T-Mobile dropped a fourth quarter earnings report on Wednesday that blew analyst expectations out of the water with earnings per share of 34 cents, 1.3 million postpaid net additions and a net income that nearly tripled year over year to hit $297 million.
The results far exceeded analyst predictions of 18 cents earnings per share and net income of $134.5 million, sending shares on the rise just over two percent in morning trading. Earnings per share for the full year 2015 were 82 cents.
Out of its 1.3 million postpaid net additions, T-Mobile said 917,000 were postpaid phone adds. The total number of net additions for the year was 2.1 million, according to the report. T-Mobile also added 469,000 prepaid net additions, the majority of which it said came from its MetroPCS brand.
The Un-carrier’s net postpaid phone addition figures topped Verizon’s 713,000 smartphone adds, AT&T’s 526,000 postpaid net adds and Sprint’s 366,000 postpaid phone net additions for the quarter.
T-Mobile’s postpaid churn was 1.46 percent, down 27 basis points year over year for the quarter.
The Un-carrier also saw double-digit year-over-year growth in both service revenues and EBITDA, which were up 11.7 percent and 30.2 percent, respectively, for the quarter. Average revenue per user (ARPU) was up sequentially from $47.99 in the third quarter to $48.05 in the fourth, but was down less than one percent from $48.26 year over year. Total revenues were up 1.1 percent year over year for the quarter and 8.4 percent year over year for the full year 2015.
Device sales were also up year over year from 9 million units in the fourth quarter 2014 to 10.8 million units in the fourth quarter 2015.
During Wednesday morning’s earnings call, T-Mobile CEO John Legere said the Un-carrier felt “pretty damn good” about the results.
T-Mobile, which has been working furiously to expand its LTE network across the country, also revealed Wednesday that it has entered into several new agreements to acquire additional 700 MHz A-Block spectrum that will cover an additional 48 million POPs. T-Mobile said Wednesday the licenses cover areas from coast to coast and will bring the Un-carrier’s low-band coverage to a total of 258 million POPs.
New market launches in the fourth quarter included the cities of New York, Seattle, Portland, and Orlando, T-Mobile said, and plans are in place to continue the roll out to new 700 MHz sites in Boston, San Francisco, Phoenix, San Diego and Las Vegas in 2016.
The Un-carrier said it now has a total of 305 million POPs covered by its 4G LTE service, up from 265 million covered in 2014.
T-Mobile said nearly 50 percent of its call volumes now travel on Voice over LTE (VoLTE), with an additional five percent carried over Wi-Fi.
Legere said the early results of T-Mobile’s Binge On offerings are “astonishing” and said the service – along with Music Freedom and other initiatives – is one of ways the Un-carrier is differentiating itself as a brand that eliminates “customer pain points.”
“I maintain that Binge On will be one of the biggest things we’ve ever done as a company,” Legere said.
Additionally, since the introduction of Binge On, T-Mobile said it has seen a 10 to 12 percent reduction in network traffic.
Moving through this year, the Un-carrier said Wednesday it is aiming to build upon existing momentum to gain a total of 2.4 million to 3.4 million postpaid net additions, and is targeting adjusted EBITDA of $9.1 billion to $9.7 billion. T-Mobile said it is looking at $4.5 billion to $4.8 billion in cash capital expenditures in 2016.
T-Mobile said it is planning to lean toward Equipment Installment Plan (EIP) offers early in the year instead of promoting leasing, but said that move was not indicative of an overall strategy shift.
Legere said the company will continue to utilize both its EIP and Jump! On Demand offerings as tools to meet consumer demands as they arise throughout the year.
When asked whether it would consider launching its own content streaming service akin to Verizon’s go90 product, T-Mobile executives said they would let consumer demand dictate their next moves.