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United States

Customer development

thousands

 

 

 

 

 

 

Mar. 31, 2022

Dec. 31, 2021

Change
Mar. 31, 2022/
Dec. 31, 2021
%

Mar. 31, 2021

Change
Mar. 31, 2022/
Mar. 31, 2021 
%

Customers

109,541

108,719

0.8

103,437

5.9

Postpaid customers

88,423

87,663

0.9

82,572

7.1

Postpaid phone customersa, b

70,656

70,262

0.6

67,402

4.8

Other postpaid customersa, b

17,767

17,401

2.1

15,170

17.1

Prepaid customers

21,118

21,056

0.3

20,865

1.2

a

Customers impacted by the commenced decommissioning of the legacy Sprint CDMA network, who did not migrate to the T-Mobile US’ network, have been excluded from our postpaid customer base resulting in the removal of 212,000 postpaid phone customers and 349,000 postpaid other customers in the first quarter of 2022. In connection with our acquisition of companies, we included a base adjustment in the first quarter of 2022 to increase postpaid phone customers by 17,000 and reduce postpaid other customers by 14,000.

b

In the first quarter of 2021, we acquired 11,000 postpaid phone customers and 1,000 postpaid other customers through our acquisition of an affiliate.

Customers

At March 31, 2022, the United States operating segment (T‑Mobile US) had 109.5 million customers, compared to 108.7 million customers at December 31, 2021. Net customer additions were 1.4 million in the first quarter of 2022, slightly up compared to net customer additions in the first quarter of 2021, due to the factors described below.

Postpaid net customer additions were 1.3 million in the first quarter of 2022, compared to 1.2 million in the first quarter of 2021. This increase resulted from higher postpaid other net customer additions, primarily due to an increase in High Speed Internet customers, connected devices and wearables. This increase was partially offset by lower postpaid phone net customer additions driven by a focus on deepening Sprint customer relationships in the prior year in order to decrease churn, as Sprint customers historically had fewer lines per account, partially offset by higher industry switching activity and lower churn. High Speed Internet net customer additions included in postpaid other net customer additions were 329 thousand and 93 thousand in the first quarter of 2022 and 2021, respectively.

Prepaid net customer additions were 62 thousand in the first quarter of 2022, compared to 151 thousand prepaid net customer additions in the first quarter of 2021. This decrease was associated with the continued industry shift to postpaid plans, partially offset by lower churn. High Speed Internet net customer additions included in prepaid net customer additions were 9 thousand in the first quarter of 2022. There were no prepaid High Speed Internet customer additions in the first quarter of 2021.

Development of operations

millions of €

 

 

 

 

 

 

 

 

Q1 2022

Q1 2021

Change

Change %

FY 2021

Total revenue

 

18,048

16,483

1,565

9.5

68,359

Service revenue

 

13,624

11,674

1,950

16.7

48,929

Profit (loss) from operations (EBIT)

 

2,044

2,144

(100)

(4.7)

7,217

EBIT margin

%

11.3

13.0

 

 

10.6

Depreciation, amortization and impairment losses

 

(4,604)

(4,577)

(27)

(0.6)

(18,338)

EBITDA

 

6,647

6,722

(75)

(1.1)

25,555

Special factors affecting EBITDA

 

(820)

(151)

(669)

n.a.

(1,836)

EBITDA (adjusted for special factors)

 

7,467

6,873

594

8.6

27,392

EBITDA AL

 

4,914

5,446

(532)

(9.8)

20,060

Special factors affecting EBITDA AL

 

(1,258)

(261)

(997)

n.a.

(2,637)

EBITDA AL (adjusted for special factors)

 

6,172

5,706

466

8.2

22,697

Core EBITDA AL (adjusted for special factors)a

 

5,741

4,829

912

18.9

19,912

EBITDA AL margin (adjusted for special factors)

%

34.2

34.6

 

 

33.2

Cash capex

 

(5,535)

(10,513)

4,978

47.4

(18,594)

a

Adjusted core EBITDA AL is distinguished by excluding revenue from terminal equipment leases from adjusted EBITDA AL, thereby presenting operational development undistorted by the withdrawal from the terminal equipment lease business.

Total revenue, service revenue

Total revenue for the United States operating segment of EUR 18.0 billion in the first quarter of 2022 increased by 9.5 %, compared to EUR 16.5 billion in the first quarter of 2021. In U.S. dollars, T‑Mobile US’ total revenues increased by 1.9 % year-over year primarily due to increased service revenues. This increase was partially offset by lower equipment revenues. The components of these changes are described below.

