulators will approve the current merger structure without having to divest parts of the business.
The combined T-Mobile and Sprint would be able to better compete against larger rivals Verizon Communications Inc (VZ.N) and AT&T Inc (T.N), and combine resources to build the next-generation wireless network, or 5G.
Legere, in a call to discuss quarterly results with analysts, said the merger is critical to 5G plans and for increasing industry competition, adding that the pending deal “has been very well received.”The Bellevue, Washington-based company said it added 686,000 wireless subscribers during the second quarter, compared with 786,000 added in the previous year. Analysts had expected T-Mobile to add 467,000 subscribers, according to research firm FactSet. Shares of T-Mobile rose 1.5 percent to $60.25 in extended trading on Wednesday. T-Mobile’s revenue rose to $10.57 billion from $10.2 billion a year earlier, shy of Wall Street’s estimate of $10.66 billion, according to Thomson Reuters I/B/E/S.
Chief Financial Officer Braxton Carter said capital expenditures for the year would be at the high end of its $4.9 billion to $5.3 billion forecast range, as the company works to install its spectrum for 5G.Net income for the quarter rose 35 percent to $782 million, or 92 cents per share, from $581 million, or 67 cents per share, a year ago.
Phone subscriber churn, or the rate of customer defections, was 0.95 percent during the quarter, down from 1.1 percent last year.
The company’s average revenue per phone subscriber was $46.52 in the second quarter, down 1.2 percent from the year-ago quarter, due to customers moving to tax inclusive plans. T-Mobile said on Monday that Finland’s Nokia (NOKIA.HE) would supply it with network equipment for 5G in a $3.5 billion deal, the world’s largest 5G deal so far.
Reporting by Sheila Dang; Editing by Phil Berlowitz and Bill Berkrot