TMUS T Mobile US Inc

By Drew FitzGerald 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (August 7, 2020).

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 07, 2020 02:47 ET (06:47 GMT)

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