By Harshita Mary Varghese
Feb 11 (Reuters) – T-Mobile raised its forecast for 2027 service revenue and adjusted free cash flow, encouraged by rising demand for its broadband offerings and premium 5G mobile plans that include streaming perks.
Shares of the company rose 3% on Wednesday.
During the fourth quarter, the company added 962,000 monthly-bill-paying phone customers, the highest among the big three U.S. wireless carriers.
T-Mobile’s bundles that include Netflix, Apple TV and Hulu, along with price guarantees, have resonated with customers and driven many to upgrade from basic plans.
The wireless subscriber numbers, however, fell short of the 981,330 additions expected by analysts polled by FactSet. T-Mobile said it will stop reporting postpaid phone subscriber additions starting this quarter, as it shifts focus to account growth and average revenue per account.
“It may be analytically correct to say that accounts, rather than subscribers, is the more important metric, but when it comes to disclosure, more is more,” MoffettNathanson senior analyst Craig Moffett said.
T-Mobile finance chief Peter Osvaldik told Reuters that the company continues to see new customer accounts taking premium plans at 60% take rates.
T-Mobile now expects service revenue to be up to $81.5 billion in 2027, compared with its prior forecasts of between $75 billion and $76 billion.
The company also lifted its 2027 adjusted free cash flow between $19.5 billion and $20.5 billion, versus its earlier projection of up to $19 billion.
Total revenue for the fourth quarter came in at $24.33 billion, compared with analysts’ average estimate of $24.11 billion, according to data compiled by LSEG.
“Our ARPA (average revenue per account) has grown by 13% since 2020,” T-Mobile CEO Srini Gopalan said.
The churn rate, the percentage of customers who discontinue service, stood at 1.02% for T-Mobile’s postpaid services, compared with 0.92% a year earlier.
(Reporting by Harshita Mary Varghese in Bengaluru; Editing by Shinjini Ganguli)
Comments