T-Mobile Returns to Profit as Promotions Keep Luring Subscribers

T-Mobile US Inc. (TMUS) added more customers than analysts estimated and raised its forecast for subscriber growth as the carrier continues to challenge rivals with cheaper plans and promotions.

The company added 908,000 monthly branded customers, which exceeded the 717,000 estimated in a Bloomberg survey of eight analysts. The company now projects it will add as many as 3.5 million postpaid subscribers this year, according to a statement today.

John Legere, chief executive officer of T-Mobile, is winning over customers with price cuts and phone financing offers, forcing larger rivals AT&T Inc. and Verizon Communications Inc. to follow suit. The continued subscriber growth may heighten T-Mobiles appeal to SoftBank Corp. (9984) Masayoshi Son, SoftBanks CEO, wants U.S. regulators to allow Sprint Corp. (S) and T-Mobile to combine to create a stronger No. 3 wireless competitor.

The better T-Mobile does, the more valuable they look to an acquirer, but at the same time they look even more valuable to regulators as a standalone business, Roger Entner, an analyst with Recon Analytics LLC, in Dedham, Massachusetts, said in an interview before the results were announced.

T-Mobile, the fourth-largest U.S. wireless carrier, now expects it will add 3 million to 3.5 million postpaid subscribers this year, up from a range of 2.8 million to 3.3 million in its previous forecast. The Bellevue, Washington-based carrier is majority owned by Deutsche Telekom AG. (DTE)

T-Mobile US Inc. Chief Executive Officer John Legere is winning over customers with price cuts and phone financing offers, forcing larger rivals AT&T Inc. and Verizon Communications Inc. to follow suit. Close

T-Mobile US Inc. Chief Executive Officer John Legere is winning over customers with... Read More

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T-Mobile US Inc. Chief Executive Officer John Legere is winning over customers with price cuts and phone financing offers, forcing larger rivals AT&T Inc. and Verizon Communications Inc. to follow suit.

T-Mobile ended its streak of four straight quarterly losses thanks to a $731 million gain from swapping spectrum with Verizon. The company reported second-quarter net income of $391 million, or 48 cents a share, compared with a loss a year ago. Without the spectrum swap, T-Mobile would have posted a net loss.

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T-Mobile Returns to Profit as Promotions Keep Luring Subscribers