T-Mobile US annoucned another quarter of record results. Net profit rose 20 percent to USD 939 million, revenues increased 4 percent to USD 11.0 billion, and the adjusted EBITDA was up 7 percent to USD 3.5 billion. The mobile operator increased its guidance for branded postpaid net additions in the full year to 3.5-4.0 million, after adding 1.1 million in Q2.
The company also raised the EBITDA target, to USD 12.9-13.3 billion in 2019 from an earlier forecast of USD 12.7-13.2 billion. T-Mobile expects capex to reach the high end of its outlook of USD 5.4-5.7 billion this year, as it continues to roll out 600 MHz spectrum and prepares for a 5G launch in H2.
The company said it plans to launch 5G on a broad 600 MHz footprint later this year when compatible smartphones are available, and reach a nationwide 5G network in 2020. The 600MHz spectrum already covers 156 million PoPs, and there are over 22 million compatible devices on T-Mobile's network.
The higher spending led to a narrowed range for the three-year CAGR in operating cash flow of 33-35 percent.
While no announcement was made yet on its merger with Sprint, T-Mobile said it expects to book USD 150-200 million in pre-close merger-related costs in Q3. An announcement on the deal is expected to be imminent, as T-Mobile delayed its conference call on Q2 results twice within 24 hours.
T-Mobile's total customer growth in Q2 reached 1.75 million net additions, of which 1.11 million were postpaid. Of the latter, 710,000 were phone customers, which the company claims is the best performance in the industry, and 398,000 used other devices; both numbers were better than a year earlier. T-Mobile also added 131,000 prepaid users in the quarter, taking its total customer base to 83.05 million at the end of June.
While hardware sales fell in Q2, service revenues lifted 6 percent to USD 8.4 billion. Postpaid phone ARPU was down 0.9 percent to USD 46.10, hurt by the ongoing success of T-Mobile's Netflix offer and tax-inclusive plans. The operator recently adjusted its pricing so customers pay more for the Netflix service. For 2019 as a whole, T-Mobile expects largely stable ARPU, within a range from plus 1 percent to minus 1 percent.
