T-Mobile Boosts Profit, Accounts as Network and Offers Resonate

(Bloomberg) -- T-Mobile US Inc. added more total customer accounts in the third quarter than analysts had expected, showing its slate of offers and loyalty incentives are resonating with customers.

The Bellevue, Washington-based carrier added 274,000 net monthly accounts, which include mobile phone and broadband internet, in the period, the company said in a statement on Wednesday. That compared with the 251,000 Wall Street was expecting, according to data compiled by Bloomberg. It's also seeing more revenue per account, with an average of $155.73 in the quarter, up 4% from a year earlier.

That helped boost profit 27% from a year ago to $3.5 billion. Earnings per share of $3.22 beat estimates of $2.93, according to data compiled by Bloomberg.

T-Mobile and its main two telecom rivals have been under pressure as the market factors in a potential new competitor in Elon Musk's SpaceX, which is emerging as a potential fourth national wireless carrier. To stay competitive, T-Mobile rolled out new plans on Monday that allow customers to pick and choose benefits like streaming, food delivery and device promotions. It has also found success in fostering customer loyalty with its T-Mobile Tuesdays program, which offers customers weekly freebies.

Musk's efforts will require billions of dollars in investment and take years before a new wireless phone carrier is up and running. But the Big Three are already positioning themselves to try to stay ahead. T-Mobile has an existing partnership with SpaceX's Starlink internet service that gives customers access to satellite coverage that can fill gaps in T-Mobile's ground-based network, especially in extremely remote areas.

T-Mobile Chief Technology Officer John Saw recently tried to temper any enthusiasm for Musk's ambition by explaining that SpaceX's recent purchase of 800 MHz spectrum is far from the "last critical piece" needed to create a viable network. "There's a big difference between owning spectrum and delivering a great mobile experience to millions of customers," Saw wrote in a recent post on LinkedIn.

T-Mobile no longer discloses changes in wireless customer additions as a separate metric. But it said service revenue, which include mobile phone plans and on-premises internet, increased 9% from a year ago $16.3 billion, a touch ahead of estimates.