T-Mobile US branded its gains in the latest spectrum auction “a huge win for consumers and T-Mobile”, as it reported another quarter of service revenue and subscriber gains.
In the 600MHz auction, which ended earlier this month, the company paid $8 billion for 31MHz of frequencies covering all of the country. It said it expects at least 10MHz covering more than 1 million square miles will be clear in 2017, “and we will begin to put this new spectrum to use to benefit T-Mobile and MetroPCS customers later this year”.
Analysts have questioned the payback time for the newly-acquired frequencies, due to the lack of supporting smartphones. But in a conference call, T-Mobile CEO John Legere (pictured) was characteristically bullish.
The CEO said: “We kick-started the ecosystem more than a year ago, and as a result Ericsson and Nokia have already announced radio equipment availability, and Qualcomm has announced chipsets.”
“On the handsets, we will have Samsung devices by the holiday season, and other OEMs are making plans,” he continued.
Profit and revenue jumps
The company reported a profit of $698 million in Q1 2017, a 46 per cent year-on-year increase, on revenue of $9.6 billion, an 11 per cent year-on-year climb.
Service revenue of $7.3 billion was up 11 per cent. The company said it expects this to mark the 12th consecutive quarter it led its rivals in terms of year-on-year growth.
T-Mobile ended the first quarter with 72.6 million customers, including 1.1 million additions in the quarter – its 16th consecutive period with more than 1 million adds.
Unsurprisingly, Legere was quick to take the fight to his rivals – with Verizon firmly in his sights this time around. “In a quarter where we forced everyone else to follow our move to unlimited, T-Mobile kicked ass [sic],” he said.
“Verizon reported a disaster of a quarter, with nearly 300,000 postpaid phone losses despite all the hype around their launch of unlimited plans. Ouch, that’s really got to be embarrassing.”
The CEO also said the move to unlimited is causing problems for its rival’s network – already.
“Since launching unlimited, the Verizon network has got noticeably slower – slower than even AT&T in recent weeks. Which shows once again, we have the only network built for unlimited.”
He continued: “I guess we now know why Fran [Shammo] was saying Verizon customers didn’t need unlimited plans before he left – he knew the Verizon network couldn’t handle it.”
Unsurprisingly, the shape of the US telecoms and media industry was the subject of several questions, with Legere taking the opportunity to share his views.
With it coming up for four years since T-Mobile US in its current guise was created (through its deal with MetroPCS), and continued strength in its results, the CEO said this time around it would be entering talks “not from a hostage standpoint”.
“We should be clear: there are strategic possibilities between wireless companies, cable players, adjacent industries, internet players, that should be thought about because they drive great value for shareholders, and also new opportunities for customers.”
“There are some players that have been clear that they need to do something. Whether it be Dish, or Sprint, or I’d argue Comcast, they need to do something to complete their hand.”
When pushed further, he continued: “I’ve always told you, I think Dish has access to good content and spectrum. I think Sprint has an awful lot of scale and a good customer base, and something that would be interesting to take a look at. I think that the US will ultimately converge, and that a national footprint around cable and wireless needs to be created at some point.”
“From a standpoint of Washington, in anything that I would want to do with T-Mobile that included some other player, I’m very comfortable that we could make a case that it’s in the best interest of customers, of the country, of the industry, versus the alternative of the status quo,” Legere argued.