(Reuters) - T-Mobile forecast stronger-than-expected annual subscriber growth driven by increased demand for its affordable premium 5G plans on Wednesday, boosting its shares 7% in premarket trading.
T-Mobile Anticipates Strong Subscriber Growth Driven by Premium Plans
By Harshita Mary Varghese
(Reuters) -T-Mobile said on Wednesday it expected its wireless subscriber growth this year to exceed Wall Street estimates by more than double, due to strong demand for its premium 5G plans, sending its shares up more than 7% in early trading.
The forecast followed a strong fourth quarter in which the U.S. telecom major posted industry-leading postpaid phone net additions of 903,000, which easily surpassed FactSet estimates of 858,500.
T-Mobile's Go5G Next and Go5G Plus plans have resonated with customers as they bundle high-speed internet with popular services such as Netflix and Apple TV+. Its fourth quarter also benefited from Black Friday deals and the AI-powered iPhone series, which led more customers to upgrade their phones.
The company expects postpaid net customer additions to be between 5.5 million and 6 million in 2025, compared with an estimate of 2.7 million, according to FactSet.
CFO Peter Osvaldik told Reuters that the company's premium plans and holiday promotions enticed customers from rival networks to switch over in the fourth quarter.
T-Mobile continues to see more than 60% of new customers opting for its value-packed top-tier plans, Osvaldik said.
The wireless carrier has also tried to expand its customer base by improving coverage and targeting smaller markets and rural areas. It offers fixed wireless access as an alternative internet solution in regions where fiber optic infrastructure is either sparse or unavailable.
The results cap a strong quarter for U.S. wireless providers, with AT&T and Verizon Communications also topping subscriber addition estimates.
T-Mobile's postpaid phone churn rate, which indicates the percentage of customers who discontinued their services, stood at 0.92% in the reported quarter - slightly higher than the 0.86% seen in the previous quarter.
The company added 428,000 new high-speed internet customers, beating estimates of 402,000, according to Visible Alpha. Its revenue in the fourth quarter was $21.87 billion, above the estimate of $21.31 billion, according to LSEG data.
(Reporting by Harshita Mary Varghese in Bengaluru; Editing by Pooja Desai)
