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T-Mobile US Inc. recruited more customers for its flagship brand in the third quarter, ahead of its competitors as the carrier continued its quest for a merger with Sprint Corp.
T-Mobile closed the period with 774,000 additional postpaid phone customers, a valuable category as billable subscribers tend to be more profitable. Verizon Communications Inc. added an additional 295,000 postpaid phone connections in the same period, while AT & T Inc. generated 69,000 additional subscribers in this category.
At the same time, T-Mobile's prepaid customer net additions slowed to stand at 35,000, well below the reported 226,000 over the same period last year. . The company said the increased heated competition had hurt the MetroPCS prepaid services business. The company recently renamed the service under the name "Metro by T-Mobile" in order to put more emphasis on the connection with its parent company.
The total number of subscribers of the company reached 62.2 million, excluding customers from other companies using the T-Mobile network.
T-Mobile shares fell 1.5% to $ 63.92 on Tuesday afternoon.
Leaders of the country's third largest mobile phone company have pleaded for the acquisition of their smallest rival since April, when the two companies decided to merge more than $ 26 billion. The combination would leave the US market with three national cellular operators, although T-Mobile representatives said that cable companies and other non-traditional competitors could control their market power.
Both companies presented the deal as a merger, even though their plans would leave T-Mobile executives in charge. The new entity would reduce Sprint's network to increase overall wireless capacity. T-Mobile's chief, John Legere, would lead the merged company.
The stronger results of T-Mobile could reinforce the company's argument that its management is best equipped to compete on a par with its larger rivals, Verizon and AT & T. Sprint, meanwhile, pointed to its weaker financial performance in recent filings with the Federal Communications Commission.
In the three months to September 30, T-Mobile's overall earnings were $ 795 million, or 93 cents per share, compared to $ 537 million or 63 cents a year earlier. Revenues rose 8.2% to $ 10.84 billion.
Changes in how T-Mobile accounts for revenue increased net income by $ 101 million. The company also received $ 88 million in insurance reimbursements for damages related to last year's hurricane season, although the company warned that the storms of the current quarter would have a negative impact. The company recorded $ 53 million in costs related to the Sprint agreement.
The results were obtained after an unusually quiet first half of the year in the wireless industry in the United States. Relatively few Americans have switched providers in the first six months of 2018, although there are signs that the market is becoming increasingly turbulent, especially among prepaid service providers.
The monthly churn rate, the percentage of customers switching carriers during the quarter, reached 1.02% among postpaid subscribers, up 0.95% from the previous quarter, which is an unprecedented hollow. The churn rate for prepaid services reached 4.12%, up from 3.81% in the previous quarter.
Write to Drew FitzGerald at [email protected]
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