United States

For information on changes resulting from the first-time application of the IFRS 16 “Leases” accounting standard and changes in the organizational structure, please refer to the section “Group organization, strategy, and management.”

Customer development

Total

At March 31, 2019, the United States operating segment (T-Mobile US) had 81.3 million customers, compared to 79.7 million customers at December 31, 2018. Net customer additions were 1.7 million for the first quarter of 2019, compared to 1.4 million net customer additions for the first quarter of 2018, due to the factors described below.

Branded customers. Branded postpaid net customer additions were 1.02 million for the first quarter of 2019, compared to 1.01 million branded postpaid net customer additions for the first quarter of 2018.The increase in branded postpaid net customer additions was due primarily to higher branded postpaid phone net customer additions primarily due to record-low churn, partially offset by lower branded postpaid other net customer additions primarily due to higher deactivations from a growing customer base.

Branded prepay net customer additions were 69 thousand for the first quarter of 2019, compared to 199 thousand branded prepay net customer additions for the first quarter of 2018. The decrease was due to continued competitive activity in the marketplace, partially offset by lower churn.

Wholesale customers. Wholesale net customer additions were 562 thousand for the first quarter of 2019, compared to 229 thousand for the first quarter of 2018. The increase was due primarily to higher gross additions from the continued success of our M2M and MVNO partnerships.

Development of operations

Total revenue

Total revenue for the United States operating segment of EUR 9.8 billion in the first quarter of 2019 increased by 15.9 percent, compared to EUR 8.5 billion in the first quarter of 2018. In U.S. dollars, T-Mobile US’ total revenues increased by 7.0 percent year-on-year due primarily to an increase in service revenue driven by growth in the 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 T-Mobile ONE Unlimited 55+, T-Mobile ONE Military, T-Mobile for Business, and T-Mobile Essentials, along with record-low churn and growth in wearables and other connected devices.

EBITDA AL, adjusted EBITDA AL

In euros, adjusted EBITDA AL increased by 14.9 percent to EUR 2.7 billion in the first quarter of 2019, compared to EUR 2.3 billion in the first quarter of 2018. Adjusted EBITDA AL margin slightly decreased to 27.3 percent in first quarter of 2019, compared to 27.6 percent in the first quarter of 2018. In U.S. dollars, adjusted EBITDA AL increased by 6.2 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 managed services, commissions and costs primarily related to an increase in amortization expense related to costs that were capitalized upon the adoption of IFRS 15 on January 1, 2018.

EBITDA AL for the first quarter of 2019 included special factors of EUR -99 million compared to special factors of EUR 28 million for the first quarter of 2018. The decrease in special factors was primarily due to a purchase and investment gain in the first quarter of 2018 and costs related to the proposed Sprint transaction in the first quarter of 2019. Overall, EBITDA AL increased by 9.4 percent to EUR 2.6 billion in the first quarter of 2019, compared to EUR 2.4 billion in the first quarter of 2018, due to the factors described above, including special factors.

EBIT

EBIT increased to EUR 1.4 billion in the first quarter of 2019 compared to EUR 1.1 billion in the first quarter of 2018 driven by higher EBITDA AL. The continued deployment of low-band spectrum, including 600 MHz, and laying the groundwork for 5G results in higher depreciation charges. The mandatory first-time application of the IFRS 16 “Leases“ accounting standard as of January 1, 2019 results in higher depreciation charges for right-of-use assets previously recognized as operating expenses for operating leases.

Cash capex

Cash capex increased to EUR 1.7 billion in the first quarter of 2019, compared to EUR 1.1 billion in the first quarter of 2018, primarily due to the accelerated rollout of our 600 MHz low-band spectrum including laying the groundwork for 5G.