The FCC has finally voted to approve T-Mobile, Sprint merger
T-Mobile had a lot to celebrate during its third-quarter earnings call. The carrier’s net income hit $870 million, up 9% from a year earlier, and earnings per share totaled $1.01, beating analysts’ forecast of 96 cents. Further, CEO John Legere announced that after “an exhaustive review of the facts” the Federal Communications Commission has finally voted to approve T-Mobile’s merger with Sprint.
“As we work through the final steps of closing our merger,” Legere said on the call, “we remain convinced that the merits of the deal are even truer today.”
According to Legere, the deal, which is taking “longer than planned” to close, will deliver more than $43 billion in synergy while almost tripling T-Mobile’s total spectrum holdings in low and mid-band. Further, he claims that because the closing is taking so long, the carrier had more time to prepare for the integration.
“We have detailed integration plans and we are preparing to start deploying Sprint’s 2.5-gigahertz spectrum soon after closing. We’re working hard to complete the final steps for the merger and we remain confident and optimistic,” he said.
However, despite the good news, and despite a higher net income, T-Mobile’s revenue, totaling $11.1 billion, failed to meet expectations of $11.33 billion. T-Mobile shares stood at $82.15 in after-hours trading, down 0.3%, after it finished the regular session up 0.9%.
Crediting its treatment of customers, Legere reported 1.7 million total net customer additions in the quarter and a record-low third-quarter postpaid phone churn of 0.89%, down 13 basis points from a year earlier. Legere commented, “not only is this a record low for Q3, we also beat AT&T for a fourth quarter in a row.”
He also stated, “Wireless customers want to do business with the company that treats them right and changes the rules of the industry in their favor. And this shows up clearly in our churn numbers as customers are coming and staying longer than ever before.”
Legere detailed T-Mobile’s 5G network, commenting that the carrier’s 600 megahertz spectrum will be its foundation. “And it’s live and nearly 8,300 cities and towns and 48 states in Puerto Rico. This deployment covers 1.4 million square miles and 200 million POPs today,” he said.
He claimed that the new T-Mobile 5G network will have enhanced coverage and, unlike Verizon and AT&T’s current millimeter-wave-based 5G networks, will work indoors.
At the same time the carrier has been working on its 5G network, it has also been expanding its 4G LTE network. “We’ve caught up to AT&T and Verizon, and now have 326 million Americans covered with 4G LTE, nearly 99% of the U.S. population,” Legere said. “And we now have 311 million Americans covered by low band spectrum, both 600 megahertz, and 700 megahertz combined.”
He added that T-Mobile plans to launch 5G on 600 megahertz on a nationwide footprint of more than 200 million POPs with compatible smartphones later this year.