T-Mobile Raises Guidance After Topping Q1 Expectations as Number of Subscribers Raises

By Mariliana Fotopoulou Wednesday, May 5, 2021

Telecommunications giant T-Mobile reported better-than-expected Q1 earnings on the back of the rising number of subscribers as the company positions itself for a 5G supercycle.

A T-Mobile store.

Robust Q1 Delivered

T-Mobile said it made a profit of $0.74 per share to top the consensus of $0.55 per share. Business sales for Q1 came in at $19.76 billion, representing a strong acceleration from $11.11 billion reported a year earlier. Wall Street was calling for business revenues of $18.90 billion. Free cash flow (FCF) rose year-over-year (YOY) to $1.3 billion in Q1.

The telecommunications company also delivered a big beat on another closely-watched business metric. T-Mobile said it added 773,000 postpaid phone subscribers to crush estimates of 475,300 from surveyed market analysts. Overall, the company added 1.2 million postpaid customers.

Mike Sievert, CEO of T- Mobile, described Q1 as “stellar,” which further solidifies the company’s position as an industry leader.

“We just keep pushing further ahead of the competition. Our network leadership is fueling customer momentum, delivering merger synergies and expanding our addressable markets for growth. We have so much confidence that we are raising 2021 guidance just one quarter into the year. Our mission is to be the very best at connecting customers to their world and we’re delivering on it.”

T-Mobile stock price soared about 2% in extended trading Tuesday after the company raised its guidance on strong demand for 5G services. The telecommunications business now expects full-year postpaid net customer additions between 4.4 million and 4.9 million, higher compared to the previously-communicated forecast of 4.0 million to 4.7 million.

The company has also provided an update on its mega acquisition of Sprint Corp. as it now expects to generate over $3 billion in the business merger synergies. About 20% of Sprint customers have already been moved to the T-Mobile network, with about 50% of Sprint traffic now taking place on the T-Mobile network.

The biggest driver of the “stellar” Q1 performance comes from robust demand for 5G services, where T-Mobile is considered to be a leader in the US market. The Sprint acquisition provided the telecommunications company with a “head start” to help it tap into a surge in demand for fast internet connection amid the ongoing COVID-19 pandemic.

“T-Mobile continues to layer on the capacity and speed as Ultra Capacity 5G lights up in more places across the country. T-Mobile’s Extended Range 5G covers 295 million people across 1.6 million square miles, 4x more than Verizon and 2x more than AT&T,” the company said in a statement.

The super-fast Ultra Capacity 5G covers 140 million people as the telecommunications company continues to push to meet its target of 200 million people covered by the end of this year. According to T-Mobile, the percentage of business consumers who see T-Mobile as “The 5G Company” has jumped by 120% over the last year and a half.

Summary

T-Mobile delivered a robust quarterly performance as the number of subscribers jumped sharply amid strong demand for 5G services and fast internet connections. Furthermore, the telecommunications business provided a positive update on its merger with Sprint Corp.

About the Author


Headshot for author Mariliana Fotopoulou

Mariliana has an MSC in consumer analytics and business strategy. She has a special interest in fast-moving industries and big data.

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