T-Mobile said it is seeing “notable shifts” in how its customers are using its network with tethering, messaging and collaboration top use cases as the company laid out better-than-expected first quarter earnings.
The company reported first quarter net income of $951 million, or $1.10 a share, on revenue $11.12 billion, up 0.3% from a year ago. Wall Street was expecting first quarter revenue of $11.38 billion with non-GAAP earnings of $1.02 a share.
Since T-Mobile closed the Sprint acquisition April 1, the earnings report just covers T-Mobile. T-Mobile added 777,000 branded postpaid net customers in the first quarter with a churn of 0.86%.
Mike Sievert, T-Mobile CEO, said the company’s goal is to execute well, integrate Sprint and weather the COVID-19 pandemic. T-Mobile completes Sprint merger, Legere hands off to Sievert
T-Mobile didn’t provide 2020 guidance given the COVID-19 pandemic but said it will provide a revised outlook on its second quarter earnings report. For the second quarter, T-Mobile said it expects to add between 0 and 150,000 net postpaid customer additions, merger costs of $500 million to $600 million, COVID-19 costs between $450 million to $550 million and adjusted EBITDA between $6.2 billion to $6.5 billion.
Sprint will bolster T-Mobile’s overall customer base as well as fortify its network. To that end, T-Mobile said it started deploying 5G sites in New York City and Philadelphia via Sprint’s 2.5 GHz mid-band spectrum. The company expanded its 5G sites to an additional 1,600 sites in the first quarter.
T-Mobile had multiple moving parts in the first quarter. Consider:
- The company closed 80% of its retail stores and moved employees to remote work where possible. The closure of T-Mobile stores hampered the company’s ability to add customers.
- Planned for a rapid integration of Sprint. Sprint customers now have access to T-Mobile’s LTE network. T-Mobile is banking on $43 billion in synergies from the deal.
- Branded postpaid average revenue per user fell 1% from a year ago to $45.80.
- At the end of the first quarter, T-Mobile had 68.54 million subscribers.
- Earnings were hampered by supplemental employee payroll, and COVID-19 costs.