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T-Mobile US: Sneak Peek into Q3, Subscriber Growth High

Zacks

U.S. national wireless carrier T-Mobile US Inc. TMUS recently allowed us a peek into its third-quarter 2016 earnings report, which is scheduled to release this October. The company claims to witness stronger subscriber addition in the upcoming quarter in compared to its consumer gain reported in the second quarter of 2016.

Reports state that the company has added 753,000 branded postpaid phone customers since Jul 1, 2016, compared to 646,000 customers in the second quarter of 2016. T-MobileUShas also made to reach out to 650,000 prepaid net customers till date for the third quarter of 2016.

T-Mobile US further declared plans of issuing complete estimates for full-year 2016 growth and financials during its third-quarter 2016 report release.

Reasons Driving Subscriber Growth


T-Mobile US believes that its innovative network expansion methodologies have helped drive substantial consumer growth. In order to lure customers from competitors, T-Mobile US has been launching several low-priced service plans through varied promotional and advertising schemes for individual consumers as well as small business entities. In relation to this, T-Mobile US announced a ‘Stock Up’ plan as part of its ‘Get Thanked’ program which involved the granting of a stock to postpaid customers. In Aug 2016, T-Mobile US came up with unlimited offerings – ‘T-Mobile One’ plan – for $70 a month, replacing its prior $95 unlimited plan. This closely follows Sprint Corp.’s S launch of ‘Unlimited Freedom’ plan at $60 instead of $75 a month, AT&T Inc.’s T) rate revision from $20 for 300 MB to $30 for 1 GB for the smallest data plan and Verizon Communications Inc.’s VZ rate hike by $5 to $10 per data plan.

Several analysts estimate that the company has managed to gain customers from rivals – the other three major U.S. wireless carriers. Figures indicate that more than 250,000 customers are from Verizon, almost 400,000 from AT&T and 300,000 from Sprint in the third quarter.

Recent Developments

T-Mobile US is also forging ahead with its 5G expansion plans wherein it has started higher speed tests with major equipment partners – Ericsson ERIC and Nokia Corporation NOK.

Conclusion

Although the company has boosted its top line by adding customers, T-Mobile US is yet to go a long way to check its bottom line figures. The costs incurred to gain customers and grow revenues has not rewarded its shareholders. Instead, reports state that the company’s stock declined 2.6% to $44.74.

T-Mobile currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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