T-Mobile misses quarterly revenue estimates as competition bites

February 1 (Reuters)-T-Mobile US Inc (TMUS.O) It fell short of its fourth-quarter earnings forecast on Wednesday despite adding nearly a million wireless subscribers as its competitors beefed up their holiday-season cell phone offers to lure customers.

The U.S. wireless carrier recently added thousands of wireless subscribers thanks to smartphone discounts, the lowest plan prices in the industry, and 5G dominance thanks to its $23 billion acquisition of Sprint Corp. in 2020. is adding.

but verizon (Tennessee) and AT&T (Tennessee) It hit T-Mobile’s ferocious growth by ramping up its handset offerings during the holiday season to take advantage of the growing demand after the launch of its latest iPhone.

Carriers added 927,000 postpaid subscribers in the fourth quarter, the highest among their peers.

But it also had the highest churn rate of 0.92%, which is the percentage of customers who stopped using its services, compared to its competitors. In contrast, Verizon reported a monthly phone subscriber churn rate of 0.89%, while AT&T had a 0.84%.

Additionally, executives have hinted at slowing growth as demand for video conferencing to support remote work and phones with premium plans wanes as offices reopen.

T-Mobile expects to add between 5 million and 5.5 million net monthly bill paying subscribers in 2023, compared to a reported 6.4 million additions in 2022.

The company earned $1.18 per share on revenue of $20.27 billion in the fourth quarter, while analysts’ average estimate was $1.10 per share on revenue of $20.6 billion, according to Refinitiv data. .

Analysts also seek further clarification on the company’s recent data breach that may have exposed 37 million postpaid and prepaid accounts. The company said it could incur significant costs related to the January incident.

Adjusted earnings after deducting lease income are expected to be between $28.7 billion and $29.2 billion in 2023, up 10% year-over-year at the midpoint, according to T-Mobile.

Shares of the Bellevue, Wash.-based company fell 0.5% in premarket trading on Wednesday.

Reported by Eva Mathews of Bangalore. Edited by Shinjini Ganguli and Mark Porter

Our criteria: Thomson Reuters Trust Principles.