T-Mobile US posted record-high quarterly revenue and profit in Q1 despite the Covid-19 (coronavirus) pandemic, but said it was looking for ways to cut spending ahead of an expected heavy hit from the pandemic in the current quarter.
Net income grew 4.7 per cent year-on-year to $951 million. Revenue of $11.1 billion was up from $11.08 billion, as a 5.3 per cent increase in service turnover to $8.71 billion softened a 15.9 per cent drop in equipment sales to $2.12 billion.
Post-paid net additions of 777,000 were down from 1.01 million.
During an earnings call, CMO Matt Staneff said business started to rebound in April following a “pronounced decline” in March following the closure of 80 per cent of its retail locations. But he warned “we’ve got a long way to go” to return to normal.
T-Mobile predicted post-paid net additions would fall to between nought and 150,000 this quarter. It expects to book a charge of between $450 million and $550 million for Covid-19-related costs.
CFO Braxton Carter said the operator was “taking actions to adjust our spending” across “various operating areas” to help mitigate potential recessional impacts related to the pandemic.
However, CEO Mike Sievert expressed optimism “temporary impacts are just that”, adding T-Mobile was well-positioned to take advantage of increased switching activity expected to follow the pandemic: “We know from the past that T-Mobile does disproportionately well in an environment with a larger pool of switchers.”
Executives outlined plans to aggressively expand the operator’s 5G network, with president of technology Neville Ray stating it will add 2.5GHz spectrum on “thousands of sites in 2020”.
He flagged “all of the Northeast markets” as a key focus, along with most major cities.
Ray added around 10 million unique Sprint customers, more than a third of its post-paid base, are now accessing T-Mobile’s LTE network each week after enabling roaming last month.