United States

For further information on changes resulting from the first-time application of the IFRS 16 “Leases” accounting standard, please refer to the section “Management of the Group.”

Customer development

thousands

 

 

 

 

 

 

Dec. 31, 2019

Dec. 31, 2018

Change

Change %

Dec. 31, 2017

a

On July 18, 2019, we entered into an agreement whereby certain T‑Mobile US branded prepaid products are now being offered and distributed by a current MVNO partner. As a result, we included a base adjustment to reduce branded prepaid customers by 616 thousand in the third quarter of 2019. Prospectively, from the agreement date new customer activity associated with these products is recorded within wholesale customers.

Mobile customers

86,046

79,651

6,395

8.0

72,585

Branded customersa

67,895

63,656

4,239

6.7

58,715

Branded postpaid

47,034

42,519

4,515

10.6

38,047

Branded prepaya

20,860

21,137

(277)

(1.3)

20,668

Wholesale customers

18,152

15,995

2,157

13.5

13,870

Total

At December 31, 2019, the United States operating segment (T‑Mobile US) had 86.0 million customers, compared to 79.7 million customers at December 31, 2018. Compared to the year ended December 31, 2018, net customer additions remained stable at 7.0 million for the year ended December 31, 2019, due to the factors described below.

Branded customers. Branded postpaid net customer additions remained stable at 4.5 million for the year ended December 31, 2019. The increase resulted from higher branded postpaid phone net customer additions primarily due to lower churn, and higher branded other net customer additions primarily due to the higher number of connected devices; partially offset by higher deactivations from a growing customer base.

Branded net customer additions were 339 thousand for the year ended December 31, 2019, compared to 460 thousand branded prepay net customer additions for the year ended December 31, 2018. The decrease in net customer additions was primarily due to continued competitor promotional activities in the marketplace, partially offset by lower churn.

Wholesale customers. Wholesale net customer additions were 2.2 million for the year ended December 31, 2019, compared to 2.1 million for the year ended December 31, 2018. The increase was due primarily to higher additions from the continued success of our and MVNO partnerships.

Development of operations

millions of €

 

 

 

 

 

 

 

 

2019

2018

Change

Change %

2017

a

Comparatives for 2018 were calculated on a pro forma basis for the redefined key performance indicators resulting from the introduction of the IFRS 16 accounting standard.

TOTAL REVENUE

 

40,420

36,522

3,898

10.7

35,736

Profit from operations (EBIT)

 

5,488

4,634

854

18.4

5,930

EBIT margin

%

13.6

12.7

 

 

16.6

Depreciation, amortization and impairment losses

 

(7,777)

(5,294)

(2,483)

(46.9)

(5,019)

EBITDA

 

13,265

9,928

3,337

33.6

10,949

EBITDA ALa

 

10,590

9,924

666

6.7

n.a.

Special factors affecting EBITDA

 

(544)

(160)

(384)

n.a.

1,633

EBITDA (adjusted for special factors)

 

13,809

10,088

3,721

36.9

9,316

EBITDA AL (ADJUSTED FOR SPECIAL FACTORS)a

 

11,134

10,084

1,050

10.4

n.a.

EBITDA AL margin (adjusted for special factors)a

%

27.5

27.6

 

 

n.a.

CASH CAPEX

 

(6,369)

(4,661)

(1,708)

(36.6)

(11,932)

Total revenue

Total revenue for the United States operating segment of EUR 40.4 billion in 2019 increased by 10.7 percent, compared to EUR 36.5 billion in 2018. In U.S. dollars, T‑Mobile US’ total revenues increased by 5.0 percent year-over-year due primarily to an increase in driven by growth in our average branded customer base from the continued growth in existing and greenfield markets, including the growing success of new customer segments and rate plans such as Un-limited 55+, Military, Business, and Essentials, and growth in other connected devices and wearables, specifically the Apple watch; partially offset by lower branded postpaid phone Average Revenue per User (ARPU).

EBITDA AL, adjusted EBITDA AL

In euros, adjusted EBITDA AL increased by 10.4 percent to EUR 11.1 billion in 2019, compared to EUR 10.1 billion in 2018. Adjusted EBITDA AL margin of 27.5 percent in 2019 remained relatively flat compared to 2018. In U.S. dollars, adjusted EBITDA AL increased by 4.7 percent during the same period. Adjusted EBITDA AL increased due primarily to higher service revenues, as further discussed above. These increases were partially offset by higher employee-related costs, costs related to outsourced functions, commission costs including a USD 0.3 billion increase related to amortization expense from costs that were capitalized upon the adoption of IFRS 15 on January 1, 2018, and the impact from hurricane-related reimbursements of USD 0.2 billion received in 2018. There was no significant impact from hurricanes in 2019.

EBITDA AL for 2019 included special factors of EUR -0.5 billion compared to special factors of EUR -0.2 billion in 2018. The change in special factors was primarily due to an increase in expenses associated with the proposed Sprint transaction. Overall, EBITDA AL increased by 6.7 percent to EUR 10.6 billion in 2019, compared to EUR 9.9 billion in 2018, due to the factors described above, including special factors.

EBIT

EBIT increased to EUR 5.5 billion in 2019, compared to EUR 4.6 billion in 2018, driven by higher EBITDA AL as discussed above. Depreciation and amortization expense increased due to the application of IFRS 16 as of January 1, 2019, which results in higher depreciation charges for capitalized right-of-use-assets previously recognized as operating expenses for operating leases. Excluding the impacts of IFRS 16, depreciation increased due to network expansion, including the continued deployment of low band spectrum, including 600 MHz, and the nationwide launch of our network; partially offset by lower depreciation expense resulting from a lower total number of customer devices under lease.

Cash capex

Cash capex increased to EUR 6.4 billion in 2019, compared to EUR 4.7 billion in 2018, primarily due to growth in network build-out as we continued deployment of low band spectrum, including 600 MHz, and the nationwide launch of our 5G network, and an increase in spectrum licenses acquired.

Postpaid
Customers who pay for communication services after receiving them (usually on a monthly basis).
Prepay/prepaid
In contrast to postpay contracts, prepay communication services are services for which credit has been purchased in advance with no fixed-term contractual obligations.
M2M - Machine to Machine
Communication between machines. The information is automatically sent to the recipient. For example, in an emergency, alarm systems automatically send a signal to security or the police.
Service revenues
Revenues generated with mobile customers from services (i.e., revenues from voice services – incoming and outgoing calls – and data services), plus roaming revenues, monthly charges, and visitor revenues.
5G
New communications standard, which offers data rates in the gigabit range, converges fixed-network and mobile communications, and supports the Internet of Things – rollout starting 2020.