T-Mobile US reported another quarter of strong customer growth and raised its outlook for the full year. The company gained 1.14 million new customers in the first quarter, including 914,000 branded postpaid subscribers, for a total 72.6 million at end-March. It now expects to add 2.8-3.5 million broadband postpaid users over the full year 2017, up from an earlier outlook of 2.4-3.4 million net additions.
The customer growth was slower than Q4 and the first quarter of 2016, but T-Mobile said it is still showing the strongest growth in the industry. The mobile operator saw an 11 percent annual increase in quarterly service revenues to USD 7.3 billion, driven by the customer growth and a 2.9 percent increase in branded postpaid phone ARPU.
Total revenues also grew 11 percent, to USD 9.6 billion, while adjusted EBITDA was down 5 percent to USD 2.7 billion due to gains on spectrum transactions a year ago. Excluding these, adjusted EBITDA rose 21 percent. Net profit increased 46 percent to USD 698 million, also helped by tax benefits from a valuation allowance release.
T-Mobile increased cash capital expenditures by 14 percent year-over-year in Q1 to USD 1.5 billion. Operating cash flow rose by USD 688 million from a year ago to USD 1.7 billion, primarily from changes in working capital, leading to positive free cash flow of USD 185 million in Q1.
The operator said it will continue to refarm spectrum in order to expand its LTE network this year to 321 million people, from 314 million currently. It also plans to open around 3,000 stores during 2017 to help keep up with the growing customer base; half of the new stores will be under the MetroPCS brand. The total cash capex budget remains at USD 4.8-5.1 billion for the full year, and T-Mobile maintained its outlook for annual adjusted EBITDA of USD 10.4-10.8 billion.
