Effective aggressive marketing strategy! T-Mobile (TMUS.US) Q2 user growth exceeds expectations, raises full-year performance guidance.

The second largest wireless operator in the United States, T-Mobile US Inc. (TMUS.US), announced in its latest financial report that despite a slow start to the year, the number of new users in the second quarter far exceeded analysts' expectations. The company, based in Bellevue, Washington, announced on Wednesday that it added 830,000 contract-based mobile phone users in the quarter, significantly higher than Wall Street's expectations of 714,000. Service revenue, excluding revenue from user device purchases and upgrades, increased by 6% year-on-year to $17.4 billion, slightly exceeding market expectations. Total revenue reached $21.13 billion, slightly higher than analysts' expectations of $21.02 billion. Diluted earnings per share increased by 14% to $2.84, surpassing analysts' average forecast of $2.69. After the financial report was released, the company's stock price soared by about 5% after hours. As consumers pay more attention to the value of their communication expenses, the three largest telecom operators in the United States are engaged in intense competition for users. AT&T and Verizon both expect to benefit from the cash flow improvements resulting from the Trump administration's tax and spending legislation by the end of the year. T-Mobile CFO Peter Osvaldik stated in a conference call on Wednesday that while the legislation "will not have a substantial impact on the company's expected cash reserves in 2025," it will release $1.5 billion in funds in 2026, which the company will deploy cautiously based on its capital allocation strategy. With its aggressive marketing strategies and value-added services, T-Mobile continues to expand its competitive advantage in the market. The company, which disappointed investors in the first quarter due to slower than expected user growth, successfully attracted price-sensitive customers with new plan combinations and a five-year price guarantee introduced in the spring. The company also announced that it will offer satellite messaging and data services at a lower price than originally planned, aimed at filling in mobile network dead zones. The service, which costs $10 per line per month, will even be available to non-T-Mobile wireless users. CEO Mike Sievert emphasized in the conference call that this service will help T-Mobile attract and retain users in the long term. He said, "It will be a highly attractive catalyst to deepen the relationship between users and T-Mobile, which will be extremely beneficial to us in many ways." Similar to its industry counterparts, T-Mobile is actively expanding into the home broadband market dominated by traditional cable TV companies. The company added 454,000 high-speed internet users this quarter, surpassing the market's expectations of 416,000. After completing the acquisition of fiber operator Lumos in April, T-Mobile officially launched its T-Fiber service in June, transitioning from reliance on wireless redundancy to providing physical fiber connections. Given that the joint venture with KKR to acquire fiber services provider Metronet is nearing completion, T-Mobile has raised its full-year performance guidance, expecting to add tens of thousands of new users by the end of the year, while also increasing its expectations for free cash flow and EBITDA. Sievert revealed that although the fiber business is still in its early stages, the company plans to develop the service to at least 100,000 users by the end of the year. It is worth noting that Comcast Corporation Class A and Charter Communications announced on Tuesday that they have reached a multi-year agreement to provide mobile services to business customers based on the T-Mobile network. Sievert is cautiously optimistic about this partnership, believing that it will help T-Mobile gain incremental revenue in the underserved small and medium-sized business market. "In and of itself, it's a great partnership," he said. "I think it will evolve and produce real benefits, but that doesn't mean we're going to open up entirely new business areas as a result."