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The three largest US carriers are scrapping it out over a smaller pool of would-be customers as each tries to expand into high-speed internet, as smartphone sales fail to keep the pace of years past, Reuters reported.
T-Mobile, the second-largest carrier in the US, came out on top in terms of analyst expectations in Q3, beating FactSet forecasts for revenue, MarketWatch reported, while AT&T and top dog Verizon both fell short of expectations, according to the Wall Street Journal and Reuters. Verizon blamed high interest rates for fewer customers upgrading their phones, which depressed revenue gains from an increase in subscribers, Reuters reported.
T-Mobile’s 865,000 net new subscribers for non-prepaid plans also beat analyst forecasts by more than Verizon beat theirs, according to MarketWatch, while AT&T added fewer than analysts had expected, the Wall Street Journal reported. All three carriers beat Wall Street forecasts for earnings per share, although T-Mobile’s earnings surprise was the largest by far.
The quarter’s net additions were the most “in a decade,” CEO Mike Sievert said in a statement, and T-Mobile had its lowest-ever number of customers dropping the service in the third quarter. Both helped “[translate] into outsized financial results and empowered us to raise our 2024 guidance yet again,” Sievert said.
As they try to keep investors happy with large-enough subscriber gains, wireless companies also have to manage the cost of expanding into high-speed internet, according to Reuters.
Case in point: Verizon’s high range for 2025 capital spending overshot analyst expectations, and its stock fell more than 4% after reporting on Tuesday. Verizon’s deal to acquire Frontier Communications, a fiber internet-focused telecom, is also running into opposition from Frontier’s shareholders, the Journal reported.
T-Mobile “has pieced together at least five partnerships with fiber-optic internet providers,” according to a WSJ report this summer, but those acquisitions, along with spending on new fiber infrastructure, “would compete for cash with dividends and stock buybacks” from which investors are expecting $60 billion by mid-2026.