T-Mobile US added more customers than analysts estimated and raised its forecast for subscriber growth as the carrier continues to challenge rivals with cheaper plans and promotions.
The company added 908,000 monthly branded customers, which exceeded the 717,000 estimated in a Bloomberg survey of eight analysts. The Bellevue-based carrier is majority owned by Deutsche Telekom AG.
T-Mobile ended its streak of four straight quarterly losses thanks to a $731 million gain from swapping spectrum with Verizon. The company reported second-quarter net income of $391 million, or 48 cents a share, compared with a loss a year ago. Without the spectrum swap, T-Mobile would have posted a net loss.
NEW YORK — T-Mobile US Inc., the most eligible company in the U.S. wireless industry, has another suitor on its hands. Upstart French telecom company Iliad SA on Thursday said it has offered $15 billion for a majority stake.
T-Mobile US added more customers than analysts estimated and raised its forecast for subscriber growth as the carrier continues to challenge rivals with cheaper plans and promotions.
The company added 908,000 monthly branded customers, which exceeded the 717,000 estimated in a Bloomberg survey of eight analysts. The Bellevue-based carrier is majority owned by Deutsche Telekom AG.
T-Mobile ended its streak of four straight quarterly losses thanks to a $731 million gain from swapping spectrum with Verizon. The company reported second-quarter net income of $391 million, or 48 cents a share, compared with a loss a year ago. Without the spectrum swap, T-Mobile would have posted a net loss.
Iliad is injecting itself into the courtship of T-Mobile, the fourth-largest U.S. cellphone carrier, and Sprint Corp., the No. 3. Sprint has reportedly been in talks with T-Mobile for months, but no deal has been announced. Analysts believe U.S. regulators are likely to block the T-Mobile/Sprint pairing due to concerns that it would reduce competition and thus raise prices for consumers.
Iliad is much smaller than T-Mobile US, and it doesn’t have the financial might to buy the whole company. It’s offering $15 billion in cash for 57 percent of T-Mobile US, at $33 per share. That’s less than Sprint’s reported offer of around $40 per share.
Iliad, however, claims that the shares it doesn’t buy will be worth $40.50 each thanks to “synergies” between Iliad and T-Mobile, indicating that it thinks the combined business will be able to expand more rapidly or cut costs. However, cross-border deals in telecommunications rarely yield substantive synergies.
T-Mobile confirmed that it received Iliad’s proposal and said that it will have no further comment. Iliad said it did not have a response from T-Mobile’s board.
T-Mobile shares jumped $2.07, or 6.7 percent, to $33.01 after Iliad’s announcement, indicating that investors believe there’s some chance of an improved offer, either from Iliad or Sprint. The stock started moving up before the announcement, as The Wall Street Journal reported some details of the offer.
T-Mobile US is controlled by Deutsche Telekom AG of Germany, which owns 67 percent of the stock. A similar portion of Sprint’s stock is owned by Softbank Corp. of Japan.
Deutsche Telekom has tired of owning T-Mobile US. In 2011, it accepted a $39 billion offer from AT&T Inc., the No. 2 U.S. carrier. That deal was scotched by U.S. regulators.
Iliad noted that its offer would not raise the same antitrust concerns that come with a Sprint deal, and that Iliad and T-Mobile US are both industry mavericks. Under CEO John Legere, T-Mobile US has thrown out the standard two-year service contract and introduced new plans that allow for more frequent phone upgrades, a move quickly copied by the larger carriers. Iliad broke onto the French scene with the Freebox, a unit that combines Internet access, TV and phone service over broadband lines. In 2012, it started offering cellphone service as well.
Iliad has 5.7 million broadband subscribers and 8.6 million wireless subscribers.
Earlier Thursday, T-Mobile said its strong streak of customer recruitment continued in the second quarter, despite tough competition from AT&T, which has been cutting its prices. The Bellevue, Wash., company added 1.5 million devices to its network in the quarter, for a total of 50.5 million.
T-Mobile’s profitability was still weak, however. It posted net income of $391 million, or 48 cents per share, but that included a gain of $791 million from a spectrum deal with Verizon. T-Mobile has posted losses for the four previous quarters.
The company’s revenue was $7.2 billion, up 15 percent from a year ago.