T-Mobile US reported accelerated customer growth, all-time record-low postpaid phone churn of 0.88%, and record first quarter financials.
Q1 marked the 24th quarter in a row where T-Mobile delivered greater than 1 million total customer net additions.
Some highlights:
- Total net customer additions were 1.7 million in Q1 2019, bringing our total customer count to 81.3 million, and marking the 24th straight quarter in which T-Mobile generated more than 1 million total net customer additions.
- Branded postpaid net customer additions were 1.0 million in Q1 2019.
- Branded postpaid phone net customer additions were 656,000 in Q1 2019, up 39,000 from Q1 2018, and Q1 2019 is expected to be the 21st consecutive quarter in which T-Mobile leads the industry in this category. Branded postpaid phone net customer additions increased year-over-year primarily due to record-low churn.
- Branded postpaid other net customer additions were 363,000 in Q1 2019 primarily due to continued strength in gross customer additions driven by wearables.
- Branded prepaid net customer additions were 69,000 in Q1 2019, down year-over-year primarily due to continued promotional activities in the marketplace, partially offset by lower churn.
- Branded prepaid churn was 3.85% in Q1 2019, down 9 basis points year-over-year.
- Total service revenues increased 6% to a record-high of $8.3 billion in Q1 2019. These results represent our best quarterly performance ever and we expect to lead the industry for the 20th consecutive quarter in year-over-year service revenue percentage growth. Branded postpaid revenues increased 8% year-over-year.
- Total revenues increased 6% to $11.1 billion in Q1 2019 driven by growth in both Service revenues and Equipment revenues.
- Branded postpaid phone Average Revenue per User (ARPU) decreased to $46.07 in Q1 2019, down 1.3%. The decrease was primarily due to a reduction in regulatory program revenues from the continued adoption of tax inclusive plans, a reduction in certain non-recurring charges, the growing success of new customer segments and rate plans, including T-Mobile for Business, and the impact of the ongoing growth in our Netflix offering, partially offset by higher premium services revenue and a net reduction in promotional activities. For 2019 as a whole, we still expect ARPU to be generally stable within a range from plus 1% to minus 1%.
- Branded prepaid ARPU decreased to $37.65 in Q1 2019, down 3.2%, primarily due to dilution from promotional rate plans and growth in our Amazon Prime offering, partially offset by certain non-recurring charges.
- Net income increased 35% to $908 million and EPS increased 36% to $1.06 in Q1 2019 primarily due to higher Operating income and lower Interest expense. The negative impact from merger-related costs on Net income and EPS was $93 million and $0.11, respectively.
“Our results speak for themselves and our business continues to fire on all cylinders! Record Service revenues, record Q1 Net income and record Adjusted EBITDA – all while we continue to share the story and lay out the facts that our game changing merger with Sprint will be a win for consumers,” said John Legere, CEO of T-Mobile. “We’re off to a fast start in 2019 with customer growth that accelerated year-over-year, record low churn and we expect to lead the industry in postpaid phone growth. We’re executing on our business plan and our guidance shows that we expect our momentum to continue.”