- T-Mobile added 830,000 postpaid phone customers in Q2, smashing its own records
- The company touted its status as the operator with the best mobile network
- CEO Mike Sievert said the network will get even better after T-Mobile wraps the acquisition of UScellular on August 1
No surprise here, but T-Mobile’s Q2 earnings call on Wednesday was a veritable lovefest. Some of it was directed at the company itself, but a lot of it focused on its customers, whom T-Mobile can thank for ratcheting up its coffers.
The Bellevue, Washington-based operator reported Q2 service revenues of $17.4 billion, a 6% year-over-year increase, and net income of $3.2 billion, its highest quarterly amount ever and an increase of 10% year over year. Adjusted free cash flow grew 4% year over year, to $4.6 billion.
By our back-of-the-envelope math and a little help from ChatGPT, we figure that would buy about 808 million Big Macs, a nod to the catchy “I’m Lovin’ It” jingle that McDonald’s managed to lodge into the minds of so many consumers and the source behind our headline. Ba da ba ba ba. By the way, the word “love” was mentioned 15 times during T-Mobile’s earnings call, most often by CEO Mike Sievert.
Who wouldn’t be lovin’ it? T-Mobile added 830,000 postpaid net phone customers during the second quarter, the best in the industry. By comparison, AT&T on Wednesday morning reported 401,000 postpaid phone additions for the quarter and Verizon earlier this week reported a net loss of 9,000 postpaid phone connections in Q2.
“The quality of our customers continues to improve at a rapid pace,” with average revenue per account (ARPA) growth up over 5%, its highest growth in eight years, Sievert said.
T-Mobile loves its network
T-Mobile has been talking a lot about the quality of its network, having recently won the Best Mobile Network prize from Ookla. But while existing customers are recognizing the quality of T-Mobile’s network, most of its prospective customers don’t know anything about that, he said.
In fact, only about 20% of consumers looking to switch carriers in the broader market believe T-Mobile has the best network, he said.
“This represents an enormous runway for us. Network perception has now become a major focus for us for a simple reason. There’s a massive opportunity from all those tens of millions of customers who went elsewhere in the 4G era, deliberately choosing what was then the best network,” he said, presumably referring to Verizon but he didn’t name Big Red.
“Well, there’s a new best network in America and you’ll be seeing us bring that message to consumers and businesses in really innovative ways,” he pledged. “Our network lead continues to widen.”
To help boost its network in more remote areas of the U.S., T-Mobile is acquiring most of the wireless assets and about 30% of the spectrum at UScellular. Sievert said that transaction is set to close on August 1.
Satellite, cable MVNO and fiber
The CEO didn’t have a lot of new information to share about the T-Satellite service because it just commercially launched on Wednesday morning. But he said it’s already having an impact on consumers’ lives, including during the devastating floods in Texas. More than a quarter of a million text messages went out over satellite during the most critical moments of the emergency, and “people were able to be connected when it mattered,” he said.
On Tuesday, T-Mobile announced a new multi-year partnership with Comcast and Charter Communications to provide mobile service to small and mid-sized businesses via an MVNO agreement.
“While it's going to take some time for this to grow into something meaningful, I'm super excited about their capabilities to generate growth in the SMB sector in a way that will be truly incremental for T Mobile,” Sievert said, noting that large enterprises that have 1,000 lines or more are not included in the deal.
As for fiber, T-Mobile plans to close its JV acquisition of Metronet tomorrow. That follows last month’s launch of its T-Fiber service, which came after the closure of its Lumos acquisition in April.