T-Mobile USA posts Q2’09 results
www.WirelessFederation.com/news: T-Mobile USA, Inc. (T-Mobile USA) today reported second quarter of 2009 results. In the second quarter of 2009, T-Mobile USA reported
OIBDA of $1.6 billion, up 16% compared to the first quarter of 2009 and up 1% from the second quarter of 2008, with an OIBDA margin of 34%.
Additionally, T-Mobile USA reported contract churn of 2.2%, down from 2.3% in the first quarter of 2009, and 325,000 net new customers in the second quarter of 2009.
“In 2009, we’re launching the best products and services we’ve ever brought to market,” said Robert Dotson, President and CEO, T-Mobile USA.
“In the quarter, we unveiled devices like our new T-Mobile myTouch 3G with Google. The myTouch will join other new T-Mobile 3G devices just in time for a powerful back-to-school offering available in even more locations with our newly announced RadioShack retail agreement. In the quarter, we also made steady progress in growing data revenues as more customers move to craved-for mobile internet and messaging services. And finally, in Q2 we also drove operational cost efficiencies that helped us deliver a much better margin for the quarter.”
“We see opportunities for new growth given the anticipated growing demand for innovative mobile internet and data services in the U.S. market,” said Rene Obermann, CEO of Deutsche Telekom. “In the area of cost control, I’m pleased with efforts by the U.S. team to drive a sequential increase in margin.”
Subscribers
1. In the second quarter of 2009, T-Mobile USA added 325,000 net new customers, down from 415,000 in the first quarter of 2009 and 668,000 in the second quarter of 2008.
2. The number of net new customer additions decreased compared to the second quarter of 2008 primarily due to higher churn of contract customers, as explained below. Gross customer additions increased year-on-year, and continue to be driven by strong growth in lower ARPU products.
3. Contract customer net additions made up 17% of customer growth in the second quarter of 2009, compared to 39% in the first quarter of 2009 and 80% in the second quarter of 2008. The decrease in contract customer additions year-over-year is due to higher contract churn, including FlexPaysm. Additionally, gross contract customer additions were lower as lower gross customer additions of branded products were partially
offset by strong machine-to-machine contract additions.
4. Prepaid net customer additions, including wholesale customers, were 268,000 in the second quarter of 2009, up from 255,000 in the first quarter of 2009 and up from 143,000 in the second quarter of 2008.
5.Contract customers comprised 81% of T-Mobile USA’s total customer base at June 30, 2009. T-Mobile USA ended the second quarter of 2009 with 33.5 million customers, up from 33.2 million at the end of the first quarter of 2009.
Churn
1. Contract churn was 2.2% in the second quarter of 2009, down from 2.3% in the first quarter of 2009 and up from 1.9% in the second quarter of 2008.
2. Contract churn decreased in the second quarter of 2009 compared to the first quarter of 2009, due in part to customer loyalty initiatives.
3. Blended churn, including both contract and prepaid customers, was 3.1% in the second quarter of 2009, in line with the first quarter of 2009 and up from 2.7% in the second quarter of 2008.
4. Blended churn compared to the second quarter of 2008 continues to be impacted by competitive intensity in both the contract and prepaid customer segments.
OIBDA and Net Income.
OIBDA
1. T-Mobile USA reported OIBDA of $1.60 billion in the second quarter of 2009, up from $1.38 billion in the first quarter of 2009 and $1.58 billion in the second quarter of 2008.
2. The sequential increase in OIBDA was primarily due to lower operating expenses. The implementation of cost saving initiatives combined with lower commission costs and handset subsidies contributed to the decrease.
3. OIBDA margin (as defined in Note 6 to the Selected Data, below) was 34% in the second quarter of 2009, up from 29% in the first quarter of 2009 and 33% in the second quarter of 2008.
4. Net income for the second quarter of 2009 was $425 million, up from $322 million in the first quarter of 2009, but down from $452 million in the second quarter of 2008.
Revenue
1. Service revenues (as defined in Note 1 to the Selected Data, below) were $4.77 billion in the second quarter of 2009, in line with the first quarter of 2009, but down from $4.85 billion in the second quarter of 2008.
2. Sequentially, service revenues were stable, as lower voice revenues were offset by data revenue growth.
3. The decrease in service revenues in the second quarter of 2009 compared to the second quarter of 2008 was primarily due to lower revenues from contract customers resulting from a higher proportion of lower ARPU customers combined with reduced customer spending.
4. Total revenues, including service, equipment, and other revenues were $5.34 billion in the second quarter of 2009, down from $5.40 billion in the first quarter of 2009 and $5.47 billion in the second quarter of 2008.
5. The decrease in total revenues year-over-year was primarily due to the decrease in service revenues as discussed above. Sequentially, the decrease was driven by lower equipment sales.
ARPU
1. Blended Average Revenue Per User (“ARPU” as defined in Note 1 to the Selected Data, below) was $48 in the second quarter of 2009, in line with the first quarter of 2009 but down from $52 in the second quarter of 2008.
2. Contract ARPU was $52 in the second quarter of 2009, in line with the first quarter of 2009, but down from $55 in the second quarter of 2008.
3. Contract ARPU year-over-year decreased due to a higher proportion of lower ARPU customers in the customer base, the loss of some higher-value customers due to competitive intensity and lower variable revenues, including roaming.
4. Prepaid ARPU was $21 in the second quarter of 2009, in line with first quarter of 2009 but down from $23 in the second quarter of 2008.
5. The decrease in prepaid ARPU is due in part to an increase in the proportion of lower ARPU customers, such as wholesale customers.
6. Data services revenue (as defined in Notes 1 and 8 to the Selected Data, below) was $990 million in the second quarter of 2009, representing 20.8% of blended ARPU, or $9.90 per customer, up from 19.6% of blended ARPU, or $9.40 per customer in the first quarter of 2009, and 16.6% of blended ARPU, or $8.60 per customer in the second quarter of 2008. Data services revenue increased 6% compared to the first quarter of 2009 and 23% year-over-year.
7. 2.1 million 3G-capable converged devices (such as the T-Mobile G1TM, the 3G-enabled Sidekick LX, and the Samsung Behold and Memoir) were on the T-Mobile USA network at the end of the second quarter of 2009, an increase of almost 40% from the first quarter of 2009.
8. The increase of 3G-capable converged devices and the continued build out of the 3G network has resulted in increased adoption of 3G data plans, driving data ARPU growth.
9. The total number of messages carried on the T-Mobile USA network increased to 74 billion in the second quarter of 2009, compared to 66 billion in first quarter of 2009 and 41 billion in the second quarter of 2008. Messaging revenue continues to be a significant component of data ARPU.
About T-Mobile USA:
Based in Bellevue, Wash., T-Mobile USA, Inc. is the U.S. wireless operation of Deutsche Telekom AG (NYSE: DT). By the end of the second quarter of 2009, almost 150 million mobile customers were served by the mobile communication segments of the Deutsche Telekom group – 33.5 million by T-Mobile USA – all via a common technology platform based on GSM and UMTS, the world’s most widely-used digital wireless standards. T-Mobile USA’s innovative wireless products and services help empower people to connect to those who matter most. Multiple independent research studies continue to rank T-Mobile USA among the highest in numerous regions throughout the U.S. in wireless customer care and call quality.
For more information, please visit http://www.T-Mobile.com.
