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United States

Customer development

thousands

 

 

 

 

 

 

Dec. 31, 2020

Dec. 31, 2019

Change

Change
%

Dec. 31, 2018

Branded customersa, b

102,064

67,895

34,169

50.3

63,656

Postpaid customersc

81,350

47,034

34,316

73.0

42,519

Postpaid phone customers

66,618

40,346

26,272

65.1

37,224

Other postpaid customers

14,732

6,689

8,043

n.a.

5,295

Prepaid customersb, c, d

20,714

20,860

(146)

(0.7)

21,137

Adjustments of the customer base

thousands

 

 

 

 

 

Total adjustments of customer base in 2020

Adjustment of customer definition for Sprint’s prepaid business as of July 1, 2020d

Adjustment of customer definition at Sprint as of Apr. 1, 2020c

Sprint additions April 1, 2020

Branded customersa

28,354

(9,393)

(4,853)

42,600

Postpaid customersc

28,830

0

(5,514)

34,344

Postpaid phone customers

24,055

0

(1,861)

25,916

Other postpaid customers

4,775

0

(3,653)

8,428

Prepaid customersc, d

(476)

(9,393)

661

8,256

a

Starting in the first quarter of 2020, T‑Mobile US discontinued reporting of wholesale customers due to the expansion of machine-to-machine (M2M) and Internet of Things (IoT) products and instead will continue to focus on postpaid and prepaid customer reporting.

b

On July 18, 2019, we entered into an agreement whereby certain T‑Mobile US prepaid products will now be offered and distributed by a current MVNO partner. As a result, we included a base adjustment to reduce prepaid customers by 616 thousand in the third quarter of 2019.

c

Includes customers acquired in connection with the Sprint Merger and certain customer base adjustments.

d

In connection with obtaining regulatory approval for the Sprint Merger, on July 1, 2020, substantially all prepaid customers acquired were subsequently acquired by DISH. Upon closing of the transaction with DISH, we entered into a Mobile Virtual Network Operator (MVNO) agreement to provide network services to customers of their prepaid business for a period of up to seven years. As a result, we included a base adjustment to reduce prepaid customers by 9.4 million in the third quarter of 2020. The prepaid customers included in our total customers as of June 30, 2020 include the customers subsequently acquired by DISH and are expected to be different than the customers included under the MVNO agreement, and classified as wholesale customers, due to differences in customer reporting policies.

Branded customers

At December 31, 2020, the United States operating segment (T‑Mobile US) had 102.1 million customers, compared to 67.9 million customers at December 31, 2019. Net customer additions were 5.8 million in 2020, compared to 4.9 million net customer additions in 2019, due to the factors described below.

Postpaid net customer additions were 5.5 million in 2020 – the most in company history – compared to 4.5 million postpaid net customer additions in 2019. The increase resulted from higher postpaid other net customer additions primarily due to higher gross additions from connected devices primarily due to educational institution additions and lower churn, partially offset by lower switching activity in the industry from reduced store traffic due to retail store closures arising from the coronavirus pandemic. This increase was partially offset by lower postpaid phone net customer additions primarily due to higher churn from customers acquired in the Sprint Merger and lower switching activity in the industry from reduced store traffic due to retail store closures arising from the coronavirus pandemic.

Prepaid net customer additions were 331 thousand in 2020, compared to 339 thousand prepaid net customer additions in 2019. The decrease was primarily due to lower prepaid gross customer additions, partially offset by lower churn due to lower switching activity in the industry from reduced store traffic due to retail store closures arising from the coronavirus pandemic.

Development of operations

millions of €

 

 

 

 

 

 

 

 

2020

2019

Change

Change
%

2018

Total revenue

 

61,208

40,420

20,788

51.4

36,522

Profit (loss) from operations (EBIT)

 

9,187

5,488

3,699

67.4

4,634

EBIT margin

%

15.0

13.6

 

 

12.7

Depreciation, amortization and impairment losses

 

(15,665)

(7,777)

(7,888)

n.a.

(5,294)

EBITDA

 

24,852

13,265

11,587

87.4

9,928

Special factors affecting EBITDA

 

(270)

(544)

274

50.4

(160)

EBITDA (adjusted for special factors)

 

25,122

13,809

11,313

81.9

10,088

EBITDA ALa

 

20,628

10,590

10,038

94.8

9,924

Special factors affecting EBITDA ALa

 

(370)

(544)

174

32.0

(160)

EBITDA AL (adjusted for special factors)a

 

20,997

11,134

9,863

88.6

10,084

EBITDA AL margin (adjusted for special factors)a

%

34.3

27.5

 

 

27.6

Cash capex

 

(10,394)

(6,369)

(4,025)

(63.2)

(4,661)

a

Comparatives for 2018 were calculated on a pro forma basis for the key performance indicators redefined as of January 1, 2019 following the introduction of the IFRS 16 accounting standard.

Total revenue

Total revenue for the United States operating segment of EUR 61.2 billion in 2020, increased by 51.4 %, compared to EUR 40.4 billion in 2019. In U.S. dollars, T‑Mobile US’ total revenues increased by 55.0 % year-over year primarily due to increased service revenues as well as increased equipment revenues. The components of these changes are described below.

