T-Mobile Reports Q1

Announces $1.39B operating income before depreciation and amortization in Q1 2010

May 12, 2010

4 Min Read

BELLEVUE, Wash. -- T-Mobile USA, Inc. (“T-Mobile USA”) today reported first quarter of 2010 results. In the first quarter of 2010, T-Mobile USA reported OIBDA of $1.39 billion, compared to $1.38 billion reported in first quarter of 2009. Total customers served declined by 77,000 in the first quarter of 2010 compared to 415,000 net customer additions in the first quarter of 2009. Additionally, customers using 3G-capable converged devices continued to increase significantly during the quarter.

“As T-Mobile USA continues to drive data as a revenue growth engine, we experienced meaningful traction in the first quarter of 2010 by getting a host of next-generation smartphones into the hands of our customers. Products like our popular myTouch 3G and HTC HD2, coupled with our industry-leading data value message, continued our strong year-over-year data revenue growth," said Robert Dotson, President and CEO, T-Mobile, USA. “We also continue to make real improvements to reduce churn of our most valuable customers, and we are making major leaps in expanding our HSPA+ footprint – the fastest and soon-to-be the most widely available higher-speed network in the country."

René Obermann, Chief Executive Officer, Deutsche Telekom, said, “T-Mobile USA achieved a slightly higher margin and strong data ARPU, despite a challenging and highly competitive business environment. In addition, the strong growth in customers with 3G smartphones, plus expanding the HSPA+ network and pipeline of innovative offerings, positions T-Mobile USA to capture the data opportunity in the United States.”

Customers

  • T-Mobile USA served 33.7 million customers at the end of the first quarter of 2010, down from 33.8 million at the end of the fourth quarter of 2009 and up from 33.2 million at the end of the first quarter of 2009.

  • In the first quarter of 2010, total customers served declined by 77,000, compared to net customer additions of 371,000 in the fourth quarter of 2009 and 415,000 in the first quarter of 2009.

  • Compared to the fourth quarter of 2009, the number of net new customer additions decreased due primarily to T-Mobile branded customer losses (total wireless customers excluding mobile virtual network operators (MVNO) and connected devices). In the fourth quarter of 2009, branded customer additions benefited from strong holiday sales and the launch of the new Even More and Even More Plus rate plans which feature unlimited voice, text and data services.

  • Net contract customer losses were 118,000 in the first quarter of 2010, broadly stable compared to 117,000 net contract customer losses in the fourth quarter of 2009, but down from 160,000 net contract customer additions in the first quarter of 2009.

  • Sequentially, seasonally lower gross additions of branded products were offset by connected device growth.

  • The decrease in contract customer additions compared to the first quarter of 2009 was due primarily to fewer FlexPaysm contract customer additions.

  • Prepaid net customer additions, including MVNO customers, were 41,000 in the first quarter of 2010, down from 488,000 in the fourth quarter of 2009 and 255,000 in the first quarter of 2009.

  • In the first quarter of 2010, lower MVNO net customer additions were the primary reason for the sequential and year-over-year decrease in prepaid additions. MVNO customers totaled 2.1 million at March 31, 2010.

  • Additionally, seasonally fewer gross branded prepaid customer additions caused lower sequential prepaid net customer additions.

  • Contract customers, including connected devices, comprised 79% of T-Mobile USA’s total customer base at March 31, 2010, consistent with the fourth quarter of 2009 but down from 81% in the first quarter of 2009.



Churn

  • Blended churn, including both contract and prepaid customers, was 3.1% in the first quarter of 2010, down from 3.3% in the fourth quarter of 2009 and was consistent with the first quarter of 2009.

    • Contract churn decreased in the first quarter of 2010 to 2.2% from 2.5% in the fourth quarter of 2009 and 2.3% in the first quarter of 2009.

    • The sequential fall in churn was due primarily to the fourth quarter being seasonally higher due to the holiday season, consistent with previous years.



    OIBDA and Net Income

    • T-Mobile USA reported OIBDA of $1.39 billion in the first quarter of 2010, consistent with $1.38 billion in the fourth quarter and first quarter of 2009.

    • In the first quarter of 2010, lower revenues were offset by lower acquisition costs, related to fewer branded customer additions, and sequentially lower advertising spend.

    • OIBDA margin was 30% in the first quarter of 2010, consistent with the fourth quarter of 2009 and slightly up from 29% in the first quarter of 2009.

    • Net income in the first quarter of 2010 was $362 million, compared to $306 million in the fourth quarter of 2009 and $322 million in the first quarter of 2009.



    T-Mobile US Inc.

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