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T-Mobile is gaining on Sprint

T-Mobile beat Wall Street expectations with its Q2 earnings report as it swayed back to profitability and saw subscriber growth catch up to rival Sprint.
 
According to T-Mobile, its second quarter financial report saw a net profit of $391 million USD with earnings of $0.48 per share -- an increase from a loss of $0.19 in the first quarter of 2014.
 
This boost was largely helped by the $731 million USD Verizon paid T-Mobile for licensing deals to acquire spectrum.
 
Total revenue was $7.2 billion USD, up five percent from Q1 2014 and 15 percent year-on-year. Subscriber growth added to revenue, as T-Mobile reported 50.5 million customers total (1.5 million were added this quarter alone).
 
This is great news for T-Mobile, but not its rival Sprint, which has around 53 million customers and likely feels the UnCarrier gaining on its tail.
 
“We have completely reversed T-Mobile’s trajectory and started a revolution that is changing the rules in wireless,” said John Legere, President and CEO of T-Mobile.
 

T-Mobile CEO John Legere

“Now -- with more than 50 million customers, 1.5 million customers added this quarter and 5 quarters in a row of over 1 million net new customers -- we are proud to be the fastest growing wireless company in America, with the fastest 4G LTE network and, just this morning, recognized for having the best Customer Service nationwide.”
 
Total operating expenses were $6.2 billion USD in the second quarter of 2014, down 10 percent from $6.9 billion in the first quarter of 2014.
 
T-Mobile's UnCarrier program has been underway for a year or so now, and while aggressive pricing, 4G rollout and better plans have helped gain momentum in the competition with other U.S. carriers (namely Sprint), it seemed the program led to some heavy losses. 
 
But today's Q2 results turned that around, showing that the UnCarrier program really is a force to be reckoned with.
 
Some recent UnCarrier offerings include a free unlimited international text and data plan in October 2013 and a "Get Out of Jail Free Card" that pays up to $350 per line in ETFs when switching from Verizon, AT&T or Sprint over to T-Mobile. 
 
More recently, T-Mobile started offering a $100 10GB family plan. The same plan costs around $160 on Sprint, Verizon and AT&T. 
 
For the quarter, Sprint lost 245,000 net contract subscribers, which is an improvement over last quarter's loss of 383,000. It also reported fiscal Q1 profit of $23 million USD, or one cent per share, on revenue of $8.79 billion USD.

Source: Business Wire





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