T-Mobile (TMUS 0.57%) continues to execute on its merger with Sprint, and its second-quarter results showed excellent progress. While the company fell short of Wall Street's revenue and earnings estimates, its net subscriber additions were better than expected. Here are three big takeaways from the wireless carrier's earnings report.

Declining postpaid phone churn

T-Mobile's biggest rivals in wireless, AT&T (T 1.88%) and Verizon Communications (VZ -0.53%), both reported a year-over-year increase in subscriber churn in the second quarter. Not T-Mobile.

T-Mobile saw its postpaid phone churn rate fall 7 basis points to 0.80%. That actually came in lower than Verizon last quarter, which posted a 0.81% churn rate. Verizon has historically been the industry leader, but it fell to last place in Q2.

It was no surprise that churn increased at T-Mobile's rivals. Both AT&T and Verizon instituted price increases in the second quarter. T-Mobile panned the other carriers for the move in a marketing play aimed at getting customers to switch to its service.

The lower churn at T-Mobile led to stronger net additions. The company added 1.7 million postpaid customers, including 723,000 postpaid phone customers. That's significantly better than Verizon's 514,000 net postpaid additions (12,000 phones). While total postpaid additions outpaced AT&T's 1.06 million, Verizon added few postpaid phone customers. (AT&T added 813,000.) 

Huge broadband gains

Part of T-Mobile's 5G strategy is to offer fixed wireless home internet service in markets where it has excess 5G network capacity. Last quarter, it added 560,000 net new customers, which will likely prove to lead the industry.

T-Mobile ended Q2 with over 1.5 million home internet subscribers, well on its way to its goal of 7 million to 8 million subscribers by 2025. While that number appeared aggressive when T-Mobile first announced it, if it can continue to produce results like it did last quarter, the company will exceed that goal.

For reference, Verizon added 268,000 broadband subscribers, including 256,000 fixed wireless subscribers using its wireless network for home internet. AT&T lost a total of 25,000 customers as its fiber build-out added customers, but it lost legacy home internet connections.

T-Mobile's home internet service additions are part of its strategy of increasing revenue per account and making its service stickier. If you're bundling home internet with your wireless service, it's a lot harder to cancel. It's a strategy its rivals have been able to employ for years.

One-time charges are in the rearview mirror

T-Mobile's produced a net loss of $108 million last quarter. But make no mistake, the business is doing well. A couple of one-time charges chopped $877 million off the bottom line.

First, it saw a $477 million impairment charge to its wireline assets, which it acquired in the merger with Sprint. When T-Mobile shut down the Sprint wireless network, these wireline assets no longer supported the wireless business, and thus T-Mobile decided to write down the assets.

The other $400 million comes from a settlement the company made regarding its cybersecurity breach last summer.

T-Mobile continues to work through merger-related costs with Sprint, which totaled $1.67 billion last quarter, but those costs should come down quickly. It expects to complete the decommissioning of legacy Sprint network sites by the end of Q3, well ahead of its original schedule. As such, it thinks merger-related expenses peaked last quarter, and will taper off significantly in Q4.

Meanwhile, T-Mobile's outlook for the rest of the year continues to grow brighter. It raised its expectations for net postpaid subscriber additions, EBITDA, and free cash flow. That stands in stark contrast to the cash flow challenges AT&T warned of during its earnings call.

Overall, T-Mobile came out of the quarter looking stronger than ever and executing on all fronts. Investors should be very encouraged by the results.