(Reuters) - T-Mobile US Inc (TMUS.O) beat analysts’ estimates for quarterly revenue and profit on Thursday, as the wireless carrier added more mobile phone subscribers to its monthly plans, some of which come bundled with Netflix Inc (NFLX.O) service.
A T-Mobile store is pictured in the Brooklyn borough of in New York City, U.S., December 3, 2019. REUTERS/Brendan McDermid
The third-largest U.S. wireless carrier by subscribers has been awaiting a decision from a federal judge on whether it can move forward with its $26.5 billion merger with Sprint Corp (S.N). Multiple states had sued to block the deal, arguing it is anticompetitive and will raise prices for customers.
Revenue rose to $11.88 billion from $11.45 billion, edging past analysts’ average estimate of $11.83 billion, according to IBES data from Refinitiv.
T-Mobile launched its 5G network, the next generation of wireless, in December. The company said its 5G now covers more than 200 million people nationwide with Chief Operating Officer Mike Seivert joking that other carriers’ coverage maps looked like “splattered paint on the wall.”
The Department of Justice approved T-Mobile and Sprint’s merger under the condition that some prepaid assets be sold off to Dish Network (DISH.O), making the satellite company a fourth wireless competitor. The Federal Trade Commission also approved the deal last year.
T-Mobile maintained in closing arguments last month that customers will benefit from having access to cheap, fast wireless speeds and that buying Sprint presents the best option for buying compatible spectrum needed to expand its 5G network.
“We’re awaiting the judge’s verdict and we remain confident in a positive outcome,” T-Mobile CEO John Legere said during a conference call with analysts.
Legere, an outspoken CEO known for taking jabs at competitors AT&T and Verizon, joked around and occasionally cursed on his last earnings call. Legere will step down in April and Seivert will become CEO.
T-Mobile added 1 million net new phone subscribers in the fourth quarter ended Dec. 31, in line with analysts’ estimates from research firm FactSet.
T-Mobile’s postpaid phone churn, or the rate of customer cancellations, was 1.01% in the fourth quarter. Cowen analysts estimated churn of 0.95%.
T-Mobile said it expects to add between 2.6 million to 3.6 million branded postpaid net additions in 2020, even without the merger with Sprint.
Analysts and investors pay attention to so-called postpaid customers, because they stick with the carrier longer.
“The plan this year is all about continuing the march that we started in 2019,” Neville Ray, T-Mobile’s chief technology officer, said on the call. “And I love that because I want AT&T and Verizon to be chasing my tail on nationwide 5G.”
Reporting by Neha Malara in Bengaluru and Arriana McLymore in New York; Editing by Vinay Dwivedi and Daniel Wallis