T-Mobile reported its second quarter results Thursday, showing that it gained fewer postpaid phone customers than AT&T during the period, and that it could lose billions of dollars in wholesale revenues due to Dish Network's new MVNO deal.

But that's nothing to be concerned about, according to company executives.

Indeed, T-Mobile on Thursday raised its expectations for financial and customer growth during 2021. The company added an additional 500,000 customers to its postpaid net customer growth goals for 2021, raising its overall maximum total for the year to 5.3 million. And it raised its free cash flow expectations for 2021 by $50 million, to an overall total of up to $5.5 billion.

"We consistently deliver," CEO Mike Sievert said during the operator's quarterly conference call, adding that T-Mobile is "pacing nicely."

And CFO Peter Osvaldik suggested the operator may consider "substantial" share repurchases at some unspecified point in the future.

The Dish ramifications

Dish Network surprised the market earlier this month when it announced an MVNO deal with AT&T, essentially paving the way for Dish to move its 9 million Boost Mobile customers from T-Mobile's network to AT&T's network.

T-Mobile responded just a few days later with an aggressive prepaid offer of $25 per month services in a bid to convince Boost customers to switch to its own "Metro by T-Mobile" prepaid brand, effectively keeping them on T-Mobile's network.

Interestingly, T-Mobile's CFO suggested that the operator had been expecting less than $2 billion in revenues during 2021 from Dish for its Boost customers.

But T-Mobile's Sievert said the operator does not plan to change its financial expectations due to Dish's new deal with AT&T. He said that if Dish moves its Boost customers onto AT&T's network, that would free up additional network capacity for T-Mobile to use for its own customers. "It opens up some opportunities," Sievert said of Dish's move. "We're not really that displeased."

The 5G network

T-Mobile's executives continued to tout the company's position in the 5G market, arguing that T-Mobile has a leading position in the deployment of valuable midband spectrum for 5G compared with AT&T and Verizon.

Importantly, the company said it now covers 165 million people with its 2.5GHz midband 5G network, and remains on pace to grow that to 200 million people by the end of 2021. Also by the end of the year, the company expects to employ fully 100MHz of its 2.5GHz spectrum in its 5G service – which would be an increase from the 40-60MHz of spectrum the operator has been deploying so far. Average download speeds on that midband 5G network hover around 350 Mbit/s, according to T-Mobile.

T-Mobile also added that it has so far managed to move about 33% of its Sprint customers onto its T-Mobile network.

The operator plans to offer a number of services on its speedy midband 5G network, including fixed wireless Internet services. The company said it continues to expect to add around 500,000 total fixed wireless customers to its network by the end of this year on its way to adding up to 8 million customers over the next five years.

"We are really seeing demand outpace supply," said T-Mobile's Dow Draper, the executive in charge of T-Mobile's fixed wireless service. He explained that the operator is adding customers as quickly as it can based on the amount of network capacity it has allocated for fixed wireless.

The quarterly results

T-Mobile reported the addition of 627,000 new postpaid phone customers during the second quarter. That's a substantial figure, but it's slightly below the massive 789,000 postpaid phone customers that AT&T added during the same period. T-Mobile for years has far outpaced its rivals in the metric, and so losing the position to AT&T is noteworthy.

But operator executives were nonplussed, arguing the new customers came from growth sectors including enterprise and rural areas. They also boasted that T-Mobile's average revenues per user are increasing in part thanks to its more expensive Magenta Max unlimited data plan.

During T-Mobile's quarterly conference call, analysts asked why wireless network operators like T-Mobile continue to report large numbers of new postpaid customers every quarter. T-Mobile officials said the situation is mainly due to prepaid customers opting for postpaid services, in part due to the improved economy in the US.

In terms of financials, T-Mobile's revenues grew 13% year-over-year to $20 billion and its net income rose to $978 million.

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— Mike Dano, Editorial Director, 5G & Mobile Strategies, Light Reading | @mikeddano