T-Mobile Gaining Subscribers but Takes COVID-19 Hit

T-Mobile said it had the most postpaid net adds of any of U.S. carrier in Q1, reporting for the first time since completing the buy of Sprint. Front-line employees “stepped up big” during COVID-19, but the company is feeling financial effects, new CEO Mike Sievert told analysts Wednesday. “As the nation starts to emerge” after COVID-19, the company expects customers to be looking for better value in a weakened economy and T-Mobile will benefit, he said. Temporary closing of many company stores meant lower subscriber adds, service and equipment revenue “in the very short term,” he said. Chief Financial Officer Braxton Carter said profit took a $117 million hit due to the cost of closing the Sprint deal, with an $86 million hit from the pandemic. T-Mobile will have a better view of pandemic effects as Q2 continues, he said. The company plans to provide full-year guidance on the Q2 call, Carter said. “What a crazy quarter this was,” Sievert said: “The crisis has highlighted how crucial connectivity has become to our daily lives.” The carrier is deploying 5G on 2.5 GHz spectrum from Sprint in New York and Philadelphia and 5G on 600 MHz now covers 215 million customers, T-Mobile said. Chief Technology Officer Neville Ray said T-Mobile will soon deploy on the 2.5 GHz band across the Northeast. Revenue was $8.7 billion, up 5% over last year, and profit $951 million, also up 5%. T-Mobile reported record low postpaid churn of 0.86% and free cash flow of $732 million headed into the first of two big spectrum auctions this year.