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 September 30, 2019, the United States operating segment (T‑Mobile US) had 84.2 million customers, compared to 79.7 million customers at December 31, 2018. Net customer additions were 5.1 million for the nine months ended September 30, 2019, compared to 4.6 million net customer additions for the nine months ended September 30, 2018, due to the factors described below.

Branded customers. Branded postpaid net customer additions were 3.2 million for the nine months ended September 30, 2019, compared to 3.1 million branded postpaid net customer additions for the nine months ended September 30, 2018. The increase resulted from higher branded postpaid phone net customer additions primarily due to lower churn and higher branded postpaid other net customer additions primarily due to higher gross customer additions from connected devices and wearables, specifically the Apple watch; partially offset by higher deactivations from a growing customer base.

Branded prepay net customer additions were 262 thousand for the nine months ended September 30, 2019, compared to 325 thousand branded prepay net customer additions for the nine months ended September 30, 2018. The decrease in net customer additions was primarily due to continued promotional activities in the marketplace, partially offset by lower churn.

Wholesale customers. Wholesale net customer additions were 1.7 million for the nine months ended September 30, 2019, compared to 1.2 million for the nine months ended September 30, 2018. The increase was due primarily to higher gross additions from the continued success of our M2M partnerships.

Development of operations

Total revenue

Total revenue for the United States operating segment of EUR 29.6 billion in the first nine months ended September 30, 2019 increased by 11.8 percent, compared to EUR 26.5 billion in the first nine months ended September 30, 2018. In U.S. dollars, T‑Mobile US’ total revenues increased by 5.2 percent year-on-year due primarily to an increase in service revenue driven by growth in our 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 Unlimited 55+, Military, Business, and Essentials, and growth in wearables and other connected devices, specifically the Apple watch partially offset by lower branded postpaid phone Average Revenue per User (ARPU).

EBITDA AL, adjusted EBITDA AL

In euros, adjusted EBITDA AL increased by 11.6 percent to EUR 8.4 billion in the first nine months ended September 30, 2019, compared to EUR 7.5 billion in the first nine months ended September 30, 2018. The adjusted EBITDA AL margin of 28.4 percent in the first nine months ended September 30, 2019 remained relatively flat compared to the first nine months ended September 30, 2018. In U.S. dollars, adjusted EBITDA AL increased by 5.0 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 outsourced functions, commissions, and costs of USD 237 million primarily related to an increase in amortization expense related to costs that were capitalized upon the adoption of IFRS 15 on January 1, 2018, and the impact from hurricane-related reimbursements of USD 265 million received in the first nine months ended September 30, 2018. There was no significant impact from hurricanes for the first nine months ended September 30, 2019.

EBITDA AL included special factors of EUR -441 million for the first nine months ended September 30, 2019, compared with special factors of EUR -59 million for the first nine months ended September 30, 2018. The change in special factors was primarily due to the expenses associated with the proposed Sprint transaction in the first nine months ended September 30, 2019, and a purchase and investment gain in the first quarter of 2018. Overall, EBITDA AL increased by 6.6 percent to EUR 8.0 billion in the first nine months ended September 30, 2019, compared to EUR 7.5 billion in the first nine months ended September 30, 2018, due to the factors described above, including special factors.

EBIT

EBIT increased to EUR 4.3 billion in the first nine months ended September 30, 2019, compared to EUR 3.6 billion in the first nine months ended September 30, 2018 driven by higher EBITDA AL. Depreciation and amortization expense increased due to the application of the IFRS 16 accounting standard as of January 1, 2019, which results in higher depreciation charges for capitalized right-of-use-assets previously recognized as operating expenses for operating leases. Excluding the impact of IFRS 16, depreciation was essentially flat due to a lower number of devices under lease, partially offset by higher depreciation charges related to, and laying the groundwork for 5G.

Cash capex

Cash capex increased to EUR 5.3 billion in the first nine months ended September 30, 2019, compared to EUR 3.7 billion in the first nine months ended September 30, 2018, primarily due to the accelerated rollout of our 600 MHz low-band spectrum including laying the groundwork for 5G and an increase in spectrum licenses acquired.