T-Mobile shareholders greenlight Sprint deal amid strong third quarter results
T-Mobile, the third largest wireless carrier in the US by subscriber count, posted impressive third quarter results Tuesday. The operator revealed $10.84 billion in profit and 774,000 net new monthly-billed subscribers — far above Wall Street estimates of around 628,000 net additions. Perhaps even better news for the wireless company's future, though, was its announcement that shareholder approval had come through for its acquisition of Sprint, the fourth largest American carrier.
Of course, there are still more regulatory approvals and closing conditions to wade through, but T-Mobile CEO John Legere told analysts that it is "making progress" and has received approval from half of the state commissions reviewing the deal, keeping it on track to close in the first half of 2019.
Once closed, the deal would result in a much larger third carrier that could better challenge AT&T and Verizon, though there are concerns about lessening competition in the market. T-Mobile itself is perhaps most excited to gain Sprint's wireless spectrum, which it argues will allow it to deploy a "broad and deep" nationwide 5G network available to customers at lower prices than its competitors.
Even as it becomes more of a certainty that this deal will go through, Sprint impressed financial analysts with far better financial results than expected, including 109,000 net phone subscribers during the second quarter (rather than the 22,000 estimated) and $8.43 billion total operating revenue (above the $7.97 billion estimate). In comparison, Verizon added a net 295,000 subscribers in the third quarter, and AT&T gained a net 69,000 subscribers. While that may seem significantly lower than T-Mobile, both actually beat analyst estimates with their numbers. As it stands currently, the large established players just can't expect to match the growth rate of the "uncarrier." It'll be fascinating to see how the industry changes if and when T-Mobile and Sprint combine.
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