T-Mobile Q1 2014: service revenue up 33%, adds 2.4 million new users

T-Mobile US today said its Un-carrier strategy started resulting into the addition of 2.4 million new subscribers and 33.3 percent services revenue growth in Q1 2014.

Besides its Un-carrier revolutionary and budget plans that challenged rivals such as AT&T, Verizon, Sprint, etc., T-Mobile’s focus on network modernization and telecom infrastructure roll out has also assisted the American mobile operator, which is facing take over by rival Sprint, partly owned by Japanese SoftBank, to improve revenue and customer growth.

T-Mobile Capex

T-Mobile said its Capex (capital spending) will be in the range of $4.3 to $4.6 billion in 2014. In Q1 2014, T-Mobile Capex increased to $947 million from $882 million in the fourth quarter of 2013 but down from $1.2 billion on a pro forma combined basis in the first quarter of 2013.

John Legere, president and CEO of T-Mobile

It focused on investment in network modernization and 4G LTE deployment.

T-Mobile subscriber based increased by 2.4 million to nearly 49.1 million customers. The company significantly grew its total branded customer base, with 1.8 million net customer additions during the quarter.

Branded postpaid churn rate was approximately 1.5 percent for the first quarter of 2014, down 20 basis points versus the fourth quarter of 2013 and an improvement of 40 basis points compared to the first quarter of 2013, said T-Mobile US.

T-Mobile Q1 2014 Revenue

T-Mobile Q1 2014 total revenue rose 47 percent. This revenue included income from MetroPCS.

Without the inclusion of MetroPCS, T-Mobile revenue would have increased 15.3 percent due to higher equipment sales and growth in service revenues.

Service revenues increased 33.3 percent due to the inclusion of MetroPCS. Sequential growth was 3.3 percent.

Withough MetroPCS, service revenues for the first quarter of 2014 increased 4.5 percent. In the fourth quarter of 2013, service revenues had declined by 1.1 percent.

John Legere, president and CEO of T-Mobile, is considering that the growth reflects the company’s Un-carrier strategies.

“We are approaching 50 million customers, added 2.4 million net new customers in the first quarter alone, and posted our fourth quarter of consecutive service revenue growth,” said Legere.

The company said Q1 2014 adjusted EBITDA dipped 12.2 percent to $1.1 billion, reflecting increased equipment sales due to the significant acceleration in customer growth and the success of the Un-carrier 4.0 – Contract Freedom offer. Adjusted EBITDA margin was 20 percent compared to 24 percent in the fourth quarter of 2013.

T-Mobile is expecting to add 2.8 and 3.3 million branded postpaid net additions for 2014. This will be mainly due to the success of its Simple Choice plan and the evolution of the Un-carrier strategy in the coming months.

Baburajan K
[email protected]