T-Mobile US increased its outlook for full-year growth after solid results in the first quarter. The company added a net 1.0 million postpaid customers in Q1 and said it expects to grow by 2.6-3.3 million over the full year, up from a forecast in February for growth of 2-3 million in 2018.
In total, T-Mobile gained 1.4 million new customers in Q1, to take its base to just over 74 million at the end of March. The quarterly growth includes 617,000 postpaid phone customers, 388,000 postpaid other devices such as wearables and 199,000 new prepaid customers. Postpaid phone growth was down from a year earlier, which T-Mobile blamed on "aggressive" competition and promotions in the market. Postpaid phone churn reduced to 1.07 percent, while ARPU was down slightly year-on-year to USD 46.66, hurt by promotions and new accounting standards.
Total revenues rose 8.8 percent to USD 10.5 billion, with service revenues up 6.5 percent to USD 7.8 billion. Adjusted EBIDTA increased 10.8 percent to USD 3.0 billion, while net profit was down 4 percent to USD 671 million after one-time tax and spectrum gains in the year-earlier period. Operating cash flow rose 27 percent to USD 770 million, while cash capex fell 10.6 percent to USD 1.4 billion.
The company reported little change in its LTE coverage in the quarter but reiterated its target to reach 325 million people by year-end. The deployment of 600 MHz band frequencies grew to 823 cities in 31 states, and when combined with 700 MHz use, reaches nearly 285 million people. T-Mobile confirmed it will bring 5G to 30 cities in 2018 using both 600 MHz and millimeter wave spectrum. The network will harness 4G and 5G bandwidths simultaneously and will be ready for the introduction of the first 5G smartphones in the first half of 2019, the company said.
T-Mobile said it also spent USD 666 million buying back shares in Q1, and its main shareholder Deutsche Telekom acquired another 3.3 million shares with a market value of USD 200 million. Its share buyback programme is suspended pending the merger deal with Sprint. If the Sprint deal does not go ahead, T-Mobile has authorised spending another USD 7.5 billion on share repurchases through 2020.
For the full year, the outlook for adjusted EBITDA was increased to USD 11.4-11.8 billion from a forecast in February of USD 11.3-11.7 billion. Including the estimated impact of the new revenue accounting standard, adjusted EBITDA is expected to increase by an additional USD 0.2-0.5 billion for a total guidance range of USD 11.6-12.3 billion. The capex budget is maintained at USD 4.9-5.3 billion, including spending on 5G.
