If all goes according to plan, Sprint and T-Mobile are about to merge. Until we reach an inflection point on that, they’re operating as separate companies, so it’s a good time to evaluate how their second quarter financial snapshots reflect upon their positions in the budding relationship.
T-Mobile is the one on stronger ground, having surpassed Sprint’s subscriber base in 2016 and continuously making money. It reported its best second quarter in company history with revenue up 3.5 percent from the same period last year to $10.6 billion and profits jumping a whopping 35 percent to $782 million. More than 1.6 million subscribers joined the carrier, making it the 21st quarter T-Mobile has achieved six-digit additions and bringing it over the 75 million mark. A net of 686,000 devices loaded onto the network.
The Un-carrier told investors that it will not following in the way of AT&T, Sprint and Verizon in stratifying its plan offerings — offering more high-speed data for streaming video, music and hotspot use at a higher monthly rate — because the company wants to keep its customer relationships stronger for longer.
“The benefits of creating more subscribers outweigh the shorter term benefit of tweaking [average revenue per user],” Braxton said.
CNET also reports from T-Mobile’s conference call that the company has big subsidy plans for the next set of iPhone releases as well as a major Un-carrier feature reveal on August 15. Prior Un-carrier events introduced looser rules on device leases and the absorption of taxes and fees into advertised plan prices.
Meanwhile, Sprint is getting into its third quarter of net profit in a row. It posted $176 million with the year-ago result being $206 million. Revenues were essentially flat at $8.13 billion and so were subscription adds at 57,000 — the total subscription count has stalled at 54.6 million.
One of the biggest concerns with the merger is that a combined Sprint/T-Mobile would have majority control of the prepaid market between its MetroPCS, Boost and Virgin Mobile brands. Sprint’s prepaid unit had a weak showing this quarter with 3,000 subscriber adds to its cache of 9 million. T-Mobile took in 91,000 new customers and now has almost 21 million in its prepaid ranks.