By Sheila Dang and Eva Mathews
(Reuters) - T-Mobile US Inc <TMUS.O> on Thursday added more phone subscribers than analysts had expected in the third quarter, as demand for its services picked up with people staying at home due to the COVID-19 pandemic.
Shares of T-Mobile rose 7.75%% to $126.35 in after-hours trading.
The U.S. wireless carrier has been racing to expand its next generation 5G network and integrate Sprint's wireless network after it purchased its smaller rival in April.
T-Mobile's 5G network quality is expected to surpass larger rival Verizon Communications Inc, and it continues to have the lowest prices in the industry, said Craig Moffett, an analyst with research firm MoffettNathanson, in a note on Thursday.
T-Mobile added a net 689,000 so-called postpaid phone customers during the quarter ended Sept. 30, above analyst estimates of 422,000, according to research firm FactSet.
Analysts and investors closely watch postpaid phone figures, as those customers pay a recurring monthly bill, making them valuable to the carriers.
Total revenue rose to $19.27 billion (£14.66 billion) from $11.06 billion in the year-ago quarter, beating analyst estimates of $18.34 billion, according to IBES data from Refinitiv.
T-Mobile's net income rose to $1.25 billion, or $1.00 per share, in the third quarter, from $870 million, or $1.01 per share, a year earlier.
The wireless carrier increased its guidance for the second half of 2020, and said it now expects postpaid phone net customer additions to be between 1.3 million and 1.4 million, including 600,000 to 700,000 in the fourth quarter.
The previous H2 guidance of 1.7 million to 1.9 million in total postpaid net customer additions, which includes phones and other devices like tablets, was achieved during the third quarter.
Still, the fourth quarter guidance was "cautious" given there are still business uncertainties due to the pandemic, said T-Mobile Chief Executive Mike Sievert on an earnings call with analysts.
(Reporting by Eva Mathews in Bengaluru and Sheila Dang in New York; Editing by Shounak Dasgupta, Alistair Bell and Richard Pullin)