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T-Mobile Adds 1.5 Million More Customers, Swings to Profit on Spectrum Sale

It sold 6.2 million smartphoness, up from 4.3 million a year ago, but a drop from the 6.9 million smartphones it sold in the prior quarter.

T-Mobile said Thursday that it added a further 1.5 million customers to its network in the second quarter, making this the fifth straight quarter of million-plus customer gains.

The company posted a net profit of $391 million, or 48 cents per share, thanks in large part to a $731 million gain from a spectrum license deal with Verizon.

Total revenue, including both service and device sales, was $7.2 billion, up five percent from the first quarter and 15 percent from the second quarter of last year. The company lost $54 million, or two cents per share, on revenue of $6.2 billion in the year-ago quarter.

“We have completely reversed T-Mobile’s trajectory and started a revolution that is changing the rules in wireless,” CEO John Legere said in a statement.

Of the 1.5 million total new customers, the number of core postpaid customers were 908,000, including 579,000 phone lines and 329,000 mobile broadband lines, mostly tablets. With the new additions, T-Mobile now has more than 50 million customers in total.

Last quarter, T-Mobile gained 1.3 million new postpaid customers, but swung to a loss amid the costs of grabbing the new subscribers.

The company sold 6.2 million smartphones. That’s up from 4.3 million a year ago, but a drop from the 6.9 million smartphones it sold in the prior quarter. Smartphones were 93 percent of phone sales, up a percentage point from the prior quarter and up from 86 percent of sales a year ago.

T-Mobile also said it now expects to add between 3 million and 3.5 million new core customers for its T-Mobile brand this year, up from its prior guidance that it would add 2.8 million to 3.3 million such customers.

“Over the last five quarters, we’ve turned a declining business into a growth business simply by listening to our customers,” Legere said on a conference call.

Legere also promised the next “Un-carrier” initiative would come later this summer. Last month, the company announced a seven-day iPhone “test drive” as well as a move that allows customers to stream audio from several major music services without having that count against their data limits.

“We will continue to innovate,” Legere said.

Asked about why the company would consider a merger with Sprint when it is growing and Sprint is losing customers, Legere noted that the wireless business remains a scale game long term.

But he added that the company has a path to profitability without needing to do a deal.

“The company is not in need of doing something to be successful in the short to medium term,” Legere said.

Legere also encouraged financial analysts to keep writing reports saying that T-Mobile’s moves aren’t financially sustainable.

“Another quarter or two of our competitors thinking that would be great,” he said.

T-Mobile net customer additions Q214

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