United States

Customer development

Customers

At June 30, 2021, the United States operating segment (T‑Mobile US) had 104.8 million customers, compared to 102.1 million customers at December 31, 2020. Net customer additions were 2.7 million in the first half of 2021, compared to 2.1 million net customer additions in the first half of 2020, due to the factors described below.

Postpaid net customer additions were 2.5 million in the first half of 2021, compared to 1.9 million postpaid net customer additions in the first half of 2020. The increase resulted from higher postpaid phone net customer additions, primarily due to increased retail store traffic due to closures arising from the coronavirus pandemic in the prior period, partially offset by higher churn. In addition, this increase was partially offset by lower postpaid other net customer additions, primarily due to higher disconnect volumes from an increased customer base.

Prepaid net customer additions were 227 thousand in the first quarter of 2021, compared to 190 thousand prepaid net customer losses in the first quarter of 2020. The increase was primarily due to lower churn.

Development of operations

Total revenue

Total revenue for the United States operating segment of EUR 33.1 billion in the first half of 2021, increased by 20.7 %, compared to EUR 27.5 billion in the first half of 2020. In U.S. dollars, T‑Mobile US’ total revenues increased by 32.0 % year-on-year primarily due to increased service revenues as well as increased equipment revenues. The components of these changes are described below.

Service revenues increased in the first half of 2021 primarily due to higher average postpaid accounts, higher postpaid ARPA (Average Revenue per Account), higher wholesale revenues primarily from our Master Network Service Agreement with DISH and the success of our other MVNO relationships, and higher other service revenues primarily from the inclusion of wireline operations acquired in the Sprint Merger.

Equipment revenues increased in the first half of 2021 primarily due to an increase in device sales revenue, excluding purchased leased devices and liquidation of returned 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 sales of accessories and device sales revenues, due to increased retail store traffic due to closures arising from the coronavirus pandemic in the prior period and a larger customer base. Additional increases in revenue primarily due to the Sprint Merger include those associated with an increase in sales of leased devices, primarily due to a larger base of leased devices.

Adjusted EBITDA AL, EBITDA AL

In euros, adjusted EBITDA AL increased by 20.9 % to EUR 11.4 billion in the first half of 2021, compared to EUR 9.5 billion in the first half of 2020. The adjusted EBITDA AL margin was 34.5 % in the first half of 2021 on par with 34.5 % in the first half of 2020. In U.S. dollars, adjusted EBITDA AL increased by 32.3 % 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 device cost of equipment sales, excluding purchased leased devices, leases, backhaul agreements, external labor and professional services, and advertising. Additional increases in expenses primarily due to the Sprint Merger include those associated with employee-related and benefit-related costs primarily due to increased headcount, costs related to the liquidation of a higher volume of returned devices, and leased device cost of equipment sales, primarily due to a larger base of leased devices. In addition to these costs primarily due to the Sprint Merger, were increases in expenses associated with device cost of equipment sales, excluding purchased leased devices, primarily due to an increase in the number of devices sold driven by increased retail store traffic due to closures arising from the coronavirus pandemic in the prior period and higher average costs per device sold due to an increase in the high-end device mix, the continued build-out of our nationwide 5G network, and cost of accessories, due to increased retail store traffic due to closures arising from the coronavirus pandemic in the prior period.

EBITDA AL in the first half of 2021, included special factors of EUR -0.8 billion compared to EUR -1.2 billion in the first half of 2020. The change in special factors was primarily due to higher special factors recognized in the first half of 2020 including supplemental employee payroll, third-party commissions and cleaning-related expenses associated with the coronavirus pandemic and a postpaid billing system disposal, partially offset by a transaction fee received from SoftBank. Special factors also included Merger-related costs comprised of transaction costs, including legal and professional services related to the completion of the Merger and acquisitions of affiliates; restructuring costs, including severance, store rationalization and network decommissioning; and integration costs to achieve synergies in network, retail, IT, and back office operations. Overall, EBITDA AL increased by 28.9 % to EUR 10.7 billion in the first half of 2021, compared to EUR 8.3 billion in the first half of 2018, due to the factors described above, including special factors.

EBIT

EBIT increased to EUR 4.3 billion in the first half of 2021, compared to EUR 3.5 billion in the first half of 2020. In U.S. dollars, EBIT increased by 35.6 % during the same period primarily due to higher EBITDA AL. In U.S. dollars, depreciation and amortization increased by 48.5 % primarily due to the continued build-out of our nationwide 5G network, higher depreciation expense on leased devices resulting from a larger base of leased devices as a result of the Sprint Merger, higher amortization from intangible assets acquired in the Sprint Merger, partially offset by certain 4G-related network assets becoming fully depreciated.

Cash capex

Cash capex increased to EUR 13.2 billion in the first half of 2021, compared to EUR 4.4 billion in the first half of 2020. In U.S. dollars, cash capex increased by USD 11.0 billion primarily driven by an increase 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, network integration related to the Sprint Merger and the continued build-out of our nationwide 5G network.