(Reuters) -T-Mobile US raised its full-year forecast for monthly bill-paying phone subscriber additions after adding more customers than expected in the second quarter on strong demand for its discounted unlimited plans that include streaming perks.
The company’s shares rose 2.9% to $180.44 in premarket trading on Wednesday.
As competition builds in the telecom sector, carriers in the United States have turned to bundling streaming services with high-speed internet plans to bring in more customers who are looking to get the best deals.
T-Mobile’s Go5G Next and Go5G Plus plans, which include Netflix and Apple TV+ along with premium data plans have resonated well with customers.
“We’re seeing fabulous uptake, but also have a lot of continued room to run on that plan itself,” T-Mobile Chief Financial Officer Peter Osvaldik said.
Roughly 30% of T-Mobile’s postpaid subscriber base has opted for the Go5G Next and Go5G Plus plans, Osvaldik added.
The company now expects to add between 5.4 million and 5.7 million subscribers in 2024, compared with its previous forecast of 5.2 million to 5.6 million subscriber additions.
T-Mobile raised prices for several of its legacy phone plans in May citing rising costs, which will reflect in customers’ billing cycle starting June 5.
The price hikes not only push customers to higher-end 5G plans, but also provide the flexibility to reach forecast targets amid a tough growth environment.
T-Mobile added 777,000 postpaid phone customers in the second quarter, the highest among peers, beating FactSet estimates of 642,600 additions.
Verizon added 148,000 monthly bill-paying wireless phone subscribers, while AT&T posted 419,000 additions in the second quarter.
T-Mobile now expects adjusted free cash flow for the year to be between $16.6 billion and $17.0 billion, an increase from its prior forecast of $16.4 billion to $16.9 billion.
(Reporting by Harshita Mary Varghese in Bengaluru; Editing by Shounak Dasgupta)
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