T-Mobile USA posted higher profits in the first quarter, providing an unexpected boost to its parent company, Deutsche Telekom, according to new financial results coming out of Germany tonight.
The news follows a report by Bloomberg News that Deutsche Telekom is in talks for a possible merger of T-Mobile USA and MetroPCS, a deal that would combine the No. 4 and 5 U.S. wireless carriers. Deutsche Telekom made no mention of the potential deal in the process of releasing its results.
T-Mobile USA, based in Bellevue, posted earnings (before interest, taxes, depreciation and amortization) of $1.29 billion — up 8 percent from the same quarter a year ago. Customers on long-term contracts decreased by 510,000, while prepaid customers rose by 240,000. The overall customer total, including machine-to-machine communications, was up by 187,000 customers.
Deutsche Telekom said in a news release, “T-Mobile USA is well on schedule for implementing the new LTE mobile standard and the comprehensive modernization of its network thanks to the completed transfer of spectrum from AT&T and preparations for refarming existing spectrum. Relaunching the T-Mobile brand on the U.S. market and significantly enlarging the sales network in the country are important steps in implementing the strategy.”
Deutsche Telekom agreed to sell T-Mobile USA to AT&T last year for $39 billion, but federal regulators blocked the deal. The company is pursuing a “challenger” strategy, attempting to position itself as a lower-priced alternative to AT&T, Verizon and Sprint.
T-Mobile USA has been struggling to compete as the only one of the four major U.S. wireless carriers without Apple’s iPhone.