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T-Mobile Adds 2.35M Q3 Subs, Sells 6.9M Smartphones

Bellevue, Wash. — T-Mobile added 2.35 million net new subscribers in the third quarter, the sixth consecutive quarter of more than 1 million net adds and almost matching the first quarter’s 2.39 million net adds.

The net adds included 1.4 million retail postpaid net adds, the company’s best quarter ever for branded postpaid net adds, plus branded prepaid, wholesale, and M-to-M net adds.

The carrier nonetheless posted a net loss and declining operating income.

T-Mobile’s retail postpaid net adds exceeded AT&T’s third-quarter retail postpaid net adds of 785,000 but fell slightly behind Verizon’s 1.52 million. However, the majority of Verizon’s postpaid net adds — 1.1. million — and 45 percent of AT&T’s postpaid net adds consisted of less lucrative tablet activations.

In contrast, 1.2 million of T-Mobile/s 1.4 million postpaid net adds were phones, and only 204,000 were mobile broadband devices, including tablets.

With the third-quarter gain, T-Mobile raised its 2014 forecast for retail postpaid subscriber net adds to between 4.3 million and 4.7 million, up from a previously forecast 3 million to 3.5 million.

The carrier’s subscriber base came to 45 million at the end of the quarter.

Among the carrier’s retail postpaid subscriber base of 24.8 million, 84 percent — or 20.8 million — were on Simple Choice plans with no handset subsidy or contract, up from the previous quarter’s 80 percent and the year-ago’s 61 percent. A total of 8 million retail postpaid customers, or 39 percent, were enrolled in the company’s JUMP handset-upgrade program.

Smartphones accounted for 93 percent of all retail prepaid and postpaid phones sold, or 6.9 million units, while mobile broadband devices, including tablets, came to only 200,000, and non-smartphones came to 600,000.

Total device sales, including broadband modems and tablets, came to 7.7 million units, up from the year-ago 5.6 million.

Despite the subscriber gains, the carrier posted a $94 million net loss, the fifth net loss out of the past six quarters, but the company posted operating income of $49 million, down from a year-ago $297 million and down from the second quarter’s $962 million.

For the nine-month period, the company posted net income of $146 million, up 166 percent from the year-ago $55 million. Nine-month operating income came to $983 million, up 14.7 percent from $857 million.

Total revenues rose 9.9 percent to $7.35 billion from the year-ago $6.69 billion.

In outlining its network-upgrade rollout, the carrier said its LTE network covers 250 million people, reaching its year-end goal ahead of schedule, and expects to expand that to 260 million by year’s end, 280 million by mid-2015, and 300 million by the end of 2015.

The company has rolled out Wideband LTE, or markets with an LTE bandwidth of 15+15MHz, in 19 markets and expects to hit 26 by year’s end. These markets regularly achieve 70Mbps peak speeds with real-word speeds exceeding 145Mbps.

Average download speeds throughout the LTE network were 18.8Mbps compared to Verizon’s 16.8Mbps and AT&T’s 14.3Mbps, and Sprint’s 9.6Mbps, T-Mobile said. It’s the third consecutive quarter that T-Mobile came out on top, the company said.

The carrier is also rolling out 700MHz spectrum for LTE, owning or having agreements to own 700MHz in markets reaching 176 million people, including nine of the top 10 markets and 22 of the top 30. The first 700MHz cell sites are up and running, and several handsets with the band are available, including the Samsung Note 4.