Carrier adds 589,000 postpaid phone customers, 338,000 home internet subs
T-Mobile US says it is largely wrapping up the integration of Sprint this year, both in terms of the network and customers. The carrier reported 589,000 postpaid phone net additions in the first quarter and also brought on 338,000 home internet net customer additions, amid total postpaid net customer adds of 1.3 million in the first quarter—it’s best Q1 in eight years, according to the company.
Net income for the quarter was $713 million, which was down from $933 million in the year-ago quarter and included $1.1 billion in merger-related costs during the quarter. Service revenues were at $15.1 billion, up 7% year-over-year. The carrier reported that postpaid service revenue grew at 9% year-over-year.
T-Mobile US reported that about 45% of its postpaid customers are using a 5G phone, with 5G devices accounting for more than half of its total network traffic.
CEO Mike Sievert said that the carrier is “approaching some of our biggest milestones, including moving the remaining customers off the Sprint network in the next couple of months, just over two years from merger close.” He added that T-Mo is “on track to upgrade or decommission substantially all of the Sprint sites this year.” As of the first quarter, he said, T-Mobile US has already handled about one-third of the approximately 35,000 sites that it plans to decommission, with its “big push coming in the second half of this year.”
“We’re in the home stretch of our accelerated integration,” he declared during the quarterly call.
Peter Osvaldik, T-Mo’s CFO, noted that the carrier is raising its guidance, despite the fact that it still expects to see some impacts from customer migration from the Sprint network in the first half. “As we began the CDMA sunset at the end of Q1, we took an adjustment of 212,000 postpaid phones … as well as 349,000 postpaid other devices which were largely low-ARPU IoT devices,” Osvaldik said. “We expect to begin the LTE sunset at the end of Q2 and estimate a base adjustment of approximately 300,000 postpaid phones and between 700,000 and 900,000 lower ARPU, postpaid other devices.”
Sievert said that the carrier continues to see “good momentum in smaller markets and rural areas” and that its new accounts in those areas were up 40% year-over-year in the first quarter. “These markets are also a great example of where our high-speed Internet is helping to open doors for us to drive mobile penetration,” he added. T-Mobile US execs said that the carrier had about 13% market share of those markets in 2020, ended 2021 with 15% market share and is aiming for 20% market share by 2025.
In its Home Internet service, T-Mobile US now serves more than 1 million householders, after ending the first quarter with 984,000 customers. Average usage, Sievert said, is 300 to 400 gigabits per month, with about 10% of customers using a terabyte per month.
Sievert also emphasized both T-Mobile US’ 5G coverage and performance: The company covers 315 million potential customers with its low-band 5G, and 225 million Americans with its mid-band 5G. Nearly 85% of T-Mobile US customers are covered by its mid-band 5G deployments, he added, claiming that T-Mobile US’ mid-band push spurred AT&T and Verizon to shift their focus from mmWave 5G. “We caused others to pivot from an apparent willingness to leave fast 5G to a select few customers within arm’s reach of a millimeter wave site,” Sievert said. “And now we see them greatly increasing their investments in mid-band spectrum and deployment. They are trying to chase us, but only to realize they will be and are years behind T-Mobile.”
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