Service revenues primarily due to higher average postpaid customers driven by customers acquired in the Sprint Merger, the success of new customer segments and rate plans as well as continued growth in existing and new markets, growth in other connected devices (tablets and wearable products), and growth in educational institution customers. The increase in service revenues was also driven by higher postpaid phone ARPU as a result of customers acquired in the Merger and higher roaming and other service revenues primarily from the inclusion of wireline operations acquired in the Sprint Merger.

Equipment revenues increased in 2020 primarily due to an increase in device sales revenue, excluding purchased leased devices. In addition, equipment revenues increased due to the Sprint Merger including increases in lease revenues due to a higher number of customer devices under lease, an increase in revenues primarily related to the liquidation of returned devices, and an increase in sales of leased devices, primarily due to an increase in purchased leased devices.

Other revenues were essentially flat in 2020.

Adjusted EBITDA AL, EBITDA AL

In euros, adjusted EBITDA AL increased by 88.6 % to EUR 21.0 billion in 2020, compared to EUR 11.1 billion in 2019. The adjusted EBITDA AL margin increased to 34.3 % in 2020, compared to 27.5 % in 2019. In U.S. dollars, adjusted EBITDA AL increased by 92.8 % during the same period. Adjusted EBITDA AL increased primarily due to higher service revenues and equipment revenues as discussed above. These increases were partially offset by increases in expenses primarily due to the Sprint Merger including those associated with backhaul agreements, other tower expenses, employee-related and benefit-related costs primarily due to increased headcount, external labor and professional services, lease costs, and advertising. Additional increases in expenses primarily due to the Sprint Merger include those associated with leased device cost of equipment sales, primarily due to an increase in purchased leased devices, costs related to the liquidation of returned devices, repair and maintenance costs, regulatory and roaming costs, and legal related expenses for risk provisioning and commitments. In addition to these costs primarily due to the Sprint Merger, were increases in expenses primarily due to the continued build-out of our nationwide 5G network, costs associated with our restructuring activities, device cost of equipment sales, excluding purchased leased devices, bad debt primarily due to the estimated macro-economic impacts of the coronavirus pandemic, commission expense primarily due to higher gross customer additions, and inventory repair expense as a result of an increase in the high-end device mix to fulfill insurance claims. The impact from commission costs capitalization and amortization, including a net benefit from costs capitalized as result of the Sprint Merger, reduced adjusted EBITDA AL by USD 45 million in 2020 compared to 2019.

EBITDA AL in 2020, included special factors of EUR -0.4 billion compared to special factors of EUR -0.5 billion in 2019. The change in special factors was primarily due to an increase of EUR 1.2 billion in Merger-related costs including transaction costs, including legal and professional services related to the completion of the Merger; EUR 1.0 billion of restructuring costs, including severance, store rationalization and network decommissioning; and integration costs to achieve synergies in network, retail, IT, and back office operations. Also, EUR 0.4 billion in third-party commissions and cleaning-related expenses associated with the coronavirus pandemic and EUR 0.2 billion postpaid billing system disposal. These increases in special factor expenses were offset by the EUR 1.6 billion spectrum impairment reversal and the EUR 0.3 billion transaction fee received from SoftBank. Overall, EBITDA AL increased by 94.8 % to EUR 20.6 billion in 2020, compared to EUR 10.6 billion in 2019, due to the factors described above, including special factors.

EBIT

EBIT increased by 67.4 % to EUR 9.2 billion in 2020, compared to EUR 5.5 billion in 2019. In U.S. dollars, EBIT increased by 72.6 % during the same period primarily due to higher EBITDA AL. In U.S. dollars, depreciation and amortization increased by 106.5 % primarily due to higher depreciation expense from assets acquired in the Sprint Merger, excluding leased devices, and network expansion from the continued build-out of our nationwide 5G network. In addition depreciation and amortization increased due to higher depreciation expense on leased devices resulting from a higher total number of customer devices under lease, primarily from customers acquired in the Sprint Merger, and higher amortization from intangible assets acquired in the Sprint Merger.

Cash capex

Cash capex increased by 63.2 % to EUR 10.4 billion in 2020, compared to EUR 6.4 billion in 2019. In U.S. dollars, cash capex increased by 67.3 % primarily driven by network integration related to the Sprint Merger, the continued build-out of our nationwide 5G network and an increase in spectrum purchases.

5G
New communications standard (launched from 2020), which offers data rates in the gigabit range, converges fixed-network and mobile communications, and supports the Internet of Things.
Glossary
Postpaid
Customers who pay for communication services after receiving them (usually on a monthly basis).
Glossary
Prepaid
In contrast to postpaid contracts, prepaid communication services are services for which credit has been purchased in advance with no fixed-term contractual obligations.
Glossary
Retail
The sale of goods and services to end users, as opposed to resale or wholesale.
Glossary
Roaming
Refers to the use of a communication device or just a subscriber identity in a visited network rather than one’s home network. This requires the operators of both networks to have reached a roaming agreement and switched the necessary signaling and data connections between their networks. Roaming comes into play, for example, when cell phones and smartphones are used across national boundaries.
Glossary
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.
Glossary