T-Mobile Beat Estimates, Sprint Aggressive on Promotions



T-Mobile’s earnings in 4Q15

T-Mobile (TMUS) reported its 4Q15 results on February 17, 2016. T-Mobile had adjusted EPS (earnings per share) of ~$0.25 in 4Q15 compared to ~$0.20 in 4Q14. Moreover, the company’s earnings were above Wall Street’s expectations in 4Q15. On February 17, T-Mobile’s stock price increased by ~1.1% from the previous day’s close.

Service revenue of T-Mobile’s (TMUS) postpaid segment grew robustly by ~15.2% YoY (year-over-year) to ~$4.3 billion in 4Q15. The increase in this revenue stream of the carrier was driven by solid postpaid customer growth. By the end of 4Q15 and in a saturated US wireless market, T-Mobile’s postpaid subscribers grew by a significant ~16.6% YoY to reach ~31.7 million.

In the last quarter, Verizon (VZ), AT&T (T), and Sprint (S) also gained postpaid subscribers.

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Sprint introduces unlimited plan

Sprint recently initiated a promotional push for its unlimited plan where families can get four lines of talk, text, and unlimited data for $37.50 per line, saving them $360 a year. According to the carrier, the promotional pricing for the first line is $75, two lines would cost $120, three lines would cost $150, and the fourth line is free. For the fifth through tenth lines, the customer would pay $30 per additional line.

Instead of taking direct exposure to the stocks of players in the US telecom industry, you may consider taking diversified exposure to this space by investing in the SPDR S&P 500 ETF (SPY). The ETF held a total of ~2.4% in some of the US telecom companies at the end of December 2015.


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