T-Mobile Grows Key Customer Segment -- WSJ

By Drew FitzGerald and Dave Sebastian 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (January 8, 2020).

T-Mobile US Inc. said it added one million of its most profitable cellphone customers in the fourth quarter, driving the carrier's subscriber base closer to its larger rivals' as it awaits a ruling on its proposed merger with Sprint Corp.

The Bellevue, Wash., company issued preliminary results showing a net gain of one million postpaid phone customers during the last three months of 2019, plus 77,000 more prepaid subscribers. Postpaid subscribers are important to carriers because they tend to pay their monthly bills regularly and are less likely to switch providers.

T-Mobile ended the year with about 67.9 million customers, excluding "wholesale customers" who pay another brand that uses its cellphone network. The company typically reports full fourth-quarter results, including profit and cash flow metrics, later in the year.

T-Mobile's proposed $26 billion merger with Sprint, announced in 2018, has overshadowed the company's steady growth over the past two years.

Lawyers for both sides are scheduled to deliver closing arguments in the case on Jan. 15, following a two-week December trial that featured testimony from top executives at T-Mobile and Sprint as well as their corporate parents, Deutsche Telekom AG and SoftBank Group Corp.

The merger's uncertain outcome has done little to curb the No. 3 carrier's overall growth. Executives said Tuesday that unusually heated competition near the end of 2019 helped T-Mobile win more customers. Dueling promotions can crimp carrier profits, though they also offer discounters an opportunity to gain a bigger share of the market.

"We're able to simultaneously pursue this prize of combining with Sprint while delivering in the near term," Mike Sievert, the company's operating chief, said Tuesday at a Citigroup Inc. technology conference in Las Vegas.

Mr. Sievert is slated to take over as chief executive in May after longtime boss John Legere's contract expires. Mr. Legere said he announced the planned handoff early ahead of the Sprint merger trial to avoid complicating the litigation.

Combining T-Mobile with its smaller rival would create a third major wireless provider with roughly as many customers as Verizon Communications Inc. and AT&T Inc. Verizon ended the September quarter with 118.6 million wireless connections, including devices like tablets and smartwatches. AT&T reported 92.9 million domestic wireless subscribers.

--Dave Sebastian contributed to this article.

Write to Drew FitzGerald at [e-mail] and Dave Sebastian at [e-mail]

(END) Dow Jones Newswires

January 08, 2020 02:47 ET (07:47 GMT)

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