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T-Mobile US adds 1.1M customers on iPhone debut, contract initiatives

The fourth largest U.S. carrier posted strong results, saying it had the strongest growth in four years thanks to in part its Uncarrier contract-killing initiatives.
Written by Zack Whittaker, Contributor
Image: T-Mobile

Reporting for the first time as a public company, T-Mobile is back in the subscriber black, after reporting 1.1 million net new customer additions during its fiscal second quarter.

The fourth largest U.S. cell network, which completed its merger with MetroPCS in May and changed its name to T-Mobile US, also added another 8.9 million customers from the acquisition. In terms of raw growth, 685,000 new customers landed from its post-paid base.

Two reasons were pointed at for the jump in customers: the introduction of the iPhone in March, along with the company's still fresh Uncarrier and Jump! programs, which allow customers to cut themselves free from long-term contracts and upgrade more regularly, respectively.

"T-Mobile's Uncarrier approach has clearly resonated with consumers. By fixing the things that drive them mad, like contracts and upgrades, and freeing them from the two-year sentences imposed on them by our competitors, they are choosing the new T-Mobile in unprecedented numbers," said T-Mobile chief executive and president John Legere in prepared remarks.

iPhone sales accounted for roughly one-in-three smartphones sold, excluding MetroPCS. T-Mobile US cited Samsung's Galaxy S4 also as a revenue driver. In total, sales reached 4.3 million total smartphone units, up from 71 percent to 86 percent of all units sold. 

The company said it was "ahead" of its plan to bring 4G LTE with 157 million covered over 116 metropolitan areas in the U.S.

The firm's adjusted earnings before tax and interest (EBITDA) fell by 16 percent compared to the same quarter a year ago to $1.1 billion, attributed to higher promotional spending and "significantly higher gross additions."

Total revenue rose by more than one-quarter thanks to MetroPCS' addition to T-Mobile's finances from May. Record smartphone sales also played a part, the firm said.

Looking ahead, T-Mobile's full fiscal year adjusted earnings, including MetroPCS, are expected to be around $5.2 billion to $5.4 billion.

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