T-Mobile to Spend Up to $5.1B on LTE in 2017

T-Mobile is expecting to spend more on its LTE deployment this year, with the operator predicting capital expenditure up at $4.8 billion to $5.1 billion.

T-Mobile US Inc. CFO Braxton Carter said on the operator's fourth-quarter earnings call Tuesday that T-Mobile is expecting the capex spending to be "front-loaded" early in the year. This is because T-Mobile is deploying LTE on low-band 700MHz spectrum in markets like Chicago now.

In the fourth quarter of 2016, T-Mobile's capital expenditure was $0.8 billion, compared to $1.2 billion in the third quarter, and $1.4 billion in the same period last year. T-Mobile says that for 2016 -- excluding capitalized interest -- capex was up at $4.6 billion, compared to $4.5 billion in 2015.

"T-Mobile's network is now on parity with Verizon," CEO John Legere said on the call. T-Mobile now covers 314 million people with LTE and is aiming at 320 million covered by year's end.

CTO Neville Ray noted on the call that T-Mobile now has about 1,000 small cells live on the network, with thousands more planned for this year. Ray says that the small cells are coming on for two reasons. The first is that it helps T-Mobile prepare to densify the network for 5G, the other being that T-Mobile will use the small cells to add unlicensed 5GHz LTE coverage this year. (See Wireless Companies Unite to Ward Off LTE-U Regulation.)

"That's a fact that that will happen in 2017," Ray says.

"We will not starve our network, unlike one of our competitors, who say they can do it on the cheap," Legere said of 2017's network plans on the call. He's talking about Sprint Corp. (NYSE: S), which says it is spending less (although that is supposed to change in 2017) because it is adding small cells to densify its LTE network. (See Sprint's 2.5GHz LTE Spend Will Grow in 2017.)

T-Mobile added 2.1 million subscribers for the fourth quarter and 8.2 million for the year. The company now has 71.5 million subscribers in total.

Total revenues were $10.2 billion for the fourth quarter and $37.2 billion for the year. Net income was up 31% at $390 million for the quarter, and up 99% at $1.5 billion for 2016. Earnings per share were $0.45 for the quarter and $1.69 for 2016.

T-Mobile's shares are trading down 40 cents to $60.51 this morning. This is largely a shareholder reaction to Verizon launching a new $80 unlimited data plan to compete with the other carriers.

— Dan Jones, Mobile Editor, Light Reading