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Heavy Discounts Are Paying Off for T-Mobile

A T-Mobile US Inc. Store Ahead Of Earnings FiguresA T-Mobile US Inc. Store Ahead Of Earnings Figures

T-Mobile @(TMUS) reported better-than-expected quarterly revenue and profit as the No.3 U.S. wireless carrier added subscribers due to heavy discounts and promotions.

The company’s shares rose 2.8% to $46.25 in premarket trading on Wednesday.

T-Mobile’s postpaid phone churn rate – the rate at which users switch to other networks – fell to 1.27%, its lowest ever, in the second quarter from 1.3%, a year earlier.

However, the company added 890,000 postpaid customers, or those who pay monthly bills, fewer than the 1 million it added a year earlier.


Still, T-Mobile raised its full-year forecast for net postpaid subscriber additions to 3.4 million-3.8 million from 3.2 million-3.6 million.

Net income fell by more than a third to $225 million, or 25 cents per share, in the quarter ended June 30.

Revenue rose 12.8% to $9.22 billion.

Analysts on average had expected earnings of 20 cents per share and revenue of $9.03 billion, according to Thomson Reuters I/B/E/S.