T-Mobile Overtakes AT&T to Become No. 2 Carrier
August 06 2020 - 07:19PM
Dow Jones News
By Drew FitzGerald
T-Mobile US Inc. said it vaulted ahead of rival AT&T Inc. in
the race for wireless customers to become the country's
second-largest cellphone carrier.
The Bellevue, Wash., company ended June with 98.3 million U.S.
customers, excluding wholesale subscribers on other brands that use
its network. AT&T reported 92.9 million prepaid and postpaid
customers, a tally that didn't count wholesale accounts or
connected devices such as Wi-Fi hotspots and car sensors. T-Mobile
included non-phone gadgets like wireless hotspots in its reported
customer base.
Despite the different reporting policies, T-Mobile was long
expected to climb the wireless rankings after it closed its merger
with rival Sprint in April. The merger effort prevailed after a
more than two-year battle with regulators and antitrust enforcers
that culminated in a federal antitrust trial brought by a coalition
of state officials. The transaction created a larger mobile service
provider with a market value topping $100 billion controlled by
German parent company Deutsche Telekom AG.
"We're staring down Verizon with our sight set on the No. 1
spot," T-Mobile Chief Executive Mike Sievert said Thursday during a
videoconference with financial analysts. Verizon Communications
Inc. ended June with 119.9 million wireless connections, a figure
that also counted smartwatches, tablets, and other machines aside
from smartphones.
T-Mobile's second-quarter results showed it also weathered the
coronavirus pandemic better than its competitors, adding 253,000
postpaid phone customers during the period. Investors place a
higher value on postpaid customers -- who are billed for service
after it is rendered -- than on prepaid plans subject to more
customer switches.
Overall, T-Mobile reported a second-quarter profit of $110
million, down from $939 million a year earlier before it had
acquired Sprint. The result included $798 million of pretax merger
costs. Revenue jumped to $17.7 billion, up 61% from about $11
billion a year earlier, when T-Mobile was a stand-alone
carrier.
Executives warned investors to expect higher-than-usual costs in
the second half, including between $800 million and $1 billion in
merger-related expenses. T-Mobile decommissioned the Sprint brand
earlier this week and continues to close some of its former
competitor's stores while it merges the two companies' networks, a
multiyear process.
Write to Drew FitzGerald at andrew.fitzgerald@wsj.com
(END) Dow Jones Newswires
August 06, 2020 19:04 ET (23:04 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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