T-Mobile earnings: Phoning it in
The big number: T-Mobile is doing more with less. Even with the costs of its merger with Sprint on the books during the quarter, net income was up about 5% over the same period last year, while revenue was only up about 0.3%.
People are talking: While most people in the U.S. have been stuck at home, T-Mobile's network has generally held up well. "While the COVID-19 pandemic has adversely impacted, and will continue to adversely impact, T-Mobile's business and operating results, the company continues to work to ensure the health and safety of its employees, the ongoing reliability of its network, which continues to perform strongly and function with minimal interruptions, and the ability to serve and connect our customers," the company said in a release.
Opportunities: T-Mobile now has over 68.5 million customers, up from 64.7 million in the same quarter last year. And with the recent merger with Sprint, that's only likely to increase with more users able to sign up in more parts of the country. "We expect to be able to rapidly build the world's best 5G network, accelerating innovation and increasing competition in the U.S. wireless, video and broadband industries," the company said.
Threats: Beyond the merger, one of T-Mobile's biggest bets in recent years has been its massive investment in creating a 5G network. The question will be whether it'll win over (or retain) subscribers with its new network — especially during a recession, given that 5G handsets tend to be more expensive than their LTE counterparts. The company is pushing ahead with its 5G rollout, even with a large swathe of the country stuck inside.
Like others, T-Mobile said it has also lifted data caps and overage charges on many of its users during the pandemic. Will that source of revenue come back in the future when the dust has settled?
The power struggle: It may feel like a lifetime, but T-Mobile and Sprint completed their merger just five weeks ago. The two companies are still in the process of integrating their businesses — and networks. T-Mobile recently launched its first 5G sites using Sprint's spectrum in Philadelphia and New York, but still has many cities (and everything in between) left to go.
T-Mobile also said in its earnings that "more than 80% of Sprint postpaid customers have handsets that are compatible with the T-Mobile network today." That means around 20% of the customers it just acquired are likely going to need to be walked through the process of getting a compatible phone in the near future.
Mike Murphy ( @mcwm) is the director of special projects at Protocol, focusing on the industries being rapidly upended by technology and the companies disrupting incumbents. Previously, Mike was the technology editor at Quartz, where he frequently wrote on robotics, artificial intelligence, and consumer electronics.