(Reuters) - T-Mobile US Inc (TMUS.O) raised its forecast for customer additions for the year and Chief Executive John Legere said AT&T Inc’s (T.N) proposed plan to buy Time Warner Inc TWX.N could help T-Mobile to carve out more market share.
AT&T on Saturday proposed to buy Time Warner for $85.4 billion in a bid to acquire content to stream over its network to attract a growing number of online viewers.
“I would say the great news is (AT&T is) going to be further unfocused than they are now and the upside opportunity to continue to acquire businesses in the space for us is tremendous,” T-Mobile CEO John Legere said.
T-Mobile, the No. 3 U.S. wireless carrier, and smaller rival Sprint Corp (S.N) have been grabbing market share by gaining subscribers from market leaders AT&T and Verizon Communications Inc (VZ.N) through heavy discounting and promotions.
Legere also said he does not expect regulators to allow AT&T to exclusively deliver Time Warner’s content.
“AT&T may end up being a provider to us of content as opposed to anybody thinking that there is any possibility that they will exclusively use that content,” Legere said on a call with analysts.
Shares of T-Mobile, controlled by Deutsche Telekom (DTEGn.DE), were up 7.44 at $50.22 in midday trading after touching a nine-year high of $50.41.
“We see no need for T-Mobile or Sprint to do anything as a result of (AT&T’s) announcement and instead to keep doing what they are doing and that’s steal share from AT&T and Verizon,” Cowen and Company analyst Colby Synesael said in a client note.
T-Mobile US said it now expected to add 3.7-3.9 million branded postpaid customers, or customers who pay monthly bills, on a net basis this year, higher than its previous forecast of 3.4-3.8 million.
The company added 969,000 postpaid customers in the third quarter ended Sept. 30, up from 890,000 in the second quarter.
In contrast, AT&T lost customers in the quarter, while Verizon’s subscriber addition was well below analysts’ estimates.
T-Mobile said it benefited from the launch of Apple Inc’s (AAPL.O) iPhone 7 and an increase in branded prepaid customer migrating to postpaid plans.
T-Mobile’s net income surged to $366 million from $138 million, helped by after-tax spectrum gains of $122 million.
On an adjusted basis, it earned 27 cents per share. Total revenue rose 17.8 percent to $9.25 billion.
Analysts on average were expecting a profit of 22 cents per share and revenue of $9.42 billion, according to Thomson Reuters I/B/E/S.
Wells Fargo said the slight revenue miss was due to lower-than-expected equipment revenue partly due to T-Mobile’s “free” iPhone 7 promotion.
Reporting by Aishwarya Venugopal in Bengaluru; Editing by Saumyadeb Chakrabarty and Savio D'Souza