T-Mobile continued to grow its customer base in the first quarter of 2024, adding 1.2 million net customers to its phone and Internet businesses on the heels of two acquisitions, the company said during its first-quarter earnings call Thursday.
The first acquisition was the long-awaited $1.35 billion deal to buy prepaid carrier Mint Mobile, which the US Federal Communications Commission approved yesterday, finalizing a process that began a year ago when T-Mobile announced it. The carrier also announced yesterday that it had entered into a joint venture with investment outfit EQT to spend $950 million to acquire Lumos, a fiber internet provider, to access its network, which reaches 320,000 households on the East Coast of US with cable and Wi-Fi service.
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The acquisitions expand T-Mobile’s investments in two areas: prepaid phone plans and cable Internet, the latter of which the carrier has largely ceded to rivals Verizon and AT&T in the past. To put it in context, Verizon ended the first quarter with 7.2 million cable broadband subscribers, while AT&T ended the same period with more than 8.5 million. To catch up, T-Mobile will invest another $500 million between 2027 and 2028 to expand the Lumos network to a total of 3.5 million households by the end of the final year, the carrier said in a blog post.
During the earnings call, T-Mobile CEO Mike Siewert praised Lumos’ management team for its “years of experience building fiber in an efficient, cost-effective and targeted build model. We’re really excited to be able to accelerate what Lumos is already doing to reach more and more households in the coming years.”
That expansion came alongside more conventional growth in categories where T-Mobile has traditionally competed, such as mobile. The carrier added 532,000 subscription net customers (down a slight 6,000 from the first quarter of 2023), a metric the industry uses to denote success and reliable revenue. On the call, T-Mobile Consumer Group President John Fryer noted that while people are holding on to their phones longer, leaving only about 2.4 percent of customers upgrading their devices during the quarter, they are leaving their subscriptions at the most. -the lowest rate in the history of T-Mobile.
“It’s really the best of both worlds when you have customers staying at incredible rates, record low rates and not just staying for free devices,” Fryer said. “They stay because of that differentiated value proposition, the network and the overall experience.”
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Sievert added that 75% of postpaid customers have 5G phones and have thus been able to experience the best the network has to offer without having to upgrade. “So when you have a fantastic experience on your phone, the incentive to replace it prematurely just isn’t there,” he said.
The carrier reported losses of 48,000 prepaid net customers (including phone and internet) in the quarter, a total decrease of 74,000 customers compared to 26,000 added in the same period last year. That’s still less than the 216,000 prepaid phone losses suffered by Verizon and the 132,000 prepaid phone losses from AT&T.
Sievert credits the continued growth of its fixed wireless base despite the sunset of promotions from the service’s launch era by “attracting customers at our nominal price points.” T-Mobile added 405,000 FWA customers, down from the 523,000 it added in the first quarter of 2023. The carrier ended the current period with a total of 5.2 million customers for its Internet service.
T-Mobile reported $16.1 billion in revenue in the quarter, up 4% from the same period last year. That breaks down to $2 earnings per share, up 27% from Q1 2023’s $1.58 per share.
Shares of T-Mobile were slightly lower, down 0.05%, by the end of the day.
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