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T Mobile Revenue Beats Estimates as Discounts Lure Customers

T-Mobile Revenue Beats Estimates as Discounts Lure Customers

By Reuters | Updated: 21 February 2015 12:23 IST

T-Mobile US Inc, the No.4 U.S. wireless operator, posted quarterly profit and revenue that handily beat market estimates as aggressive discounts helped it add more than 2 million subscribers.

Shares of T-Mobile US, which has turned around years of subscriber losses, rose as much as 7 percent on Thursday.

T-Mobile, two-thirds of which is owned by Deutsche Telekom, offers attractive plans for equipment installation, free international data roaming, and lifetime free data for tablets.

The company, which calls itself the "Un-carrier," has eliminated contracts and introduced a billing plan that allows customers to pay for devices in installments.

The company's "Data Stash" plan, launched in the fourth quarter ended Dec. 31, allows customers to retain unused data in their next billing cycle.

T-Mobile added a net 2.1 million customers in the quarter. Revenue jumped 19.4 percent to $8.15 billion.

It reported net income of $101 million, or 12 cents per share, compared with a loss of $20 million, or 3 cents per share, a year earlier.

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Analysts on average had expected a profit of 5 cents per share on revenue of $7.88 billion, according to Thomson Reuters.

The company has done a very solid job of good, old-fashion cost management, MoffettNathanson LLC analyst Craig Moffett said.

"... The fourth quarter is a really expensive time to play. And it is interesting to us that our competitors don't seem to get that, as they have plowed all kinds of irrational money," T-Mobile Chief Operating Officer Michael Seivert said on a call.

The company said it expects to save at least $1.5 billion by 2016 as it consolidates its network with that of MetroPCS' a year ahead of schedule.

T-Mobile bought MetroPCS in 2013.

The company said it was targeting to add 2.2 million-3.2 million branded postpaid net customers this year.

T-Mobile's shares were up 3.4 percent at $32.08 on the New York Stock Exchange in midday trading on Wednesday.

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