T-Mobile US reported an increase in mobile phone subscribers for the fourth quarter that fell short of analyst expectations, presenting an immediate challenge for new Chief Executive Officer Sreeni Gopalan. At the time of writing, the company's stock was down nearly 5% in pre-market trading.

The Bellevue, Washington-based carrier disclosed in a statement on Wednesday that its fourth-quarter profit declined compared to the previous year, partly impacted by certain severance charges. Earnings per share were $1.88, a 27% decrease year-over-year, missing the average analyst estimate of $2.03. Revenue reached $243 million, marking an 11% increase from the prior year and slightly exceeding forecasts. Adjusted EBITDA came in at $8.45 billion, also slightly above projections. For the full year, core adjusted EBITDA, excluding lease revenue, is anticipated to be around $37 billion.

During the quarter, T-Mobile added 962,000 wireless subscribers, which was below the market expectation of 992,000. Although this represents a slowdown from the one million additions in the third quarter, it still surpassed the customer gains reported by rivals AT&T and Verizon Communications during the same period. The three major U.S. wireless carriers are deeply engaged in a battle for subscribers, deploying promotions such as free phones, new television offers, and streaming service bundles to attract new customers. However, these aggressive customer acquisition efforts come at a significant cost—particularly around the launch of new Apple devices, where carriers often subsidize handsets at a loss, while consumers have grown accustomed to switching carriers frequently to secure the best deals.

As the nation's second-largest wireless provider, T-Mobile aims to build a differentiated competitive edge based on value and network quality. Gopalan emphasized in an interview that customers should experience ongoing benefits from their carrier, not just at the point of upgrading their device. T-Mobile's initiatives in this area include offering free Netflix subscriptions and Wingstop meal vouchers as sustained incentives. Gopalan, who was promoted from Chief Operating Officer last November, stated, "This is just one example of how we are redefining the customer relationship," adding, "Our approach is not about a three-year contract and an in-store upgrade."

Analysts suggest that Gopalan is likely to continue an aggressive promotional strategy to maintain T-Mobile's leading position in net postpaid phone subscriber additions. The broadband segment remains a key growth driver for the company—T-Mobile added 558,000 broadband customers in the fourth quarter, significantly exceeding expectations of 504,000. Gopalan reaffirmed that the company is evaluating opportunities for fiber acquisitions, provided they do not involve excessive investment in legacy copper networks and can deliver added value for both shareholders and customers.

Mike Katz, President of T-Mobile's Business and Product divisions, noted that the carrier still has substantial room for expansion in small towns and rural areas across the United States, where brand awareness remains relatively low. He also indicated that while T-Mobile's core customer base is currently value-oriented, the company is gradually making inroads with premium customers who prioritize network quality. "A growing number of users are realizing that the truly superior network belongs to T-Mobile, not AT&T or Verizon—that is a major opportunity for us," Katz said.