By Sheila Dang and Shariq Khan
(Reuters) - U.S. wireless carrier T-Mobile US Inc (O:TMUS), which is buying smaller rival Sprint Corp (N:S), topped Wall Street estimates for revenue on Tuesday as it added more phone subscribers who pay a monthly bill.
T-Mobile and Sprint announced on Sunday they had agreed to an all-stock $26 billion deal, which the companies say they expect will hold up against regulatory scrutiny because it will create thousands of American jobs and better prepare them to create the next-generation wireless network.
T-Mobile Chief Executive John Legere said during the post-earnings conference call with analysts that he had meetings with the Securities Exchange Commission on Tuesday that went "extremely well," and added he would respect the regulatory review process.
Shares of the company rose 2 percent in after-market trading on Tuesday.
T-Mobile added 617,000 phone subscribers who pay a bill in the quarter ended March 31, down from an addition of 798,000 subscribers a year earlier.
The company attributed the decline partly due to the late arrival during the quarter of the Samsung (KS:005930) Galaxy S9, since new smartphone launches have historically driven new customer additions.
Connected devices like the Apple (O:AAPL) Watch helped raise postpaid net customer additions, and T-Mobile President Mike Stewart called the Apple Watch "a nice surprise hit" during the earnings call.
The company's revenue rose to $10.46 billion from $9.61 billion, beating analysts' average estimate of $10.35 billion, according to Thomson Reuters I/B/E/S.
Net income fell to $671 million, or 78 cents a share, during the quarter, down 4 percent from $698 million, or 80 cents a share, a year earlier.
Analysts had expected net income of 71 cents per share.
A deal between T-Mobile and Sprint will help T-Mobile boost its financials by creating a company with 127 million customers, making it a more formidable competitor to the top two wireless players, Verizon Communications Inc (N:VZ) and AT&T Inc (N:T).
Macquarie analyst Amy Yong said in a research note that the coming regulatory decision on the proposed AT&T-Time Warner merger could affect approval for the T-Mobile and Sprint tie-up.
Both carriers' foreign ownership could also complicate the approval process, Yong wrote.