United States

Customer development

Customers

At June 30, 2024, the United States operating segment (T‑Mobile US) had 125.9 million customers, compared to 119.7 million customers at December 31, 2023. Net customer additions were 2.7 million in the first half of 2024, compared to 3.0 million in the first half of 2023 due to the factors described below.

Postpaid net customer additions were 2.6 million in the first half of 2024, compared to 2.9 million in the first half of 2023. Postpaid net customer additions decreased primarily from lower postpaid other net customer additions, primarily due to lower net additions from High Speed Internet and wearables. The lower net additions from High Speed Internet were primarily driven by increased deactivations from a growing customer base, partially offset by a lower churn rate. This decrease was partially offset by higher net additions from other connected devices. The decrease in postpaid other net customer additions was partially offset by slightly higher postpaid phone net customer additions, primarily due to higher gross additions, mostly offset by increased deactivations from a growing customer base. High Speed Internet net customer additions included in postpaid other net customer additions were 704 thousand and 892 thousand in the first half of 2024 and 2023, respectively.

Prepaid net customer additions were 131 thousand in the first half of 2024, compared to 150 thousand in the first half of 2023. The decrease was primarily driven by continued moderation of prepaid industry growth and lower net additions from High Speed Internet, partially offset by higher gross additions following the Ka’ena Acquisition and lower churn. High Speed Internet net customer additions included in prepaid net customer additions were 107 thousand and 140 thousand in the first half of 2024 and 2023, respectively.

Development of operations

Revenue, service revenue

Total revenue for the United States operating segment of EUR 36.3 billion in the first half of 2024 increased by 1.3 %, compared to EUR 35.8 billion in the first half of 2023. In U.S. dollars, T‑Mobile US’ total revenue also increased by 1.3 % during the same period. Total revenue increased slightly primarily due to higher service revenues, mostly offset by lower equipment revenues. The components of these changes are described below.

Service revenues increased in the first half of 2024 by 4.0 % to EUR 30.1 billion. In U.S. dollars, T‑Mobile US’ service revenues also increased by 4.0 % during the same period. This increase resulted from higher postpaid revenues, primarily due to higher average postpaid accounts and higher postpaid Average Revenue per Account (ARPA). In addition, service revenues increased from higher prepaid revenues, primarily due to higher average prepaid customers, primarily from the prepaid customers acquired through the Ka’ena Acquisition, partially offset by lower prepaid Average Revenue per User (ARPU). This increase was partially offset by lower wholesale and other service revenues, primarily from lower Wireline revenues due to the sale of the Wireline Business on May 1, 2023, lower MVNO revenues, and lower Affordable Connectivity Program and Lifeline revenues. The decrease in MVNO revenues was primarily due to DISH servicing more of its Boost customers with their standalone network and the migration by Verizon of legacy TracFone customers off of the T‑Mobile US network, partially offset by growth in other MVNO partners.

Equipment revenues decreased in the first half of 2024 primarily from a net decrease in the total number of devices sold, driven by lower government assistance programs, prepaid and postpaid upgrade units, partially offset by higher postpaid gross addition related devices. This decrease was partially offset by slightly higher average revenue per device sold, net of promotions, primarily driven by an increase in the high-end phone mix. In addition, equipment revenues decreased due to a decrease in lease revenues, primarily due to a lower number of customer devices under lease as a result of the continued strategic shift in device financing from leasing to equipment installment plans (EIP). The decrease in equipment revenues was partially offset by an increase in liquidation revenue, primarily due to a higher number of in-house liquidated devices, including the impact from the transition of certain device recovery programs from external sources to in-house processing.

Other revenues decreased in the first half of 2024 primarily from the transition of certain device recovery programs from external sources to in-house processing, resulting in a change in presentation to equipment revenues.

Adjusted EBITDA AL, EBITDA AL

In euros, adjusted EBITDA AL increased by 8.2 % to EUR 14.2 billion in the first half of 2024, compared to EUR 13.1 billion in the first half of 2023. The adjusted EBITDA AL margin increased to 39.0 % in the first half of 2024, compared to 36.5 % in the first half of 2023. In U.S. dollars, adjusted EBITDA AL also increased 8.2 % during the same period. Adjusted EBITDA AL increased primarily due to higher service revenues as discussed above, lower costs due to the sale of the Wireline Business on May 1, 2023, lower employee costs, primarily due to reduced headcount, and higher Sprint Merger-related synergies. In addition, adjusted EBITDA AL increased due to lower equipment costs as a result of a net decrease in the number of devices sold, driven by lower government assistance programs, prepaid, and postpaid upgrade units, partially offset by higher postpaid gross addition related devices. The increase in adjusted EBITDA AL was partially offset by lower equipment revenues and lower other revenues as described above, higher average cost per device sold, primarily driven by a shift in the high-end phone mix, an increase in liquidation costs, higher legal expenses, and higher costs as a result of the Ka’ena Acquisition. The increase in liquidation costs was primarily due to a higher number of in-house liquidated devices, including the impact from the transition of certain device recovery programs from external sources to in-house processing. In U.S. dollars, lease revenues decreased as a result of the continued strategic shift in device financing from leasing to EIP by 71.0 % in the first half of 2024.

In euros, adjusted core EBITDA AL increased by 9.4 % to EUR 14.1 billion in the first half of 2024, compared to EUR 12.9 billion in the first half of 2023. In U.S. dollars, adjusted core EBITDA AL also increased by 9.4 % during the same period. The increase was primarily due to the fluctuation in adjusted EBITDA AL as discussed above, excluding the change in lease revenues.

EBITDA AL in the first half of 2024 included special factors of EUR ‑0.2 billion compared to EUR ‑0.7 billion in the first half of 2023. The change in special factors was primarily due to lower Sprint Merger-related costs. The change in special factors was also impacted by other special items including certain severance, restructuring, and other expenses, gains and losses, not directly attributable to the Sprint Merger which are not reflective of T‑Mobile US’ core business activities recognized in the first half of 2023. Overall, EBITDA AL increased by 13.3 % to EUR 14.0 billion in the first half of 2024, compared to EUR 12.4 billion in the first half of 2023, primarily due to the factors described above, including special factors.

Profit/loss from operations (EBIT)

EBIT increased by 18.2 % to EUR 8.6 billion in the first half of 2024, compared to EUR 7.3 billion in the first half of 2023. In U.S. dollars, EBIT increased by 18.1 % during the same period primarily due to higher EBITDA AL, partially offset by higher depreciation, amortization and impairment losses. In U.S. dollars, depreciation, amortization and impairment losses increased by 1.8 % primarily due to higher depreciation expense from the acceleration of certain technology assets as T‑Mobile US continues to modernize its network, technology systems, and platforms.

Cash capex (before spectrum investment), cash capex

Cash capex (before spectrum investment) decreased by 19.3 % to EUR 4.3 billion in the first half of 2024, compared to EUR 5.4 billion in the first half of 2023. In U.S. dollars, cash capex (before spectrum investment) decreased by 19.2 % due to a decrease in purchases of property and equipment, primarily due to increased capital efficiencies from accelerated investments in the T‑Mobile US nationwide 5G network in previous years.

Cash capex decreased by 17.1 % to EUR 4.5 billion in the first half of 2024, compared to EUR 5.5 billion in the first half of 2023. In U.S. dollars, cash capex also decreased by 17.1 % primarily due to lower purchases of property and equipment as discussed above.