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What You Can Expect from T-Mobile's 1Q17 Earnings

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Part 2
What You Can Expect from T-Mobile's 1Q17 Earnings PART 2 OF 8

Inside T-Mobile’s Revenue: Projecting Growth for 1Q17

T-Mobile’s revenue in 1Q17

Wall Street expects T-Mobile’s (TMUS) revenue to rise ~12.0% YoY (year-over-year) and to reach ~$9.6 billion in 1Q17. In 4Q16, T-Mobile generated total revenues of $10.2 billion, beating the analysts’ estimate of $9.8 billion. The main reason for this increase was the strong ~10.5% growth in service revenue, from $6.6 billion in 4Q15 to $7.2 billion in 4Q16.

Inside T-Mobile&#8217;s Revenue: Projecting Growth for 1Q17

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The growth in T-Mobile’s service revenue was due to the increase in its subscriber base, and success with its MetroPCS prepaid brand and “Un-Carrier” plan initiatives. Its equipment revenue rose ~78.4% on a YoY basis, from $1.5 billion in 4Q15 to $2.7 billion in 4Q16, as the company promoted its equipment installment plans. In installment plans, users pay for the devices in monthly installments.

Other significant US wireless carriers in 4Q16

In 4Q16, Verizon Communications’ (VZ) wireless revenue fell ~1.5% YoY to reach ~$23.4 billion, while AT&T’s (T) wireless revenue from domestic operations fell ~0.7% YoY to ~$18.8 billion. During the same quarter, Sprint’s (S) revenue from its wireless component rose ~6.5% YoY to $8.2 billion. T-Mobile thus managed to grow the most among peers in 4Q16.

Continue to the next part for a discussion of T-Mobile’s expected adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) in 1Q17.

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