T-Mobile US reports record Q4, FY results

Thursday 8 February 2018 | 16:16 CET | News

T-Mobile US said revenues and profit hit record levels in the fourth quarter, pushing full year results to its best levels. CEO John Legere touted the fact that for the fourth year in a row, the company added over 5 million total customers, with the figure including 2.8 million branded postpaid phone customers.  

For the quarter, service revenues advanced 7.1 percent from the year before to a record USD 7.8 billion, while total revenues rose 5.1 percent to USD 10.8 billion. The results were achieved despite a lower contribution from equipment sales in the quarter, as people upgraded their handset less and on the back of more handset promotions. Adjusted EBITDA lifted 4 percent to USD 2.7 billion. The net profit and earnings per share surged almost 600 percent, propelled by a one-time net tax benefit of USD 2.2 billion recognised in the quarter, plus after after-tax spectrum gains of USD 1.24 million. Net hurricane losses amounted to USD 40 million for the quarter, and USD 130 million for the full year. More will be incurred looking forward, mainly related to operations in Puerto Rico.The net profit increased to 2.7 million or USD 3.11 per share, from a profit the year earlier of 390 million or 0.45. Net cash from operating activities increased 28.5 percent to 2.1 billion, with free cash flow going 53 percent higher to USD 1.1 billion. 

For the full year, service revenues rose 8.3 percent to USD 30.2 billion, while total revenues lifted 8.3 percent to 40.6 billion. The net profit meanwhile advanced to USD 4.5 billion or USD 5.20, from 1.460 billion and 1.69 per share. Adjusted EBITDA went higher to USD 11.2 billion from 10.6 billion, passing expectations. The net cash from operating activities lifted almost 30 percent to USD 8.0 billion and the free cash flow by over 90 percent to USD 2.7 billion.  

In Q4, the operator added 1.854 million net new customers, including 891,000 million branded postpaid phone net customer additions and 149,000 branded prepay. The latter was off on the back of higher deactivations from a growing customer base, increased competition and the de-emphasis of the legacy T-Mobile prepaid brand. The total base reached 72.585 million customers. Branded postpaid net additions reached 1.072 million in the quarter. Postpaid phone churn fell 10 basis points from the year before to 1.18 percent, while ARPU was off 4.1 percent year-on-year at USD 46.38. Branded prepaid ARPU amounted to USD 38.63, up 1.1 percent. 

T-Mobile US said it expanded its LTE coverage to 322 million people by the end of 2017. By the end of 2018, it is targeting a population coverage of 325 million and a geographic coverage of 2.5 million square miles. Regarding 600 MHz, the company lit up the spectrum in 586 cities and towns in 28 states across the country, covering 300,000 square miles by the end of last year. Two 600 MHz compatible devices were available for the 2017 holiday season; a dozen compatible smartphones will be rolled out this year. Finally, using its 600 MHz spectrum holdings, T-Mobile US will seek to deploy the country’s first nationwide 5G network by 2020. 

Looking ahead to this year, the company expects postpaid net customer additions at 2-3. The company is guiding for adjusted EBITDA at USD 11.3-11.7 billion. Including the impact of the company’s new revenue standard, adjusted EBITDA will increase by an additional USD 0.2-0.5 billion for a total range of USD 11.5-12.2 billion.

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