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Gauging T-Mobile’s Potential Revenue Growth for 3Q17

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Oct. 16 2017, Published 10:25 a.m. ET

T-Mobile’s revenue in 3Q17

Wall Street analysts expect T-Mobile’s (TMUS) total revenue to grow ~7.7% YoY (year-over-year) to ~$10.02 billion in 3Q17.

In 2Q17, T-Mobile’s total revenues beat the analysts’ consensus estimate of ~$9.8 billion, reporting total revenues of ~$10.2 billion—a 10.0% YoY increase—primarily driven by ~8.1% growth in services revenue, from $6.9 billion in 2Q16 to $7.4 billion in 2Q17.

The growth in T-Mobile’s wireless service revenues was a result of its expanding subscriber base and the success of its MetroPCS prepaid brand and “UN-Carrier” plan initiatives.

The company’s equipment revenues rose ~14.5% YoY, from $2.2 billion in 2Q16 to $2.5 billion in 2Q17, as the it promoted its EIP (equipment installment plans). Remember, in installment plans, users pay for the devices in monthly installments.

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Major US wireless peers in 2Q17

Verizon’s (VZ) wireless revenues fell ~1.9% YoY to $21.3 billion in 2Q17, while AT&T’s (T) wireless revenues from its domestic operations fell ~2.3% YoY to $17.5 billion. Meanwhile, Sprint’s (S) revenues from wireless grew ~2.8% YoY to $7.8 billion. This suggests that T-Mobile has managed to grow the most among its major competitors.

In the next part of this series, we’ll assess T-Mobile’s anticipated adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) in 3Q17.

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