T-Mobile CEO John Legere has reasons to cheer this time because the company’s Q3 2017 earnings were the best in the US wireless industry.
T-Mobile posted service revenue of $7.6 billion (+7 percent), revenue of $10 billion (+8 percent), net income of $550 million (+50 percent), EBITDA of $2.8 billion (+5 percent) and subscriber addition of 1.3 million in Q3 2017.
Total net customer additions were 1.3 million in Q3 2017, bringing its total customer count to 70.7 million. Q3 2017 marks 18 straight quarters in which T-Mobile generated more than 1 million total net customer additions.
T-Mobile’s postpaid ARPU was $46.93, down 0.3 percent from Q2 2017 and down 2.5 percent from Q3 2016 primarily due to the adoption of T-Mobile ONE and dilution from promotional activities and hurricane related impacts of $0.19.
T-Mobile said its postpaid ARPU in 2017 will be stable compared to 2016, with quarterly variations driven by the migrations to T-Mobile ONE rate plans.
Prepaid ARPU of T-Mobile reached $38.93, registering 2.4 percent growth from Q3 2016, due to growth of MetroPCS customers who generate higher ARPU, partially offset by negative hurricane related impacts of $0.18.
T-Mobile said the negative impact from hurricanes was $31 million in Q3 2017.
The negative impact on net income from hurricane related losses in Texas, Florida and Puerto Rico from lost revenue, assets damaged or destroyed and other costs incurred was $90 million in Q3 2017. T-Mobile will be adding more expenses in Q4 2017 primarily related to operations in Puerto Rico.
EBITDA increased 5 percent in Q3 2017 to $2.8 billion from higher service revenues and lower losses on equipment, partially offset by higher SG&A costs, higher cost of services expense, lower gains on disposal of spectrum licenses and a $148 million negative impact from hurricanes.
Excluding spectrum gains from all periods, Adjusted EBITDA growth was 12 percent. EBITDA margin as a percentage of service revenue was 37 percent in Q3 2017, down from 38 percent in Q3 2016 — driven by lower gains on disposal of spectrum licenses compared to prior year period.
T-Mobile will be deploying its 600 MHz spectrum in more than 1.2 million square miles in 2017 with devices. Majority of new devices in 2018 will be compatible with 600 MHz spectrum. T-Mobile has deployed 600 MHz spectrum in Cheyenne, Wyoming and Scarborough, Maine.
T-Mobile will also use a portion of 600 MHz spectrum to deploy America’s first 5G network in the 2019 – 2020 time frame.
T-Mobile 4G LTE coverage reached 316 million people against the target of 321 million people by the end of 2017.
T-Mobile plans to open 3,000 stores in 2017, including 1,500 T-Mobile stores and 1,500 MetroPCS stores. The company has 1,200 new T-Mobile stores and 1,300 net new MetroPCS stores.
