The US carrier has enjoyed the 8th consecutive quarter with over one million total net additions to the network, with Q1 totalling 1.8 million. 1.1 million of said total were subscribed to the core T-Mobile brand. As for finances, the company still expects to report the leading year-on-year revenue growth for total revenue. $7.8 billion was reported for Q1, a 13.1% increase over the same quarter last year.
It's not all good news as quarter-on-quarter revenue was reported to be down by 0.9% due to the impact of Data Stash. T-Mobile continues to operate aggressive programs and campaigns that affect short term earnings, but the company is adding subscribers at a steady rate and it'll have to be seen whether these additions will help bolster future reports.
T-Mobile CEO John Legere commented on today's report:
See the full press release below for more details.
BELLEVUE, Wash. – April 28, 2015 – T-Mobile US, Inc. (NYSE: TMUS) today reported first quarter 2015 results reflecting strong momentum and industry-leading growth. The Company again outperformed the competition in both subscriber and financial growth metrics.
"We've had eight consecutive quarters with more than one million total net customer additions proving that customers want value," said John Legere, President and CEO of T-Mobile. "We expect to once again capture all of the industry's postpaid phone growth in Q1 and we've done it while delivering an all-time record low 1.3% churn. #WeWon'tStop."
Un-Carrier Delivering Results
Since launching Un-carrier™ in 2013, T-Mobile has disrupted the wireless industry with innovations such as No Annual Service Contracts, equipment installment plans, the JUMP! ® device upgrade program, free international data roaming, Contract Freedom™, T-Mobile Test Drive™, Music Freedom™, Wi-Fi Un-leashed, and Data Stash™. In the first quarter of 2015, the Company again expanded the Un-carrier lineup with:
- Un-carrier 9.0: Business Un-leashed: T-Mobile introduced a set of simple, transparent, and affordable rate plans that provide all business customers with unlimited talk and text, and 1GB of 4G LTE data. Additional data can either be purchased on a per line or pooled basis. T-Mobile is also partnering with GoDaddy and Microsoft Office 365 to provide a valuable array of mobile business tools free of charge, as well as extending a benefit to families with Business Family Discounts by counting a company-paid line as the first line on a family's Simple Choice™ account.
- The Un-contract™: The Un-contract initiative is a guarantee to all Simple Choice customers that their rates will never increase as long as they remain a customer, even for those on promotional plans. Unlimited 4G LTE rate plans are guaranteed for a minimum of two years.
- Carrier Freedom™: The Company will pay off outstanding device payments of up to $650 per line for up to 10 lines when customers switch to T-Mobile.
Operational and Financial Highlights for the First Quarter 2015
T-Mobile continues to deliver strong customer growth and ended the first quarter of 2015 with 56.8 million total customers. In the first quarter of 2015, T-Mobile added 1.8 million net new customers, marking the eighth consecutive quarter that the Company has generated more than one million net customer additions.
In the first quarter of 2015, branded postpaid net customer additions were 1.1 million, including 991,000 phone net customer additions – expected to be the highest in the U.S. wireless industry once again - and 134,000 mobile broadband net customer additions.
Branded postpaid phone churn was 1.30% in the first quarter of 2015, down 17 basis points year-over-year and 43 basis points sequentially. The year-over-year improvement in churn reflects ongoing improvements in the Company's network, customer service, and the overall value of its offerings in the marketplace, resulting in increased customer satisfaction and loyalty. The sequential improvement was due to seasonal factors as well as a reduction in competitive activity compared to the fourth quarter of 2014.
T-Mobile's branded prepaid net customer additions were 73,000 in the first quarter of 2015. The lower level of branded prepaid net additions in the quarter was driven by increased migrations from prepaid to postpaid, increased competitive activity in the marketplace, and an atypical tax refund season. Branded prepaid to branded postpaid migrations were 195,000 in the first quarter of 2015.
Branded prepaid churn was 4.62% in the first quarter of 2015, down 77 basis points sequentially and up 28 basis points year-over-year.
Total device sales, including both branded postpaid and prepaid customers, were 8.8 million units in the first quarter of 2015, of which total smartphone sales were 8.0 million units.
In addition to strong customer growth, T-Mobile delivered outstanding financial results. In the first quarter of 2015, the Company is expected to again report the fastest year-over-year revenue growth in the industry for both service and total revenues. Service revenues for the first quarter of 2015 grew by 9.0% year-over-year, primarily due to rapid growth in the Company's customer base, partially offset by lower branded postpaid phone Average Revenue per User (ARPU) and the non-cash net revenue deferral for Data Stash. On a sequential basis, service revenues declined by 0.9% primarily due to the impact of Data Stash. Excluding the impact of Data Stash, service revenues in the first quarter of 2015 increased 0.9% sequentially and 11.0% year-over-year.
