After a stellar second quarter, T-Mobile US said revenues and adjusted EBITDA for the third quarter again reached record highs, helped by strong customer additions and record low postpaid phone churn. Total postpaid net additions went to 1.079 million, leading to another increase in the company’s full year outlook. T-Mobile US says it now sees postpaid net customer additions for the year at 3.8-4.1 million. It had previously estimated 3.0-3.6 million, and before that 2.6-3.3 million and 2-3 million.
The operator recorded 1.630 million total net additions in the quarter, higher than the 1.579 million taken on in the second quarter and 1.329 million brought in the year before. The 1.079 million postpaid net additions in the quarter compare to 1.017 million added in Q2 and 817,000 the year before.
There were 774,000 phone net customer additions, against 686,000 in Q2 and 595,000 year-on-year. Other postpaid customer additions went to 305,000, from 331,000 and 222,000, respectively. Prepaid net additions amounted to 35,000, boosted by Metro by T-Mobile launched earlier this month. The figure was down quarter-on-quarter (91,000 additions) and year-on-year (226,000). Postpaid phone churn fell by 21 base percentage points to 1.02 percent while for prepaid, it slipped to 4.12 percent from 4.25 percent.
Postpaid phone ARPU was off 1.6 percent to USD 46.17, pulled down by more people adopting tax inclusive plans, and the success of new customer segments such as T-Mobile for Business, T-Mobile One Unlimited 55+ and T-Mobile One Military, plus a decrease in the non-cash net benefit from Data Stash. The decreases were partially offset by a net reduction in service promotional activities. Prepaid ARPU fell 1.5 percent to USD 38.34.
Revenues went up 8.2 percent year-on-year to USD 10.839 billion, with service revenues going 5.7 percent higher to USD 8.066 billion and the adjusted EBITDA jumping 14.8 percent to USD 3.239 billion, buoyed by the adoption of new revenue standard and USD 138 million from hurricane paybacks. The net profit leaped 44.5 percent to USD 795 million or USD 0.93 per share, also helped by the new revenue standard and hurricane payback, partially offset by the impact of the proposed Sprint transaction of USD 53 million.
Operating cash flow fell 27 percent to USD 914 million. Cash purchases of property and equipment were also down, 5.5 percent lower to USD 1.362 billion, mainly from the continued deployment of low band spectrum.
The operator said it now covers 324 million people with LTE and still hopes to reach 325 million people by year-end. It has reached 1,500 cities and towns in 37 states and Puerto Rico with 600 MHz, and has 21 devices compatible with that band.
For the full year, the company sees adjusted EBITDA at USD 11.8-12.0 billion, a bit higher than its previous 11.5-11.9 billion forecast. The capex budget is unchanged at USD 4.9-5.3 billion, including spending on 5G.
