T-Mobile US Continues Successful Attack in Q2

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T-Mobile US added 1.5 million new customers in its Q2; the fifth consecutive quarter when T-Mobile US added more than one million net customers said John Legere, T-Mobile US CEO.

Overall, T-Mobile US has added 7.6 million net new customers over the past 15 months. During the second quarter, T-Mobile US added more postpaid accounts than the other three national mobile service providers combined.

As a result, T-Mobile US grew its quarterly revenue eight percent, year over year. T-Mobile US also captured virtually all growth in the prepaid customer segment during the quarter.

T-Mobile US service revenue was up seven percent, year-over-year as well. And T-Mobile US booked adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $1.45 billion, growing 33.4 percent quarter-over-quarter.

T-Mobile US had branded postpaid phone net adds of 579,000 and branded prepaid net adds of 102,000, with tablets responsible for mobile broadband net additions of 329,000, up by a factor of five compared to the prior quarter.

At the same time, T-Mobile US saw record low branded postpaid phone churn of 1.5 percent, flat year-over-year and sequentially.

“This company has completely transformed and changed trajectory in an insanely short time,” said Legere.

The T-Mobile US challenge is to sustain high rates of subscriber growth, as its aggressive marketing efforts will lead to lower average revenue per account.

In fact, in the second quarter, branded postpaid phone average revenue per user (ARPU) decreased sequentially by 2.3 percent to $49.32, due to customer adoption of lower-cost plans.

But a couple of non-recurring items, including regulatory surcharges and a revenue adjustment for expected customer refunds on premium SMS charges, also affected service ARPU.

Adjusting for these non-recurring items, branded postpaid phone ARPU would have declined by $0.55 or 1.1 percent sequentially to $49.93, T-Mobile US says.

Branded postpaid “average billings per user (ABPU),” which consists of branded postpaid service revenues plus equipment installment plan billings divided by the average branded postpaid customers in the period, was $59.79 in the second quarter of 2014, up 1.8 percent compared to the second quarter of 2013 and up 0.4 percent compared to the first quarter of 2014.

Branded prepaid ARPU increased by 3.0 percent in Q2 of 2014 to $37.16 compared to the first quarter of 2014.

One way or the other, Legere has said, T-Mobile US needs more scale. Organic growth helps. But a combination with Sprint would help T-Mobile US get the scale it requires, much faster.




Edited by Maurice Nagle

Contributing Editor

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