Service revenues increased in the first quarter of 2022 by 16.7 % to EUR 13.6 billion. In organic terms service revenues increased by 6.7 % year-on-year. The increase resulted from higher postpaid revenues primarily from higher average postpaid accounts and higher postpaid ARPA (Average Revenue per Account). In addition, service revenues increased due to higher prepaid revenues primarily from higher prepaid ARPU (Average Revenue per User) and higher average prepaid customers.

Equipment revenues decreased in the first quarter of 2022 primarily due to a decrease in lease revenues and in customer purchases of leased devices primarily due to a lower number of customer devices under lease as a result of the continued strategic shift from device financing from leasing to EIP. In addition, equipment revenues decreased due to lower average revenue per device sold primarily due to higher promotions, which included promotions for Sprint customers to facilitate the migration to the T‑Mobile US’ network, partially offset by an increase in the high-end phone mix. This decrease was partially offset by an increase in the number of devices sold, including higher upgrade volume.

Adjusted EBITDA AL, EBITDA AL

In euros, adjusted EBITDA AL increased by 8.2 % to EUR 6.2 billion in the first quarter of 2022, compared to EUR 5.7 billion in the first quarter of 2021. The adjusted EBITDA AL margin decreased to 34.2 % in the first quarter of 2022, compared to 34.6 % in the first quarter of 2021. In U.S. dollars, adjusted EBITDA AL increased by 0.7 % during the same period. Adjusted EBITDA AL increased primarily due to higher service revenue as discussed above and lower cost of services, excluding Merger-related costs. This increase was partially offset by higher bad debt expense primarily due to estimated credit losses normalizing from muted pandemic levels, as well as higher Equipment Installment Plan receivables driven by higher equipment sales and a mix shift in device financing, partially offset by higher realized Merger synergies. In U.S. dollars, lease revenues decreased as a result of the continued strategic shift from device financing from leasing to EIP by 54.3 % in the first quarter of 2022.

Adjusted core EBITDA AL increased by 18.9 % to EUR 5.7 billion in the first quarter of 2022, compared to EUR 4.8 billion in the first quarter of 2021. In U.S. dollars, adjusted core EBITDA AL increased by 10.7 % during the same period. The change was primarily due to the fluctuation in adjusted EBITDA AL, discussed above, excluding the change in lease revenues.

EBITDA AL in the first quarter of 2022, included special factors of EUR -1.3 billion compared to EUR -0.3 billion in the first quarter of 2021. The change in special factors was primarily due to higher Merger-related costs during the first quarter of 2022. Special factors include Merger-related costs predominantly associated with the integration of Sprint and are comprised of integration costs to achieve efficiencies in network, retail, information technology and back office operations, migrate customers to the T‑Mobile US’ network and mitigate the impact of legal matters assumed as part of the Sprint Merger; restructuring costs, including severance, store rationalization and network decommissioning; and transaction costs, including legal and professional services related to the completion of transactions. Overall, EBITDA AL decreased by 9.8 % to EUR 4.9 billion in the first quarter of 2022, compared to EUR 5.4 billion in the first quarter of 2021, primarily due to the factors described above, including special factors.

EBIT

EBIT decreased by 4.7 % to EUR 2.0 billion in the first quarter of 2022, compared to EUR 2.1 billion in the first quarter of 2021. In U.S. dollars, EBIT decreased by 11.1 % during the same period primarily due to lower EBITDA AL, partially offset by lower depreciation and amortization. In U.S. dollars, depreciation and amortization decreased by 6.4 % primarily due to lower depreciation expense on leased devices resulting from a lower number of total customer devices under lease and certain 4G-related network assets becoming fully depreciated. This decrease was partially offset by higher depreciation expense (excluding leased devices) from the continued build-out of our nationwide 5G network.

Cash capex

Cash capex decreased to EUR 5.5 billion in the first quarter of 2022, compared to EUR 10.5 billion in the first quarter of 2021. In U.S. dollars, cash capex decreased by 50.3 % predominantly from a decrease in spectrum purchases, primarily due to USD 8.9 billion paid for spectrum licenses won at the conclusion of the C-band auction in March 2021, compared to USD 2.8 billion paid for spectrum licenses won at the conclusion of Auction 110 in February 2022. This decrease was partially offset by an increase in purchases of property and equipment from network integration related to the Merger and the accelerated build-out of our nationwide 5G network.

4G
Refers to the fourth-generation mobile communications standard that supports higher transmission rates (see LTE).
Glossary
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
AL – After Leases
Since the start of the 2019 financial year, we have taken the effects of the first-time application of IFRS 16 “Leases” into account when determining our financial performance indicators. “EBITDA after leases” (EBITDA AL) is calculated by adjusting EBITDA for depreciation of the right-of-use assets and for interest expenses on recognized lease liabilities. When determining “free cash flow after leases” (free cash flow AL), free cash flow is adjusted for the repayment of lease liabilities.
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