T-Mobile US set its sights on disruption in new sectors, as executives noted increased network speeds enabled by a proposed merger with Sprint could allow it to offer a bundle of broadband, TV and wireless services.
During T-Mobile’s Q1 earnings call, COO Mike Sievert said the merger plan provides a path for the combined entity to offer average nationwide speeds of 450Mb/s. Such throughput, he added, will allow the new operator to not only become an effective competitor in the home broadband space, but also accelerate an IPTV initiative which started with T-Mobile’s acquisition of Layer3 TV in December 2017.
The combined entity will be “uniquely positioned” to participate across all three segments, he said.
Sievert noted the home broadband segment is particularly ripe for new competition, as 53 per cent of high speed broadband customers have only one choice in the market.
CEO John Legere (pictured) noted the ability to compete in new sectors was part of his merger pitch to regulators in Washington.
Analysts expressed scepticism the Sprint/T-Mobile tie-up will make it past regulatory scrutiny from the US Department of Justice and Federal Communications Commission (FCC). But Legere said initial meetings with FCC commissioners went “very well” and he saw in regulators a “willingness to listen to something that could be strong for consumers and America on many fronts”.
The CEO stressed his respect for regulators’ processes, but added he was eager to share the “detail and the data” to support T-Mobile’s talking points.
“We wouldn’t have come out with this unless we can show it and we can prove it,” Legere said.
Merger aside, T-Mobile continued to deliver solid metrics in Q1 2018.
Service revenue of $7.8 billion was up 6.5 per cent year-over-year and equipment revenue of $2.35 billion increased 15 per cent. Overall revenue grew 8.8 per cent to $10.5 billion, though net income declined to $671 million from $698 million in the year-ago period.
Post paid subscriber net additions of 617,000 were down from 798,000 in Q1 2017, but Sievert noted a higher proportion of those additions came from new accounts rather than existing customers who added lines. He said the trend is continuing the current quarter.