T-Mobile's Merger Attempt With Sprint More Likely

The firm reported revenue growth of 8% year over year versus our full-year projection of 7.5%. T-Mobile continues to do a nice job of growing its customer base, adding 1.3 million subscribers, its 18th straight quarter of adding more than 1 million customers. However, as we’ve expected, the number of subscribers added is declining. We anticipate that this will continue, as Verizon and AT&T are fighting back with lower prices and all-you-can-eat bundles of their own. That said, we still expect T-Mobile to add subscribers faster than the other three operators through at least the end of 2018.

The firm’s greater scale is also helping it improve its margins, with a quarterly EBITDA margin of 27% versus our full-year projection of 26.7%. However, with the fourth quarter historically carrying a lower margin due to holiday incentives, we expect the full year to be in line with our projection.

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