Charter beats T-Mobile in wireless growth (2025)

(Source: Charter Communications)

Cable company Charter Communications gained more mobile customers than T-Mobile – long the US wireless industry's market leader – during the first quarter of 2025. That development has several noteworthy ramifications for the two companies as well as the other players in the sector.

Here are four takeaways from Charter's performance and the broader Q1 earnings season so far:

1. Charter's strategy is working

Charter on Friday reported the addition of 514,000 lines to its Spectrum Mobile MVNO during the first quarter, up from a year-ago add of 486,000. Charter now has a total of 10.39 million mobile lines, making the company the biggest independent MVNO in the US market, by far.

However, in Charter's broadband business – its cornerstone operation – Charter lost 60,000 subscribers.

Nonetheless: "Charter Communications is the best run and most innovative cable company in the world," declared Jim Patterson of Patterson Advisory Group in his weekly newsletter.

Patterson explained that Charter has slightly fewer domestic residential Internet customers than Comcast, but substantially more mobile customers than Comcast.

Others agreed that Charter's growing wireless business is worth watching.

"While we do not expect mobile to be a meaningful EBITDA [earnings before interest, taxes, depreciation, and amortization] contributor in the near term, its longer-term trajectory could be better than we had thought," wrote the financial analysts at Bernstein in a note to investors following Charter Q1 2025 results.

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One likely reason for Charter's success is that its mobile and broadband services are cheap. According to the financial analysts at New Street Research, Charter's new Life Unlimited plans represents "a compelling value."

Summarized the financial analysts at MoffettNathanson: "Comcast has always tilted towards higher prices and higher margins, Charter towards lower prices and faster unit growth. Those differences in pricing and ARPU [average revenue per user] between the two may be relatively small ... but they matter. Charter's approach is much easier to defend."

2. US wireless industry growth isn't slowing down.

As expected, T-Mobile reported 495,000 postpaid phone net customer additions during the first quarter. That was slightly below analyst expectations, and the company's shares slid slightly in response.

AT&T, meanwhile, reported first quarter results – 324,000 postpaid phone customer net additions – that were mostly ahead of analysts' expectations. And Verizon lost 289,000 postpaid phone customers in the first quarter.

Related:Charter video and broadband losses stabilize as mobile lines soar

Taken together, the figures are higher than most analysts had expected. For example, the New Street analysts now expect the US wireless industry collectively to gain 1.6 million new customers during the first quarter of 2025 – well ahead of the 1.1 million the industry gained during the same quarter last year.

"Not what we expected," the analysts wrote.

Others agreed.

"In wireless, with Altice [USA] still to report, 1Q25 postpaid phone [customer] adds look to be around ~1.41 million adds vs. the Street's 1.36 million [expectations]," wrote the financial analysts at TD Cowen. "However, how we got there was very different [than last year]. That is, we saw a stronger AT&T offsetting a weaker Verizon, Charter leading the industry with 514,000 line adds, outsized activity across the board, and higher device upgrades."

3. The second half of this year might be funky

Officials from Verizon, AT&T and T-Mobile all reported an acceleration in phone sales toward the end of the first quarter. The reason? Fears over rising phone costs due to President Trump's tariffs.

That so-called "pull forward" in phone sales has some implications for the remainder of 2025.

"We suspect the higher-than-expected [customer] adds in 1Q25 may be a pull forward of activity from later in the year, which could make for a solid 2Q25, but a bleak second half," warned the New Street analysts.

Related:Comcast vows to repair 'disconnect' with customers as broadband losses mount

Meaning, bigger growth now could reduce growth opportunities later this year.

"The elevated activity is a concern as we consider the impact on incremental margins and FCF [free cash flow]," added the financial analysts at TD Cowen. "Generally, T-Mobile should fare best in a higher activity environment as it typically wins with more 'jump ball' opportunities and relies on its fundamentally superior value proposition (best network, best pricing). Meanwhile, AT&T may be more challenged in a high-activity environment given its typically more aggressive device promos in the marketplace."

4. Implications for convergence and M&A.

Although Charter, T-Mobile and others continue to report growth in the mobile sector, growth in the market for home broadband remains hard to find.

For example, the TD Cowen analysts noted that customer additions in the US broadband industry collectively are tracking toward 341,000, below their expectations of 431,000. A big reason: US cable companies are on track to lose 316,000 total customers during the period, "the worst 1Q [cable] performance in recent history," according to the TD Cowen analysts.

But Charter suggested that its mobile efforts are helping it navigate broadband difficulties. The company said roughly 20% of its Internet customers also subscribe to its mobile services.

"Charter is aggressively driving a converged mobile/home Internet package, which positions it favorably," agreed the financial analysts at KeyBanc Capital Markets.

Charter, of course, isn't the only company looking for opportunities at the convergence between wireless and wireline services.

"Our converged penetration continues to climb, with more than four in ten AT&T fiber households also now subscribing to our mobility services," AT&T CEO John Stankey boasted during his company's quarterly conference call. "This is a key trend because accounts with both fiber and wireless services have lifetime values that are more than 15% greater than customers with standalone services. The message here is that the primary driver of our growth is our success at executing our fiber and 5G playbook, and that our increased investments in customer acquisition and retention are driving sustained growth in high-value customer relationships."

But the developments are also noteworthy in light of ongoing rumors that T-Mobile might look to acquire a cable company like Charter Communications.

During his own company's quarterly conference call, T-Mobile's CEO appeared to throw some cold water on that idea.

"We've kind of shown our preference for pure-play fiber. That doesn't mean we're going to limit ourselves to that, but we've shown our preference for that," said T-Mobile CEO Mike Sievert.

However, the New Street analysts pointed out that Sievert's comments might be a red herring.

"Comcast and Charter's networks are 99% fiber," they wrote. "The presence of HFC [hybrid fiber/coax] has no functional impact on the product or on T-Mobile's ability to use the network to create mobile capacity."

T-Mobile's CEO also suggested that he's looking for acquisitions in sectors of the market that are growing, like the fiber industry. "We're a growth company," Sievert said.

Right now, though, Charter is the company that's growing the fastest in the US wireless industry.