Taking stock of carriers’ third-quarter performance

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Taking stock of carriers’ third-quarter performance

 

U.S. carriers are continuing to enhance their LTE networks while also investing in their next-generation 5G networks. In recent weeks, the four national carriers have all announced their third quarter 2019 financial results, illustrating just how hot the state of competition is at this point.

Crediting its treatment of customers, T-Mobile US CEO John Legere reported 1.7 million total net customer additions in the quarter and a record-low third-quarter postpaid phone churn of 0.89%, down 13 basis points from a year earlier. Legere commented, “not only is this a record low for Q3, we also beat AT&T for a fourth quarter in a row.”

Further, the T-Mobile US’s earnings per share totaled $1.01, beating analysts’ forecast of 96 cents, and the company saw an 11% increase in cash capex to $1.5 billion. The carrier’s net income hit $870 million, up 9% from a year earlier, and earnings per share totaled $1.01, beating analysts’ forecast of 96 cents.

During the investor’s call, Legere also announced that after “an exhaustive review of the facts” the Federal Communications Commission has finally voted to approve T-Mobile’s merger with Sprint. “As we work through the final steps of closing our merger,” Legere said, “we remain convinced that the merits of the deal are even truer today.”

While this announcement is, of course, welcome news for Sprint as well, the carrier experienced some mixed Q3 results. Sprint reported growth in postpaid net additions of 273,000 during the second quarter of 2019; however, the carrier lost 91,000 of its most lucrative phone connections in the latest quarter and also lost more than 450,000 connections through its wholesale and affiliate program. Sprint’s loss per share was $0.07 compared to profit of $0.05, prior year.

Further, Sprint experienced a net loss of $274 million, negatively impacted by the estimated reimbursements to federal and state governments ordered as a result of the discovery that Sprint improperly collected “tens of millions” of dollars in federal subsidies for 885,000 Lifeline subscribers that weren’t using the service.

Despite the tumultuous quarter on the connections side, Sprint’s total wireless service revenue was relatively stable year-over-year, and CEO Michel Combes “remain[s]convinced that merging with T-Mobile and building one of the world’s most advanced 5G networks is the best outcome for all consumers, employees and shareholders.”

As Legere boasted, AT&T’s postpaid phone churn did not quite stack up to T-Mobile US’, showing 1.19% compared to 1.16% in the year-ago quarter, driven by tablet and phone churn, the carrier said. Postpaid churn was also up, from 0.93% in the same period last year to 0.95% this year.

Further, while AT&T recorded 317,000 total smartphone net adds, it saw 217,000 postpaid net losses, where tablet losses offset gains in phones and wearables. Overall, it had 101,000 postpaid phone net adds and 154,000 prepaid phone net adds. The carrier also expects 5G device adoption to boost its equipment sales as it launches 5G nationwide in 2020.

In addition, AT&T reportedly surprised Wall Street analysts with a much lower-than-expected capex for 2020. The carrier expects to spend around $20 billion on capex next year, which is way down from the $23 billion it expects to spend this year and the $22 billion that most Wall Street analysts had expected AT&T to spend in 2020.

When Verizon presented its third quarter earnings, it reported a small year-over-year increase in total revenue of $32.9 billion, up from $32.6 billion in the same quarter last year and up from $32.1 billion in Q2 this year. The carrier also reported an earners per share of $1.25 versus and expected $1.24.

Verizon saw a total of 601,00 retail net additions, which more than doubled from the comparable year-ago quarter.

The carrier said it spent $4.4 billion in capex in the third quarter, falling roughly $100 million below most Wall Street expectations. However, analysts noted that Verizon still expects to spend between $17 billion and $18 billion in capex throughout 2019.

Verizon, as well as its competitors, have hit on 5G-based home broadband as a viable alternative to wired internet service and see it as a mechanism to win market share from traditional cable companies.

 

 

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  U.S. carriers are continuing to enhance their LTE networks while also investing in their next-generation 5G networks. In recent weeks, the four national carriers have all announced their third quarter 2019 financial results, illustrating just how hot the state of competition is at this point. Crediting its treatment of customers, T-Mobile US CEO John […]

The post Taking stock of carriers’ third-quarter performance appeared first on RCR Wireless News.

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Wireless News CampaignNovember 9, 2019

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