(Reuters) – T-Mobile US Inc on Wednesday raised its subscriber growth forecast for the second time this year as the wireless carrier’s relatively cheaper plans lured customers reeling from decades-high inflation.
The company expects to add between 6 million and 6.3 million net monthly-bill paying subscribers in 2022, up from a prior forecast of 5.3 million to 5.8 million.
Unlike its rivals AT&T Inc and Verizon Communications Inc, T-Mobile’s decision not to raise prices for its wireless plans has helped it add more customers in a price-conscious market.
The carrier added 723,000 subscribers in the second quarter, much above FactSet estimates of 573,100.
T-Mobile’s results mark a bright spot for investors, after Verizon cut its annual profit forecast and AT&T lowered its cash flow expectations last week.
Consumer spending in the United States has held out against runaway inflation so far, but that could soon change if the Federal Reserve’s aggressive rate hikes bring on a recession.
T-Mobile said it expects annual free cash flow including merger related costs to be between $7.3 billion and $7.6 billion compared with the previous forecast of $7.2 billion-$7.6 billion.
In the quarter ended June 30, T-Mobile posted a net loss of $108 million, or 9 cents per share, mainly due to a one-time charge of $1.9 billion. It had posted a profit of $978 million, or 78 cents per share, a year earlier.
Its shares were up 1.2% in volatile premarket trading, building on the 15.5% gain so far this year.
(Reporting by Richard Rohan Francis, Eva Mathews and Niket Nishant in Bengaluru; Editing by Arun Koyyur)
