T-Mobile US announced another strong quarter of growth in Q3, with 1.7 million new customers added. The mobile operator also confirmed plans for an accelerated launch of its 5G network by year-end, using its spectrum in the 600 MHz band.
The quarterly revenues rose 2 percent to a record USD 11.1 billion, including 6 percent growth in service revenues. Adjusted EBITDA increased 5 percent to USD 3.4 billion, and net income rose 9 percent to USD 870 million or USD 1.01 per share.
T-Mobile increased its outlook for full-year capital expenditure by USD 200-300 million, for a total of USD 5.9-6.0 billion. This increased spending will go to launching nationwide 5G services by the end of the year. The 600 MHz spectrum already covers around 200 million people, in nearly 8,300 cities in the US, with 5G-ready LTE equipment. Over 26 million compatible devices already operate on the operator’s network.
Despite the higher spending, the company maintained its forecast for a CAGR of 46-48 percent in free cash flow over the period 2016-2019. Free cash flow rose 27 percent to USD 1.1 billion in Q3. The three-year CAGR in operating cash flow is now seen at 36-37 percent, from the previous guidance of 33-35 percent.
Customer growth in the latest quarter included 754,000 postpaid phone subscribers, 320,000 other postpaid lines and 62,000 prepaid users. T-Mobile claims the postpaid growth was the best in the US industry, and the company finished the period with a total of 84.18 million customers. The operator increased its guidance for the full year to 4.1-4.3 million new postpaid customers added, from an earlier outlook of 3.5-4.0 million.
Postpaid phone churn reached 0.89 percent in Q3, down from 1.02 percent a year ago, while ARPU was essentially flat at USD 46.22. T-Mobile said it expects a drop in postpaid phone ARPU in Q4 and an around 1 percent fall over the full year, due to the shift to unlimited plans.
The company slightly increased its guidance for adjusted EBITDA in the full year, to USD 13.1-13.3 billion, based on the strong performance in the first nine months. It also expects around USD 125-150 million in costs related to its merger with Sprint in Q4.
