|[February 28, 2013]
T-Mobile USA Reports Fourth Quarter 2012 Operating Results
BELLEVUE, Wash. --(Business Wire)--
As T-Mobile (News - Alert) USA, Inc. ("T-Mobile") closed out its fourth quarter, the
Company continued to generate business momentum by executing its
Challenger strategy, while laying the groundwork for its unique
'Un-carrier' initiatives aimed at changing the rules of wireless.
Evidence of this continued momentum is clearly demonstrated by fourth
quarter results, which include an increase in net customers, a
year-on-year reduction in branded contract churn, an agreement with
Apple to bring products to market together in 2013, a transition to more
customer-focused Value plans and an accelerated network modernization
John Legere, President and CEO of T-Mobile USA, explains, "T-Mobile
finished 2012 on a strong note, providing a foundation for executing
even bigger game-changing moves in 2013. As the 'Un-carrier,' our
promise is simple. You will see us put customers at the center of
everything we do going forward, and that means giving them fair and
simple wireless experiences in a way that other carriers never have
T-Mobile continues to make significant progress executing the five
elements of its Challenger Strategy, the Company's playbook for
challenging the industry status quo with a disruptive approach.
Amazing 4G Services
As part of the Company's ongoing commitment to provide customers with a
game-changing network experience, T-Mobile has completed technology
enhancements to improve its network voice and data coverage in 49
metropolitan areas, enhancing the already powerful 4G experience that it
currently delivers. Today, T-Mobile announced that it has completed
upgrades in several new metro areas, including Orlando, FL, Ann Arbor,
MI, and Richmond, VA. The Company's HSPA+ network currently serves 225
million people nationwide, with 142 million people covered by 4G on 1900
MHz spectrum. T-Mobile is also accelerating the launch of its Long Term
Evolution (LTE) service and will now reach 100 million people with LTE
by mid-2013 and more than 200 million people with LTE by the end of the
year. LTE networks have been completed in Las Vegas, NV and Kansas City,
MO and are ready for customers as LTE devices launch in 2013.
Value plans continue to grow rapidly in popularity, with 1.3 million
customers choosing the plans during the fourth quarter. T-Mobile now has
more than six million customers on its Value plans - or 30% of its
branded contract base, up from 23% at the end of the third quarter.
T-Mobile's "bring your own device" (BYOD) program continues to gain
momentum as customers seek better network service at more affordable
prices. Approximately 100,000 iPhone customers every month are making
the switch to T-Mobile under the BYOD plans, bringing the total number
of iPhone users currently on the T-Mobile network to more than 2
million. Taken together, these initiatives are aimed at enhancing the
Company's overall competitive position and initiating a return to
positive growth in the branded contract customer segment. In the fourth
quarter, branded contract revenues declined sequentially by 4.3% to $3.4
billion and 13.9% year-on-year, reflecting the increased sales of Value
plans and the loss of branded contract customers. The popularity of
Value plans also resulted in branded contract ARPU of $55.47, a decline
of 2.0% sequentially and 4.7% on a year-on-year basis. Howevr, these
declines were partially offset by higher equipment revenues, resulting
in a sequential increase in total revenues.
T-Mobile continues to offer a wide selection of popular Samsung (News - Alert)
smartphones, including the Samsung Galaxy S® III, Samsung
Galaxy S® II and the Samsung Galaxy Note® II. The
Company's product lineup will be further enhanced when it begins
offering Apple products this year.
At Deutsche Telekom's (News - Alert) Capital Markets Day in December 2012, T-Mobile
announced its bold 'Un-carrier' strategy featuring an aggressive move to
Value plans with a straightforward rate structure that provides
customers with unmatched value for their device, and fair, simple and
transparent pricing for voice and data service.
