T-Mobile US continues its strong performance, gaining postpaid phone net adds of 850,000 during the third quarter and seeing its service revenues grow 4% year-over-year to $15.9 billion.
Postpaid service revenues saw even better numbers, with a growth rate of 6% to $12.3 billion. Overall postpaid net additions were 1.2 million, with postpaid phone churn at 0.87%. T-Mo also reported 557,000 high-speed internet customer additions.
The company reported $2.1 billion in profits for the quarter, and it has raised its guidance for the full-year. Meanwhile, it conducted stock buybacks worth $2.7 billion during the quarter and has announced a dividend for the first time; it has also indicated plans to cut its workforce by 5,000 people.
In terms of network investments, T-Mobile US said that it has hit its 2023 goal for midband spectrum coverage (under it’s “Ultra Capacity 5G” network moniker) more than two months ahead of schedule, and it now reached 300 million potential customers.
Mike Sievert, CEO of T-Mobile US, said that the results “paint a clear picture of a durable and differentiated strategy that is working.”
Sievert told investors on the quarterly call that T-Mobile’s network lead is widening, rather than narrowing at AT&T and Verizon deploy C-Band spectrum. “Our midband 5G square mile coverage is … double the next closest competitor—meaning, others still have a lot of wood to chop beyond just population dense pockets to ever reach the expansive geography where T-Mobile is today,” he said, adding that T-Mobile has “more spectrum dedicated to 5G than anyone else” even before it has deployed its C-Band winnings, 3.45 GHz spectrum, the 2.5 GHz licenses that are in limbo until the FCC regains auction authority, or refarming AWS spectrum. “We started the 5G era two years ahead of the competition, and today we remain two or more years ahead. And I predict that two years from now, we still will be,” Sievert said.
He went on to say that T-Mo is already rolling out the bulk of its 2.5 GHz holdings, and that the carrier still has capacity “room to run”, because of the aforementioned airwaves that have yet to be deployed.
Ulf Ewaldsson, the carrier’s president of technology, said on the call that 70% of traffic is now on the company’s 5G network. “By the end of the year, we are approaching 200 megahertz that we will have dedicated for 5G products,” he said.
The company’s quarterly filing also recapped some of T-Mobile US’ spectrum-related moves. The carrier recently settled a dispute with Dish Network over an extension of time for Dish to purchase a 13-megahertz nationwide footprint of spectrum at 800 MHz, which was required to be divested as part of the Sprint/T-Mobile merger.
Dish paid T-Mobile US a non-refundable $100 million (in lieu of a $72 million termination fee if it did not buy the spectrum) which, if it purchases the spectrum by April 1, 2024, will go toward the purchase of the airwaves. If Dish ultimately does not buy the 800 MHz spectrum, T-Mobile US is required to offer them at auction.
The company also noted in its quarterly filing that while it must divest the 800 MHz spectrum, it has two major 600 MHz transactions that have yet to close: spectrum purchase worth $3.5 billion from spectrum holding companies of Columbia Capital, to purchase 600 MHz spectrum that T-Mo is already leasing; and another agreement with Comcast for between $1.2-$3.3 billion.
In addition, T-Mobile US won 7,156 licenses for 2.5 GHz spectrum at auction for $304 million, and has fully paid for them. But the Federal Communications Commission did not complete all the post-auction work to transfer the licenses, and T-Mobile US has not been able to access the spectrum because the FCC’s auction authority lapsed and has yet to be restored by Congress.