T-Mobile's total revenues for the first quarter of 2015 grew by 13.1% year-over-year due to continued growth in equipment sales revenues and service revenues. On a sequential basis, total revenues decreased by 4.6% due to lower equipment sales revenues compared to strong holiday season sales in the fourth quarter of 2014.
Branded postpaid Average Billings per User (ABPU) was $60.94 in the first quarter of 2015, down 1.4% sequentially and up 2.4% year-over-year. Excluding the impact of Data Stash, branded postpaid ABPU in the first quarter of 2015 increased 0.6% sequentially and 4.5% year-over-year.
Branded postpaid phone ARPU decreased sequentially by 3.8% to $46.43, driven primarily by the net revenue deferral for Data Stash and dilution resulting from promotional activities targeting families, including the "4 for $100" offer. Excluding the impact of Data Stash, branded postpaid phone ARPU in the first quarter of 2015 declined by 1.2% sequentially and 5.5% year-over-year. Branded prepaid ARPU increased by 4.8% year-over-year and 0.8% sequentially to $37.81.
Branded postpaid Average Revenue per Account (ARPA) was $108.04 in the first quarter of 2015, down 0.9% year-over-year and 1.7% sequentially. Excluding the impact from Data Stash, branded postpaid ARPA in the first quarter of 2015 increased 1.1% sequentially and 1.9% year-over-year. Branded postpaid Average Billings per Account (ABPA) amounted to a record $145.03 in the first quarter of 2015, an increase of 11.8% year-over-year and 0.9% sequentially. The increase in ABPA was primarily due to growth in EIP billings as well as an increase in the number of branded postpaid customers per account.
Adjusted EBITDA for the first quarter of 2015 was $1.388 billion, up 27.6% year-over-year and down 20.7% sequentially. Year-over-year, the increase was primarily due to higher branded postpaid and prepaid revenues from growth in the customer base. Sequentially, the decline in Adjusted EBITDA was primarily due to the impact from Data Stash as well as strategic investments in growth in the early part of 2015, consistent with the Company's previously announced intentions. The non-cash revenue deferral for Data Stash reduced Adjusted EBITDA by $112 million in the first quarter of 2015. The revenue deferral for the initial 10GB allotment per qualifying customer from Data Stash is expected to fully reverse itself during 2015. The Adjusted EBITDA margin was 24% for the first quarter of 2015, up from 20% in the first quarter of 2014.
T-Mobile made strategic investments in growth in the first quarter of 2015 resulting in a loss per share of $(0.09) in the first quarter of 2015 compared to a loss per share of $(0.19) in the first quarter of 2014. T-Mobile expects earnings per share to be positive in all the remaining quarters and full-year 2015.
Network Expansion and Capital Expenditures
T-Mobile's 4G LTE network – America's Fastest – covered 275 million people at the end of the first quarter of 2015 and the Company is targeting coverage of 300 million people by year-end 2015. T-Mobile is rapidly deploying Wideband LTE, while at the same time rolling out 4G LTE on its 700 MHz A-Block and 1900 MHz PCS spectrum. Wideband LTE is currently available in 157 market areas and is now expected to be available in more than 200 market areas by year-end 2015. The Company continues to deploy its 700 MHz A-Block spectrum with major market launches in Houston, Dallas, Philadelphia, Tampa, San Antonio, and Detroit so far in 2015, bringing the total to 55 market areas.
Cash capital expenditures reflect T-Mobile's continued investment in the expansion of its 4G LTE network. In the first quarter of 2015, cash capital expenditures were $982 million, down from $1.3 billion in the fourth quarter of 2014 and up from $947 million in the first quarter of 2014.
In January 2015, the FCC announced that T-Mobile was the winning bidder for AWS-3 spectrum licenses covering approximately 97 million people for an aggregate bid price of $1.8 billion. T-Mobile paid the FCC $1.4 billion for the AWS-3 spectrum licenses in February 2015, which was net of the $0.4 billion deposit paid to the FCC in October 2014. T-Mobile received the AWS-3 spectrum licenses early in the second quarter of 2015.
The MetroPCS customer base continues to rapidly migrate off the legacy CDMA network. Currently, less than 500,000 customers remain on the MetroPCS CDMA network. Approximately 80% of the MetroPCS spectrum had been re-farmed and integrated into the T-Mobile network at the end of the first quarter of 2015.
In the first quarter of 2015, T-Mobile decommissioned the CDMA portion of the MetroPCS networks in Atlanta and the Detroit metro area, bringing the overall total to 8 market shutdowns so far, with only 3 major markets left. Total decommissioning costs for CDMA network shutdowns amounted to $128 million in the first quarter of 2015. The Company expects to decommission all the remaining CDMA markets in 2015, and expects to incur additional network decommissioning costs in the range of $375 to $475 million with substantially all the costs to be recognized in 2015.
