Comments from the CEO of T-Mobile USA (NASDAQ:TMUS) on Monday were not exactly well received by investors. In the absence of other market-moving news about their shares, they assertively exited the third-party mobile carrier. By the end of the day, the price had fallen by more than 6%, which was considerably worse than the 0.6% decline in the S&P500 index.
Speaking at the UBS Global Media and Telecommunications Conference On Monday, T-Mobile US Chief Mike Sievert essentially said his company’s investors should prepare for some discouraging news ahead. He specifically warned that certain factors will act as tailwinds for the economy telecommunications operating results, and some numbers will not be as good as in the third quarter.
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Much of this has to do with an expected slowdown in new business, which Sievert described as setting a “decade-long record” in that quarter. The company’s performance in this aspect of its business was strong indeed, with a net “addition” of 865,000 subscribers during that period.
This development was a key factor for T-Mobile to highlight a number of metrics in its full-year 2024 guidance, including customer additions, net cash flow from operations and non-GAAP (adjusted) free cash flow.
This shouldn’t necessarily come as a shock to investors or watchers of the telecom sector. Overall, the US market is relatively saturated, and the game now is to find new revenue streams from existing customers – hence the promotion of products such as home internet services. I think a relatively softer quarter isn’t surprising given how robust the No. 3 is in many respects, and I believe T-Mobile’s US bulls should stay the course and not get discouraged.
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