T-Mobile raises subscriber forecast as price war rages on

In this November 2, 2015 file picture, customers browse mobile phone handsets as a sign sits above the entrance to a T-Mobile store, operated by Magyar Telekom Nyrt., in Budapest, Hungary. (Bloomberg/Akos Stiller)

T-Mobile US Inc.’s popularity among wireless consumers continued as the fastest growing mobile carrier exceeded subscriber estimates and again raised its forecast for customer growth this year.

T-Mobile expects to add 3 million to 3.6 million customers this year, up from an April forecast of 2.8 million to 3.5 million, the Bellevue, Washington-based carrier said in a statement Wednesday. The company raised its profit outlook for 2017, suggesting that promotions, price cuts and giveaways needed to attract new customers aren’t hurting the bottom line.

The results show T-Mobile emerging as a winner in an industry price war that has every major competitor offering phone discounts and unlimited data plans. The company’s ability to take market share from rivals has put it at the center of consolidation talks, including preliminary discussions with Sprint Corp.

The shares were up 2.9 percent to $63.78 in late trading. Deutsche Telekom AG, the German telecoms giant that owns about 64 percent of T-Mobile, rose as much as 2.2 percent in early Frankfurt trading. The Bonn-based company will report second-quarter earnings on Aug. 3.

T-Mobile signed 817,000 new customers in the second quarter, more than the 731,250 analysts were expecting. Earnings more than doubled to 67 cents a share, shattering the 36-cent average estimate of analysts.

Even with the higher forecast, the company is unlikely to match its 4.1 million subscriber additions from 2016. Sprint Corp., which trails T-Mobile in wireless customers, has introduced even more aggressive promotions, including a full year of free, unlimited data. Bigger rivals AT&T Inc. and Verizon Communications Inc. have followed T-Mobile in offering unlimited data plans.

T-Mobile and Sprint have been in deal talks, suggesting a merger would help them better compete with AT&T and Verizon in offering the next generation of wireless-data services. But those discussions have been on hold while Sprint explores potential wireless partnerships with Comcast Corp. and Charter Communications Inc.

T-Mobile’s average prices for phone service slipped slightly from a year ago, with new services making up for some of the discounts. Phone customers paid $47.01, down 10 cents from a year earlier. – Bloomberg