2015 Outlook Guidance
T-Mobile expects to drive further customer momentum while delivering strong growth in Adjusted EBITDA. With the success of its Simple Choice plan and the continued evolution of the Un-carrier strategy, branded postpaid net customer additions for 2015 are now expected to be between 3.0 and 3.5 million, an increase from the previous guidance of 2.2 and 3.2 million.
For the full-year of 2015, T-Mobile expects Adjusted EBITDA to be in the range of $6.8 to $7.2 billion, unchanged from previous guidance despite the increase in branded postpaid net customer additions guidance.
Cash capital expenditures for 2015 are expected to be in the range of $4.4 to $4.7 billion, also unchanged from previous guidance.
Quarterly Financial Results
For more details on T-Mobile's first quarter 2015 financial results, including the Investor Factbook with detailed financial tables and reconciliations of certain non-GAAP measures disclosed in this release to the most comparable measures under GAAP, please visit T-Mobile US, Inc.'s Investor Relations website at http://investor.T-Mobile.com.
Rich Edmonds is Senior Editor of PC hardware at Windows Central, covering everything related to PC components and NAS. He's been involved in technology for more than a decade and knows a thing or two about the magic inside a PC chassis. You can follow him over on Twitter at @RichEdmonds.
Of which less than 3% is WP
Sounds like this U.S. carrier knows what it's doing. :)
Is it just me or does it seem like all of the major carriers claim to be adding millions of new customers every quarter... didn't realize US population is increasing quite that rapidly. :P ps. Wincentral webpage layout sucks - too big graphic element and too much scrolling.
We re-spawn by the millions.
Haha. I am sure within a few rounds of comments we can get to an informed and well balanced discussion on immigration. :P
Never been a problem with immigration. The US was founded upon immigration. The problem is illegal immigration. There is a process for legal immigration, and all immigrants are expected to follow that process. When they don't, there is voiced concern. When that concern is voiced, it is challenged by claims of racism. There is no winning the debate on either side.
Haha, that was even easier than I expected.
The devil is in the details. If you read carefully, you'll see that the AT&T and Verizon net subscriber additions were tablets and both carriers lost phone customers.
Let's hope they start getting more higher end Windows Phones.
If T-Mobile only was as cool here in Germany ...
Now they just need to extend their network to stop congestion and they'll be good to go.
Do these net subscriber adds firmly make them the #3 carrier in the US now?
TMo took the #3 slot from Sprint a year ago already. (I didn't think it had been that long, but that's what my Bing search turned up.)
I like TMO but if they don't upgrade their customer account systems they will hit a critical mass soon. I've had nothing but problems with account management since I recently converted from prepaid to postpaid. Other than that, keep it up TMO!
Nice to see T-Mobile growing in terms of customers. However, shrinking ARPU might be alarming for shareholders and the mothership, Deutsche Telekom, who has been looking to divest its American venture for a while. If T-Mobile can start making money, it'd be very welcome as I don't want T-Mobile to end up folding and lose all the great things they've been doing lately.
There seems to be growing consensus that Deutsche Telekom is no longer looking to offload TMO USA.
I find it frustrating that T-Mobile gets all this coverage while their Windows Phone selection I'd the LEAST appealing of all the networks. Their last flagship was the 925. They didn't even get the 640XL.
+925. And we are still waiting for the regular 640 to be available for sale. I don't get the many weeks of waiting after announcement. I also hope the 640 shows up in stores. The HTC M8 WP edition didn't see the light of any stores, except a few short weeks in the Microsoft Store.
Talk about perception! :) From my point of view, I would have thought that they lost a whole lot of customers. I've been a T-Mobile customer for the past 12 years. After moving, I had nothing but problems with reception even though the coverage map shows 100% coverage in my area. WiFi Calling wasn't available to me because I had brought my own phone. Over the years, I converted a lot of my friends and, after a brief moment, every single one of them reverted back to their old carrier or went with Cricket / AIO instead. If T-Mobile doesn't improve their network coverage, I don't see how they'll be able to keep their customers, especially where there are more options and attractive plans with other carriers than ever before.
Here's the disconnect with your "perception". Most people who are joing T-Mobile live in Big cities. In these cities, T-Mobile's service is almost perfect. In fact, some would argue it's SIGNIFICANTLY better than the competition's. Now, pair that with their aggressive pricing and NO CONTRACTS and you will understand why T-Mobile is not going anywhere. So, you can keep predicting its demise based on what you are seeing around you, and you will continue to be proven wrong every quarter.
Except you're confusing "perception" with "prediction". Next time you reply to a comment, you may want to open up a dictionary in a second tab. That way, you won't put something into my original comment and imply something I didn't say.
I have been a T-Mobile customer for 15 years and what a difference between them and now keep up the awesome job John Legere & T-Mobile #1
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