msmobiles.com - Cellular News - T-Mobile reports big growth rates, particularly T-Mobile USA is doing very well

T-Mobile reports big growth rates, particularly T-Mobile USA is doing very well
May 13, 2004;
T-Mobile is 2nd (after Vodafone) largest cellular network operator in the world so it may be interesting to know what's up!

T-Mobile International reports two-digit growth rates in its revenue, EBITDA and customer base in the first quarter of 2004.

Record growth in the USA: 1.2 million new customers

Further advances in mobile data services in all T-Mobile countries

Despite keener competition in important European markets, T-Mobile International markedly improved its revenue and EBITDA in the first quarter of 2004. The group generated an income of EURO 5.94 billion compared to € 5.31 billion in the same quarter of the previous year. EBITDA – earnings before interest, taxes, depreciation and amortization adjusted for special factors – came to €1.68 billion, which was more than ten percent up on the previous year’s figure of € 1.51 billion. The results from ordinary business activities of € 156 million were very positive following a loss of € 77 million in the same quarter of the previous year.

The number of customers at T-Mobile’s majority shareholdings rose from about 55.1 million in the first quarter of 2003 to approximately 63.4 million. This strong increase was primarily a result of the rapid development in the USA. In the first quarter of 2004 alone, T-Mobile acquired 2.4 million new customers, about 1.2 million of which are in the USA. At the end of the first quarter of 2004, T-Mobile USA had more than 14.3 million customers, about 32 percent more than at the same time in 2003, when about 10.8 million customers were using T-Mobile USA’s network.

Mobile data services continued to develop well in all the national companies. In the first quarter of this year, data services accounted for 17 percent of the average revenue per customer in Europe and 4 percent in the USA. As far as offers for mobile voice services were concerned, T-Mobile customers were very interested in the Relax tariffs and the personal mobile ringing tones (Caller Tunes or SoundLogo), which are particularly marketed in Europe. Only four months after the marketing launch of the Relax tariffs, 600,000 European T-Mobile customers were already using these package services. More than half a million customers are enthusiastically using the Caller Tunes or the SoundLogo service in Germany, the UK and the Czech Republic.

T-Mobile Deutschland

The German subsidiary again made a major contribution to the entire group’s EBITDA in the first quarter of 2004 with approx. € 773 million. The slight fall compared to the previous year’s figure of € 814 million was caused by several non-operational influences. In the first quarter of 2003, non-operational influences had had a positive effect – for example insurance reimbursements of € 30 million. In the first quarter of 2004, however, non-operational factors totaling approx. 60 million had a negative effect on the result. As a result of the sale of receivables (ABS, Asset Backed Security) launched in the fourth quarter of 2003 a replenishment of the cash reserve account recognized as income was carried out in this quarter. The EBITDA margin fell from 40.8 to 36.4 percent. Taking the non-operational influences into consideration, EBITDA would have remained stable in the period from January to March 2004 at just over 39 percent. Revenue rose to € 2.1 billion (previous year: € 2.0 billion). At the end of March 2004, T-Mobile Deutschland had over 26.7 million customers, thus consolidating its market leadership. In the first quarter alone, 348,000 new customer signed up with T-Mobile, more than half of them as contract customers. As in the other European companies, there was a particularly good response in Germany to the Relax tariffs which were introduced in February. Meanwhile, almost 500,000 customers had already signed up for one of the four Relax offers which is clearly more than expected. In the same period, about 300,000 T-Mobile customers already ordered SoundLogo to obtain a personal ringing tone for their mobile.

T-Mobile USA

About 93 percent of the total of 1.2 million new customers who signed up for T-Mobile USA in the first quarter of 2004 were contract customers. T-Mobile’s US subsidiary registered the second-largest increase in the number of customers of all the six national mobile providers in the USA. This extremely high growth in the number of customers led to a significant increase in revenue. T-Mobile USA’s income in the first three months of 2004 came to € 2.1 billion, compared to € 1.7 billion in the same period last year. EBITDA rose from € 323 million to € 405 million. Based on US dollars, EBITDA even increased by 46 percent to € 507 million (revenue: plus 43 percent to US$ 2.6 billion.)

T-Mobile UK

T-Mobile UK also recorded strong growth in the customer base in the first quarter of 2004. At the end of March, a total of 14.3 million customers were using the network of the British T-Mobile subsidiary, including the Virgin Mobile customers. The figure for the previous year had been 12.2 million. From the beginning of January to the end of March 2004 alone, 700,000 customers signed up with T-Mobile UK for the first time. The churn rate fell markedly to 1.2 percent from 4.2 percent in the same period of the previous year. Revenue rose from € 1.0 billion to € 1.1 billion. EBITDA increased by almost 39 percent from € 278 million in the first quarter of 2004 to €385 million. One reason was the positive effects of changes in contractual terms with Virgin Mobile and the non-recurrence of liabilities due to the sale of Virgin Mobile shares.

T-Mobile Austria

Due to the sale and deconsolidation of the consumer electronics and photographic equipment chain Niedermeyer there was a slight fall in revenue at T-Mobile Austria. Overall, the company recorded an income of € 236 million from January until March 2004 compared to € 273 million in the first quarter of 2003. The number of customers was approximately constant at about two million. The intensive price competition on the Austrian mobile phone market had a negative effect on the EBITDA which decreased from € 95 million to € 55 million. In Austria, as well, the Relax tariff initiative had a positive effect on the market: over 150,000 customers have already opted for this tariff.

T-Mobile Czech Republic

T-Mobile’s subsidiary in the Czech Republic almost reached the four-million-customer mark at the end of the first quarter of 2004, compared to approx. 3.55 million customers at the end of March 2003. The growth strategy of T-Mobile CZ was thus a success. Due to the accession of the Czech Republic to the European Community, the value added tax was increased by 17 percentage points. This increase was only partially passed on by T-Mobile CZ. As a result revenue remained almost constant at € 186 million (previous year: € 180 million). EBITDA was € 84 million compared to € 90 million in the quarter of the previous year.

T-Mobile Netherlands

T-Mobile Netherlands passed the two-million-customer mark in the first quarter of 2004. At the end of March, about 2.11 million customers were using the network of T-Mobile’s Dutch subsidiary, compared to 1.63 million at the end of the same quarter of the previous year. The average monthly revenue per customer was € 34, the highest of all of T-Mobile’s European companies. Revenue at T-Mobile Netherlands improved by 37 percent to € 250 million, up from € 182 million in the same quarter of the previous year. EBITDA was slightly positive at approx. €1 million. In the previous year the company still recorded a loss of € 27 million.

Mobile data services

At the end of March 2004, T-Mobile had about 5.5 million active users who have been using data services such a t-zones and / or Photo Messaging for the last 30 days. In the first quarter of this year, the number of t-zones downloads rose by approx. 25 percent to 5.4 million in the European T-Mobile markets of Germany, the UK, Austria, the Czech Republic and the Netherlands. Particularly popular were mobile music services, above all the ringing tones. They accounted for about 40 percent of all downloads. Strong demand was also recorded for the Messaging Services in the first three months 2004: world-wide, the T-Mobile networks transmitted 7.36 billion (previous year: 6.81 billion) text messages. The number of MMS sent rose by 45 percent to 12.2 million. Approx. 70 percent of all mobile phones sold by T-Mobile in Europe are now MMS-capable.

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