Scott Moritz

Verizon Communications, the largest US wireless carrier, exceeded profit estimates on stronger customer gains even as rivals including T-Mobile US brought more price competition to the industry.

While subscriber growth drove the profit gains, wireless margins and the size of customers’ phone bills were smaller than analysts expected. More than 82 percent of those new customers were tablet buyers, Verizon said.

With the company selling more tablets than phones and offering discounts on data plans, customers’ monthly phone bills will likely shrink, putting more pressure on wireless margins, said Kevin Smithen, an analyst with Macquarie Securities USA.

The average size of customers’ monthly bills grew 4.7 percent to $159.73. Verizon’s wireless service margins expanded to 50.3 percent. Verizon’s Edge plan spreads the phone charges over 20 months and lowers service plan charges by $10 or $25 a month depending on the data allotment.

While the shift threatens to erode wireless service revenue and margins, the move may help keep customers from switching to T-Mobile, which was the first carrier to offer phone financing in early 2013.

As Sprint nears an agreement to buy T-Mobile US, the man in the hot pink T-shirt will soon step into the limelight. John Legere, the chief executive officer of T-Mobile who’s known for wearing company-branded shirts and taunting his competitors on Twitter, is likely to run the combined company, according to two people familiar with the matter who asked not to be identified because the plans are private.

He’s being favored over Dan Hesse, the 60-year-old CEO of Sprint, who took over a broken company in 2007 and did enough fixing, even while operating at a loss, to attract a new owner in 2013.

As negotiators hammer out the finer points of an agreement, Legere will increasingly be responsible for the prospects of an enlarged company. It would fall to him to integrate disparate management teams and divergent marketing strategies, while also combining two networks that are years behind the technological advances of their biggest rivals, AT&T and Verizon Communications.

Comcast’s bid to buy Time Warner Cable may be the opening act for a yearlong festival of telecommunications deals that would alter Internet, phone and TV service for tens of millions of Americans.

AT&T and DirecTV may be the next dance partners. AT&T is in advanced talks to acquire DirecTV for as much as $50 billion, according to people familiar with the matter, who asked not to be named because the talks are private.

After that, in June or July, Sprint and T-Mobile US may bring a $30 billion merger before US regulators, people said. All told, the three deals could total more than $170 billion in equity and net debt and affect more than 80 million US customers.

Sprint Chief Executive Officer Dan Hesse said the wireless price wars aren’t sustainable and show the need for a bigger No. 3 competitor in the US.

“A stronger No. 3 will get one and two to react more aggressively so everybody benefits,” Hesse said in an interview with Erik Schatzker and Stephanie Ruhle on Bloomberg Television.

“If you are smaller, the big two do not react as aggressively.” Both Sprint and T-Mobile posted net losses in the first quarter. “T-Mobile and Sprint have to invest more per customer in their network,” Hesse said. “Think of a nationwide network, it largely affects costs. It is like a jumbo jet. AT&T and Verizon, because of their size, can put more customers on that, and divide it among more customers and can spend more money on advertising.”

T-Mobile US added more subscribers in the first quarter than AT&T and Verizon Communications combined, heightening the carrier’s allure as Sprint pursues a merger.

Promotions and cheaper plans helped T-Mobile add 1.3 million new monthly subscribers in the period, topping the 998,000 projected by analysts and the 1.16 million customers that AT&T and Verizon added combined.

The subscriber growth came at a cost: T-Mobile’s fourth quarterly loss in a row. Sprint plans to push forward with a bid for T-Mobile after meeting with banks to make debt arrangements for that offer, Bloomberg News reported, citing people with knowledge of the situation.

T-Mobile Chief Executive Officer John Legere is delivering on a promise to shake up the US wireless industry. The fourth-largest US carrier has been on a campaign to lure customers away from larger rivals by providing financing for phones, cheap international rates and as much as $650 to people who switch service.

AT&T the second-biggest US mobile-phone carrier, will introduce 4G LTE wireless Internet access to commercial flights, mounting a challenge to Wi-Fi provider Gogo.

With help from Honeywell International, AT&T will begin offering the service in the continental US as soon as late 2015 for in-flight Wi-Fi Internet connections and entertainment, as well as for cockpit communications, according to a statement.

AT&T would be the first provider of 4G LTE to planes, said Roger Entner, an analyst with Recon Analytics in Dedham, Massachusetts.

“The service could potentially be faster, since you don’t have to bounce up to a satellite,” he said. The service will use ground-based antennas aimed skyward at receivers on planes, AT&T Strategy Chief John Stankey said in a phone interview.

Pending final approval from regulators, AT&T will use some of the Wireless Communications Service, or WCS, spectrum it acquired in 2012 to transmit the LTE signal to the planes, Stankey said.

Zebra Technologies is buying a unit of Motorola Solutions for $3.45 billion, borrowing most of the amount for a bet on mobile-computing services for businesses that need to track employees and products.

Zebra plans to fund the deal with about $200 million of cash and $3.25 billion in new debt. That’s almost as much as Zebra itself is worth, based on the closing stock price, which valued the company at about $3.4 billion. Both companies offer bar-code scanning, radio-frequency identification and other technology that companies can use to control their inventory, whether it’s retailers stocking shelves or hospitals recording doses of medicine.

Motorola also has specialized tablets and computers for various industries.

T-Mobile US introduced a mobile-phone plan that will prevent users from exceeding their data limits and incurring extra charges.

For $40 a month, a customer can get as much as 500 megabytes of fourth-generation LTE data service, along with unlimited talk and text messages, T-Mobile said on its website. The Simple Starter plan, which starts April 12 and doesn’t require an annual contract, won’t charge overage fees because customers won’t be able to use more than their data allotment. Instead, they will be prompted to pay more if they want additional access.

Chief Executive Officer John Legere said the plan is designed to be a “predictable, affordable solution” for new, price-sensitive customers. “People shopping at the $40 level want to pay that amount, not get surprised with overage charges,” said Mike Sievert, chief marketing officer of Bellevue, Washington-based T-Mobile. A customer who reaches the 500-megabyte limit and wants additional data allotments would pay $10 for an extra gigabyte, Sievert said.

Your mobile-phone bill may finally be shrinking. The industry’s fight over prices, ignited in 2013 by T-Mobile US, is beginning to have a noticeable effect even for consumers who haven’t switched carriers.

As they jockey to match or beat each other’s discounts for new customers, the wireless companies are also passing along savings to their current users to keep them from running off to a competitor. Even Verizon Communications, the largest US wireless carrier and the one that gets the most revenue per customer, has been dragged into the fray. With no formal announcement or fanfare, it matched AT&T’s latest price cut for big-spending, family-plan customers -- itself a move to get closer to the $140 a month T-Mobile charges for an equivalent package.

While sales are still expanding for mobile carriers, savvy consumers have been able to save hundreds of dollars a year. In its latest price cut, Verizon reduced the monthly charge for using a smartphone on a 10-gigabyte service plan to $15 from $20. For a family using four smartphones, that means a monthly plan of $180 just fell to $160 -- in line with discounts AT&T announced in February. Verizon says its promotion is temporary.