Importantly, T-Mobile is on track to close the merger with MetroPCS in
the first half of 2013, a combination that will create the premier
challenger in the U.S. wireless market. "We are looking forward to the
merger of T-Mobile USA and MetroPCS. This combination will substantially
benefit the shareholders and customers of both companies by creating the
leading wireless value carrier with expanded scale, spectrum and
financial resources to compete across the entire U.S. market," said Ren�
Obermann, CEO of Deutsche Telekom.
The Company increased the number of customers served through its Mobile
Virtual Network Operator (MVNO) partnerships by 275,000 during the
quarter, an almost five-fold increase from the same period in 2011. The
B2B segment continued to demonstrate momentum against the growth plans
put in place in mid-2012. The B2B channel grew during the fourth
quarter, particularly among small and mid-market businesses such as
Alternatives Unlimited Inc. and Creative Mobile Technology. Other
notable wins during the quarter included SAP and Nokia Siemens (News - Alert) Networks
(NSN). Overall, the number of B2B customers (Corporate, Government and
Individual Liable subscribers) grew by 7% year-on-year to 6.4 million,
compared to the 5% growth rate in the third quarter of 2012.
Challenger Business Model
The Company exceeded its previously stated goal of $900 million in
annual gross cost savings for 2012, which enabled investment in its
Challenger strategy initiatives. T-Mobile will continue to look for
opportunities to reduce overhead and other operational costs without
adversely impacting its customer experience and network operations. This
includes re-evaluating the Company's cost structure and eliminating
initiatives that do not fit the 'Un-carrier' value proposition and
business model. These cost savings, which will be largely reinvested
into the Company, are an essential part of laying the foundation for
successfully executing the 'Un-carrier' value proposition in the market.
"These milestones, combined with our plans to bring products to market
with Apple and the 'Un-carrier' value proposition that we are prepared
to launch in 2013, promise to bring a new, fiercely competitive T-Mobile
to market," continued Legere. "With our expanded scale, spectrum and
financial resources, the new T-Mobile will be the value leader in the
U.S., challenging the legacy, utility-like providers, and bringing new
choices to customers, as well as a unique growth opportunity for
Quarterly Financial Results:
For more detailed summary of T-Mobile's fourth quarter 2012 financial
results including selected data tables and definitions of terms, please
see the separate financial results release.
This news release includes "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. The
statements in this news release regarding the business outlook, expected
performance and forward-looking guidance, as well as other statements
that are not historical facts, are forward-looking statements. The words
"estimate," "project," "forecast," "intend," "expect," "believe,"
"target," "providing guidance" and similar expressions are intended to
identify forward-looking statements.
Forward-looking statements are estimates and projections reflecting
management's judgment based on currently available information and
involve a number of risks and uncertainties that could cause actual
results to differ materially from those suggested by the forward-looking
statements. With respect to these forward-looking statements, management
has made assumptions regarding, among other things, customer and network
usage, customer growth and retention, pricing, operating costs, the
timing of various events and the economic and regulatory environment.
About T-Mobile USA
Based in Bellevue, Wash., T-Mobile USA, Inc. is the U.S. wireless
operation of Deutsche Telekom AG (News - Alert) (OTCQX: DTEGY). By the end of the
fourth quarter of 2012, approximately 132.3 million mobile customers
were served by the mobile communication segments of the Deutsche Telekom
group - 33.4 million by T-Mobile USA - all via a common technology
platform based on GSM and UMTS and additionally HSPA+ 21/HSPA+ 42.
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
In order to provide comparability with the results of other U.S.
wireless carriers, all financial amounts are in U.S. dollars and are
based on accounting principles generally accepted in the United States
("GAAP"). T-Mobile USA results are included in the consolidated results
of Deutsche Telekom, but differ from the information contained herein
as, among other things, Deutsche Telekom reports financial results in
Euros and in accordance with International Financial Reporting Standards
For more information, please visit http://www.T-Mobile.com.
T-Mobile is a federally registered trademark of Deutsche Telekom AG. For
further information on Deutsche Telekom, please visit www.telekom.de/investor-relations.
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