T-Mobile adds fewer wireless subscribers than expected amid intense competition

Feb 11 (Reuters) - T-Mobile added fewer wireless subscribers in the fourth quarter than analysts had expected, as rivals extended aggressive deals and offers to lure customers.

 

Shares of the company fell about 3.4% in premarket trading on Wednesday.

 

During the October-December period, telecom operators typically ramp up promotions around Black Friday and Cyber Monday, offering steep discounts on devices and plans to capitalize on holiday shopping.

 

Verizon, under its new CEO who has been working on the company’s turnaround, added its highest quarterly wireless subscribers in six years during the fourth quarter, thanks to deals such as four phone lines for $100 per month.

 

"There was heightened device-centric competitiveness from one of our principal competitors, who was trying to get some headline post-paid phone growth," T-Mobile finance chief Peter Osvaldik told Reuters.

 

T-Mobile still added 962,000 monthly-bill-paying phone customers in the quarter, the highest among the big three U.S. wireless carriers. But the number fell short of the 981,330 additions expected by analysts polled by FactSet.

 

The churn rate, the percentage of customers who discontinue service, stood at 1.02% for T-Mobile’s postpaid services, compared with 0.92% a year earlier.

 

Total revenue came in at $24.33 billion, compared with estimates of $24.11 billion, according to data compiled by LSEG.

This was helped by more customers opting for T-Mobile’s premium plans that bundled subscriptions for Netflix and Hulu.

 

"We continue to see new customer accounts... taking our premium plans at 60% take rates," Osvaldik said.

T-Mobile projected annual adjusted free cash flow between $18 billion and $18.70 billion, below analysts’ average expectation of $18.90 billion, according to Visible Alpha.

 

The cash flow guidance was likely impacted by higher integration costs related to the company’s merger with UScellular.

(Reporting by Harshita Mary Varghese in Bengaluru; Editing by Shinjini Ganguli)