T-Mobile (TMUS, Financial) announced its first quarter 2015 results on April 28. The telecom provider’s result was a true reflection of solid momentum and aggressive growth. This time again the company outclassed its rivals in both subscriber addition and other key financial metrics. Here’s a quick look at the company’s quarterly stats, it’s equation with Sprint, and the road ahead.
The Un-carrier approach is fetching results
T-Mobile has changed the wireless industry beyond imagination with its un-carrier approach and innovations. Some of them include No Annual Service Contracts, the JUMP! device upgrade program, Wi-Fi Un-leashed, free international data roaming, equipment installment plans, T-Mobile Test Drive™, and Data Stash™.
The company’s effort to alter the way the American wireless industry works isn’t over yet. In the first quarter, T-Mobile introduced Un-carrier 9.0: Business Un-leashed, the Un-contract™, and Carrier Freedom™.
By the numbers
T-Mobile’s consolidated revenue rose 13.1% to $7.8 billion, thanks to the impressive growth in revenues from equipment sales and service. Service revenue was up 9% to $5.8 billion compared with last year figure. The rise is attributable to the growth in customer base, the growing popularity of T-Mobile’s un-carrier approach, and the synergies from MetroPCS. Equipment sales revenue came in at $1.851 billion, which is an increase of 27.8% from last year. Growth in equipment revenue was supported by higher device sales.
The fourth largest telecom player’s adjusted EBITDA was up a staggering 27.6% to $1.4 billion, despite the fact that the company had to invest in customer growth. Higher branded postpaid and prepaid revenue assisted the company see such strong growth in operating income. T-Mobile reported loss per share of $0.09 a share compared with a loss of $0.19 a share in the first quarter of 2014. The company expects to see positive earnings in the rest of the year.
T-Mobile’s branded postpaid average revenue per user (ARPU) was down 8% to $46.43 compared with last year same period. Promotional activities along with non-cash net revenue deferral for Data Stash had a bearing on the ARPU. Branded postpaid ABPU increased 2.4% to $60.94 owing to the rise in EIP billings. In addition to strong financials, the telecom players delivered strong customer addition.
Impressive customer addition
T-Mobile continues to see strong customer addition. The company added 1.8 million net subscribers during the three month period, and ended the quarter with 56.8 million customers. This is the eight quarter in a row that the wireless provider has added more than a million subscribers to its network. Branded postpaid additions came in at 1.125 million, which includes 991,000 phone net subscribers and 134,000 mobile broadband net subscribers.
T-Mobile Investor Factbook, Q1 2015
T-Mobile spectacular customer growth has been threatening Sprint’s (S, Financial) lead over it. While industry stalwarts Verizon (VZ, Financial) and AT&T (T, Financial) saw disappointing subscriber addition, experts were almost certain the Sprint would land up with poor numbers too and pass on the third position to T-Mobile. Though that didn’t happen as Sprint added 1.2 million subscribers, T-Mobile is very close to overtaking the Kansas carrier. Sprint presently has 57.1 million customers compared to T-Mobile’s 56.8 million.
Postpaid churn rate dropped 17 basis points to 1.3% compared with a year ago period. The company has been rigorously working to improve its network, enhance customer service, and make better offers. The company has been upgrading its network to 4G LTE.
T-Mobile Investor Factbook, Q1 2015
By the end of the first quarter, T-Mobile’s 4G network had a coverage of 275 million. It’s upgrading the remaining network and expects to add another 5 million Americans under 4G LTE by the middle of 2015 and reach 300 million by end of this year. This has been helping T-Mobile improve customer satisfaction, increase loyalty and draw more users. It was evident in the company’s quarterly performance, subscriber addition, and the lower churn rate. If T-Mobile continues to add customers at the current pace, the telecom player is just a quarter or to away from becoming the third largest U.S. wireless carrier. Let’s stay tuned.
