T-Mobile adds 260,000 net postpaid accounts in Q1 2021

Analysts were pleased with T-Mobile’s first quarter 2021 earnings in which the company beat estimates and raised its guidance.

For the first quarter, T-Mobile reported total revenues of $19.8 billion and net income of $933 million, resulting in $0.74 earnings per share. On April 1, 2020, T-Mobile purchased Sprint, so there are no apples-to-apples comparisons to the year-ago first quarter.

The company added 260,000 net new postpaid accounts and 773,000 postpaid lines during the quarter. The new account adds were twice over the previous quarter.

New Street analyst Jonathan Chaplin, said, “Postpaid phone net adds of +773,000 were way ahead of expectations (NSR: +553k; Consensus: +497k).

Although some have claimed that T-Mobile is giving away lines for free to make its numbers look better, the increase in accounts is a solid number. In the words of Chaplin, "Accounts don't lie."

For the full year, T-Mobile now expects total postpaid net additions to be between 4.4 million and 4.9 million, up from its original guidance of 4 million and 4.7 million. And T-Mobile raised its estimates on merger synergies from $2.8 billion to $3.1 billion. “We have so much confidence that we are raising 2021 guidance just one quarter into the year,” said T-Mobile CEO Mike Sievert.

The company has moved about 20% of Sprint customers to the T-Mobile network, and about 50% of Sprint customer traffic is now carried on the T-Mobile network, which is an increase of two times more than last quarter.

In terms of its network Sievert said it’s now delivering 5G to over 140 million people, and it’s well on its way to covering 200 million people nationwide by the end of 2021.

T-Mobile’s President of Technology Neville Ray said, “We've always talked about speeds hitting 400 Mbps plus on average, and that's a target clearly in our sights and one we would hope to get to by the end of this year.”

New revenue opportunities

“If there is a new revenue opportunity that will pay for new investments in spectrum and infrastructure, it is in enterprise,” said New Street’s Chaplin. “Look for private networks, mobile edge compute and mobile cloud all to become bigger themes.”

Sievert mentioned that T-Mobile commercially launched its 5G Home Internet offering to more than 30 million households at the beginning of Q1. On average, customers will get speeds of more than 100 Mbps.

RELATED: T-Mobile launches commercial 5G Home Internet

The 5G Home Internet offering is a direct competitive threat to cable. T-Mobile will ship a wireless router to a customer’s home and charge $60 a month, with router included. Customer service reps can help with installations if needed. T-Mobile also announced a new program — Hometown Experts — where technicians will be available in some 2,500 towns to help with service too.

The company is also making a concerted effort to garner new enterprise business. It’s increasing its specialized sales force and building tailored products for large enterprises and government customers. It recently introduced its WFX suite of products to help companies adapt to the hybrid workspace with secured calling, unlimited data and broadband products.

WFX includes T-Mobile Enterprise Unlimited and T-Mobile Home Office Internet, as well as T-Mobile Collaborate, which is a suite of mobile-first, cloud-based tools for businesses.

RELATED: T-Mobile pitches enterprise, government with 5G, new plans

CDMA shutdown

T-Mobile plans to shut down its 3G CDMA network on December 31, 2021, much to the ire of  Dish Network. Dish still needs T-Mobile’s CDMA network to serve its Boost Mobile prepaid customers.

On yesterday’s earnings Sievert said the CDMA sunset “is going really well; we're on track to do that on time as we've been communicating at the end of this year, beginning of next year.” He noted that T-Mobile has to migrate all its Sprint customers off that network. It's offering all its customers the opportunity to upgrade to a 5G phone for free. “We’re making the following commitment to Sprint customers, which is every single customer will be transitioned to a compatible device, or have the opportunity to transition to a compatible device before this upgrade happens at the end of the year,” said Sievert.