T-Mobile US added 1.4 million new customers in the first quarter, claiming the best performance in the industry and taking its total base to 103.4 million. After 1.2 million postpaid net additions, the operator raised its outlook for full-year growth to 4.4-4.9 million new postpaid subscribers from a previous outlook of 4.0-4.7 million. The company also raised its EBITDA and cash flow forecasts for 2021, helped by synergies from the Sprint merger coming through faster than expected.
Revenues in Q1 jumped to USD 14.2 billion from USD 8.8 billion a year ago, following the takeover of Sprint in April 2020. Core adjusted EBITDA, which is adjusted EBITDA less lease revenues, increased to USD 5.9 billion from USD 3.5 billion, while net profit dipped to USD 933 million from USD 950 million.
Core adjusted EBITDA for the full year is expected to reach USD 22.8-23.2 billion, an increase from prior guidance of USD 22.6-23.1 billion. This is supported by an expected USD 2.8-3.1 billion in merger synergies, more than double the amount achieved last year and up from the previous estimate of USD 2.7-3.0 billion for 2021.
T-Mobile said it ended the quarter with approximately 20 percent of Sprint customers moved to the T-Mobile network and around half of Sprint customer traffic carried on the T-Mobile network, twice as much as last quarter. The company also began mapping Sprint customers to TMobile rate plans and preparing for a transition to its billing system.
Cash capex in the quarter reached USD 3.2 billion, up from USD 1.8 billion a year ago as the company focused on integrating Sprint and expanding the 5G network. Operating cash flow grew to USD 3.7 billion, and free cash flow nearly doubled, to USD 1.3 billion.
For the full year, T-Mobile expects to reach the high end of its capex budget of USD 11.7-12.0 billion, while merger-related costs were upped to USD 2.7-3.0 billion from a previous range of USD 2.5-3.0 billion. These costs are excluded from core adjusted EBITDA but will impact net income and cash flows. The forecast for operating cash flow was still increased to USD 13.2-13.6 billion from USD 13.0-13.5 billion, and free cash flow is estimated at USD 5.1-5.5 billion, up from the prior guidance of USD 4.9-5.4 billion.
