- T-Mobile added 495,000 new phone customers in Q1, but that wasn’t enough to please Wall Street as shares tumbled
- The operator’s 5G Advanced network is now nationwide
- Much of Thursday’s earnings call focused on fiber and future plans in the space
Sometimes you just can’t get what you want.
Despite T-Mobile’s decent Q1 2025 performance and its overabundance of “best” and “record-breaking” sprinkled throughout its earnings report, the carrier’s stock was down more than 10% Friday morning.
Apparently, T-Mobile didn’t have the “blowout quarter” that some investors expected. The main culprit appears to be in net customer additions. Even though T-Mobile added 495,000 phone customers in the first quarter, that fell short of Wall Street consensus estimates of 502,000 phone net adds, causing the sell-off in shares.
Still, the “un-carrier” wasn’t wrong about leading the pack as it declared Q1 its best first quarter ever. Earlier this week, AT&T reported postpaid phone net adds of 324,000 and Verizon recorded a net loss of 289,000 postpaid phone customers in Q1.
T-Mobile also remains far ahead of its rivals in 5G network advancements. T-Mobile CEO Mike Sievert used Thursday’s earnings call to announce the nationwide deployment of 5G Advanced. The technology, which rides on T-Mobile’s 5G standalone (SA) core, will enable better video streaming over 5G, among other things.
T-Mobile was the first to market with a 5G SA core and is now first with 5G Advanced nationwide. The deployment means it’s able to offer slick new revenue-generating (it hopes) services like dynamic network slicing, lower latency and more efficient IoT throughput.
“5G Advanced is faster and more dynamic and more efficient,” Sievert said, making it better equipped to serve business and government customers with network slices. He also noted that T-Mobile achieved a record 6.3 gigabits per second download speed in a recent field test.
Beyond that, not a lot was said about 5G Advanced specifically as multiple analysts wanted to know more about T-Mobile’s fiber strategy.
T-Mobile and fiber, fiber, fiber
With the completion of the Lumos transaction on April 1, T-Mobile is set to officially launch T-Fiber later this quarter, something that’s been in the pilot stage the past two years, Sievert said. Combined with the Metronet transaction, the company expects to cover 12 million to 15 million households with fiber by the end of 2030.
Sievert provided some explanation as to what’s behind the fiber strategy. Namely, why are they doing this?
T-Mobile’s general premise is actually quite different from others in the space that are focused on so-called convergence. There’s some of that in play here but not much, according to Sievert.
“The much bigger question for us is whether or not we can – based on our know-how and our embedded investments and our big customer base and our 5G network and our data and our strength of our brand and our distribution – just quite simply, on its own, make a superior return in wireline fiber than a purely disinterested financial investor could. And we think we can,” he said.
Asked about T-Mobile’s interest in acquiring a cable asset – rumors have been swirling that it might make a play for Charter Communications – he didn’t want to “speculate on rumors and all that stuff,” he said.
But he added: “I think we’ve mostly shown our hand here. Look, we’re a growth company … What you see is our interest in 5G broadband that has made us the fastest growing overall broadband company in America for 13 quarters … It’s a growth strategy.”
In a report for investors after the call, New Street Research analysts noted Sievert’s emphasis on growth and pointed out cable is not exactly a growing market. “After seeing Comcast’s results today, a lot would have to change in the fortunes of cable for it to not be a significant tax on growth at T-Mobile,” the analysts wrote. “This change will eventually come, but not in the next two years. We think this is the single biggest impediment to a deal.”
T-Mobile’s take on tariffs
Of course, T-Mobile was asked the inevitable question about tariffs and their likely impact on handset pricing.
Similar to what Verizon and AT&T execs said earlier this week during their earnings calls, Sievert said the handset costs will be passed onto the consumer.
“We certainly understand the goals of the administration,” he said. But tariffs are obviously a moving target and it’s not clear how much they will affect the handset market.
To the extent that it does, “I think we're going to see that the customer is going to wind up having to bear that cost,” he said. That could lead to a slowdown in handset upgrades and have other effects that “we would adjust for.” Right now, “we haven't seen anything that causes us to think there's any kind of material impact to our business coming either way,” he said.
Q1 By the Numbers
Net income increased 24% year-over-year to $3.0 billion. Adjusted free cash flow increased 31% year-over-year to $4.4 billion.
Postpaid phone churn of 0.91% was slightly higher than the first quarter of 2024, when it was 0.86%.
Despite shares tumbling on lower net adds than expected, T-Mobile said it still expects postpaid net customer additions in 2025 to be between 5.5 million and 6 million, maintaining its highest-ever guidance at this point in the year.