T-Mobile US Inc, the fourth largest wireless carrier in U.S., reported third-quarter sales that surpassed analysts' estimates. Its cheaper service plans and phone-upgrade strategy have made it possible for such an overwhelming sales report.
TMUS reported that sale rose to $6.69 billion which is an increase of 8.7 per cent after adjusting the account for T-Mobile's merger with MetroPCS Communications Inc.
Initially analysts had projected $6.58 billion in the average estimates compiled by Bloomberg.
Six months ago, T-Mobile merged with MetroPCS. After that it added 648,000 new monthly subscribers, which surpasses the 401,000 average estimate gaining for second straight quarter.
Offers such has zero-down financing on phones and $10-a-month service that lets customers upgrade their devices more frequently has managed to attract more subscribers. Its $10-a-month program is also now adopted by its rivals such as Verizon Wireless, AT & T Inc, and Sprint Corp.
"It's surprising how quickly the new offers took hold with consumers," said Todd Rethemeier, an analyst at Hudson Square Research in New York. "The true test will be a few quarters out, when we'll see if they are able to hang on to these new customers."
The expectations of the company are to add 1.6 million to 1.8 million subscribers this year, which is certainly up from a earlier forecast of 1 million to 1.2 million.
T-Mobile, which is 74 percent owned by Deutsche Telekom AG (DTE), also got benefited from the addition of iPhones few months back.
About 5.6 million smartphones were sold by T-Mobile, representing nearly 90 percent of total phones sold in the quarter. The company said that 78 percent of its customers were now smartphone owners.
