T-Mobile US Inc(NASDAQ:TMUS) CEO, John Legere, has confirmed plans to engage in merger talks once the US Federal Communication Commission lifts its ban, on April 27. The remarks come on the wireless company posting better than expected quarterly earnings and on experiencing customer growth.
T-Mobile Merger Talks
During the earnings call, the CEO reiterated that they are ready to explore all available options as one of the ways of accelerating growth.
“The inorganic and organic possibilities for the company are tremendous l. We are interested in looking at some of the possibilities, “said Mr. Legere.
The remarks do not come as a surprise given the way the third largest carrier in the US has been gaining ground as it looks to take on AT&T Inc. (NYSE:T) and Verizon Communications Inc. (NYSE:VZ). Network improvements and offering competitive prices have allowed the company to gain market share even as other carriers complain of saturation in the U.S wireless market.
Reports on Wall Street indicate that Sprint Corp (NYSE:S) is positioning itself for a possible merger with T-Mobile. There are also reports that T-Mobile is considering combining with other companies such as DISH Network Corp (NASDAQ:DISH) and Spectrum which has access to content. However, the carrier could still stay independent given that it was the winner of the just concluded airwaves auction where it placed a bid of $8 billion. The purchase allows the carrier to take the big boys head on, in every corner of the country.
T-Mobile Earnings Beat
A net income of $698 million in the recent quarter compared to $479 million a year ago all but reaffirmed T-Mobile growth trajectory. However, the carrier-lured customers from other carriers at slower pace, having added 914,000 new subscribers compared to 1.04 million a year earlier. Revenue, on the other hand, was up by 11%, coming in at $9.61 billion against Wall Street expectations of $9.67 billion.
T-Mobile’s impressive earnings were mostly helped by discounts and aggressive marketing campaigns that have allowed it to convert customers from other carriers. Verizon has already attributed its first ever loss on postpaid subscribers to competition.
T-Mobile was up by $1.23 after posting better than expected quarterly earnings closing the day at highs of $65.93 a share