T-Mobile US reported fourth-quarter revenues up 23 percent year-on-year to USD 10.2 billion, driven by the addition of 8.2 million new customers in the past year. Service revenues rose 11 percent to USD 7.2 billion, and the company's adjusted EBITDA improved 12 percent to USD 2.5 billion. Net profit increased 31 percent to USD 390 million or USD 0.45 per share and was up 81 percent when excluding gains on spectrum transactions.
As reported earlier, T-Mobile added 2.1 million new customers in Q4. That includes 1.2 million branded postpaid customers, of which 933,000 with phones. Branded postpaid phone churn fell to 1.28 percent, a decrease of 18 basis points from a year ago, while ARPU increased 0.7 percent year-on-year to USD 48.37.
T-Mobile also gained 541,000 prepaid users in Q4, and 363,000 wholesale customers. T-Mobile said wholesale numbers will be much lower this year, as MVNOs focus less on the subsidised Lifeline programme and more on higher-ARPU customers.
T-Mobile forecast adjusted EBITDA stable to higher in 2017, at USD 10.4-10.8 billion, and gave a conservative forecast of 2.4-3.4 million new postpaid customers this year. In 2016, the operator added 4.1 million postpaid customers, exceeding its guidance, which was increased several times in the course of the year.
The company also forecast a CAGR of 15-18 percent over the next three years in operating cash flow and 45-58 percent in free cash flow. Free cash flow in 2016 doubled to USD 1.4 billion. T-Mobile plans another increase in capital expenditure this year as well, to USD 4.8-5.1 billion from USD 4.6 billion in 2016.
The company said it will continue to refarm 2G and 3G spectrum to boost its LTE coverage, with already 70 percent of its spectrum devoted to 4G at the end of 2016, versus 52 percent a year earlier. It's also boosted its 700 MHz holdings with the recent acquisition of a block in Chicago in Q4 and another one in Eastern Montana in Q1. This brings its total low-band spectrum holdings to 272 million POPs. Its 'Extended Range LTE' service using the 700 MHz band already covers 252 million people.
