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T-Mobile gains more ground as Sprint merger nears

The carrier boasts another strong quarter, but everyone's just wondering when its deal with Sprint will go down.

T-Mobile CEO John Legere is staying relatively mum this quarter.
James Martin/CNET

Outspoken T-Mobile CEO John Legere is playing it low-key this time. 

On Monday, the "Un-carrier" posted third-quarter results -- usually a chance for Legere to jump on a conference call to crow about the company's performance or to bash its competitors. But aside from a seven-minute video Q&A segment and a quote in a press release, Legere is remaining mum. 

That's because T-Mobile is that close to a deal to merge with Sprint, and Legere & Co. would probably like to avoid questions  they wouldn't be able to answer. 

"With all the rumors and speculation out there, we decided that we wanted to make sure you all saw and focused the Q3 results, and not just on the rumors and speculation that seem fill the news every day," Legere said in the video blog. 

T-Mobile and Sprint, and their respective parents, German carrier Deutsche Telekom and Japanese carrier SoftBank, all still expect to announce a deal, according to a person familiar with the talks. Bloomberg reported on Thursday that the merger would be delayed for a few weeks. Sprint will announce its quarterly results on Wednesday -- also with no conference call. 

For now, T-Mobile is focusing on its quarterly results, which saw the nation's third-largest carrier add 595,000 postpaid phone subscribers, or customers who pay at the end of the month and typically boast higher bills and credit scores. It added a total of 817,000 postpaid customers when factoring in other connected devices like tablets and wearables. 


The former Verizon guy and current Sprint guy may be joining the T-Mobile family soon. 


The results mark the seventh quarter in which T-Mobile has led the rest of the industry in postpaid growth, a product of aggressive marketing and a continued rollout of perks. The company has continued to turn heads with freebies like its T-Mobile Tuesday giveaway program, free international data and its all-in, tax-free pricing. Its latest deal gives Netflix away to family customers on its unlimited data plan. 

The moves have benefited consumers even if they aren't with T-Mobile. Verizon has reintroduced an unlimited data plan, and AT&T bundles HBO with its unlimited data offering. Sprint offers a year of service for free

That competitive spirit has had an impact on T-Mobile's results, which marked a decline from a year ago. T-Mobile blamed rival promotions, a split in the release of the iPhones (the iPhone X is due to hit markets next month) and the impact from a series of hurricanes that struck the US. The 595,000 phone additions were below Wall Street's forecast. 

"T-Mobile still has a great deal of momentum...but that momentum is now unquestionably slowing," said MoffettNathanson analyst Craig Moffett.

The big question is whether things change with a T-Mobile-Sprint merger. Critics warn that the industry may get less competitive, resulting in fewer perks and discounts for consumers. Integrating two national carriers may also prove to be a distraction for the combined company. Sprint itself is the product of a disastrous merger between the original Sprint and Nextel. 

T-Mobile has the benefit of a strong track record of execution. 

In total, T-Mobile added a net 1.3 million new customers in the period, the 18th straight quarter in which it exceeded the 1 million mark. It also raised its 2017 forecast range for new subscriber growth to 3.3 million to 3.6 million, up from 3 million to 3.6 million. 

The company posted a third-quarter profit of $550 million, or 63 cents a share. Revenue rose 8 percent to $10 billion.

Analysts, on average, had forecast earnings of 46 cents a share and revenue of $10.01 billion, according to Yahoo Finance

T-Mobile shares rose 2 percent to $61.70 on Monday. 

This story originally ran at 4:37 a.m. PT.

Updated at 6:56 a.m. PT: To include updated stock quote and analyst comment. 

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