T-Mobile reports Q2 earnings

T-Mobile released its second-quarter report today. The bullet points:

Added 325,000 new customers, down from 415,000 in Q1 and near half as many equally in Q2 2008.
Churn was two.two percent, down from 2.3 per centum in Q1 2009 but ane.9 percent higher than Q2 2008.
$1.threescore billion in income, up from $1.38 billion in Q1 2009 and $1.58 billion in Q2 2008. The increase is from reduced operating costs.
Total revenue was $5.34 billion in the second quarter, down from $five.40 billion in Q1 2009 and $5.47 billion in Q2 2008.
Average revenue per user (the beloved ARPU) was $48, in line with Q1 2009 but down from $52 in Q2 2008.

More than hither and later the break.

T-Mobile USA Reports Second Quarter 2009 Results

$1.6 billion Operating Income Before Depreciation and Amortization ("OIBDA") in the 2d quarter of 2009, up 16% from the kickoff quarter of 2009 and upward 1% from the second quarter of 2008
OIBDA Margin increased to 34% from 29% in offset quarter of 2009 and 33% in the second quarter of 2008; focused efforts on reducing operating expenses helped improve margin
Contract customer churn of ii.ii% in the second quarter, downwards from ii.3% in the first quarter of 2009, but up from i.9% in the second quarter of 2008
Data ARPU growth accelerated to 15% twelvemonth-on-yr from 11% year-on-year in the first quarter of 2009
325,000 net new customers added in the 2nd quarter of 2009, down from 415,000 in the showtime quarter of 2009 and 668,000 in the second quarter of 2008
Launched the T-Mobile ^® myTouch™ 3G, the highly predictable second Android device
Retail agreement announced with RadioShack to offer T-Mobile products in more than 4,000 stores

BELLEVUE, Launder.--(BUSINESS WIRE)--T-Mobile USA, Inc. (T-Mobile United states) today reported second quarter of 2009 results. In the second quarter of 2009, T-Mobile United states of america reported OIBDA of $1.6 billion, up 16% compared to the start 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.two%, 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 U.s.a.. "In the quarter, we unveiled devices like our new T-Mobile myTouch 3G with Google. The myTouch volition join other new T-Mobile 3G devices just in time for a powerful back-to-schoolhouse offering bachelor in even more locations with our newly announced RadioShack retail understanding. In the quarter, nosotros also made steady progress in growing data revenues as more than customers move to craved-for mobile internet and messaging services. And finally, in Q2 we also drove operational price efficiencies that helped united states of america deliver a much better margin for the quarter."

"Nosotros see opportunities for new growth given the anticipated growing need for innovative mobile internet and data services in the U.S. market," said Rene Obermann, CEO of Deutsche Telekom. "In the surface area of price control, I'thousand pleased with efforts past the U.S. squad to drive a sequential increase in margin."

Customers

In the 2d quarter of 2009, T-Mobile United states added 325,000 net new customers, down from 415,000 in the starting time quarter of 2009 and 668,000 in the second quarter of 2008.
- The number of cyberspace new customer additions decreased compared to the second quarter of 2008 primarily due to higher churn of contract customers, equally explained below. Gross customer additions increased year-on-year, and continue to exist driven past strong growth in lower ARPU products.
- Contract customer net additions fabricated up 17% of customer growth in the 2d quarter of 2009, compared to 39% in the first quarter of 2009 and lxxx% in the second quarter of 2008. The decrease in contract customer additions yr-over-twelvemonth is due to higher contract churn, including FlexPay^sm.Additionally, gross contract client additions were lower every bit lower gross client additions of branded products were partially outset past strong automobile-to-automobile contract additions.
- Prepaid net client additions, including wholesale customers, were 268,000 in the second quarter of 2009, up from 255,000 in the showtime quarter of 2009 and upwardly from 143,000 in the 2d quarter of 2008.
Contract customers comprised 81% of T-Mobile U.s.'south total client base at June 30, 2009. T-Mobile USA ended the 2nd quarter of 2009 with 33.5 one thousand thousand customers, up from 33.two million at the stop of the first quarter of 2009.

Churn

Contract churn was 2.2% in the second quarter of 2009, downwards from two.3% in the offset quarter of 2009 and up from i.ix% in the second quarter of 2008.
- Contract churn decreased in the 2d quarter of 2009 compared to the first quarter of 2009, due in part to customer loyalty initiatives.

Blended churn, including both contract and prepaid customers, was iii.one% in the second quarter of 2009, in line with the first quarter of 2009 and up from two.7% in the second quarter of 2008.
- Blended churn compared to the 2d quarter of 2008 continues to be impacted past competitive intensity in both the contract and prepaid customer segments.

OIBDA and Internet Income

T-Mobile U.s. reported OIBDA of $1.sixty billion in the second quarter of 2009, upward from $1.38 billion in the start quarter of 2009 and $1.58 billion in the 2nd quarter of 2008.
- 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.
OIBDA margin (as defined in Note 6 to the Selected Data, beneath) was 34% in the second quarter of 2009, up from 29% in the outset quarter of 2009 and 33% in the second quarter of 2008.
Cyberspace income for the 2d quarter of 2009 was $425 meg, up from $322 1000000 in the first quarter of 2009, merely down from $452 million in the 2d quarter of 2008.

Acquirement

Service revenues (as divers in Annotation ane to the Selected Information, beneath) were $4.77 billion in the 2d quarter of 2009, in line with the first quarter of 2009, only downward from $4.85 billion in the second quarter of 2008.
- Sequentially, service revenues were stable, as lower voice revenues were offset by data revenue growth.
- The subtract 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 client spending.
Full revenues, including service, equipment, and other revenues were $5.34 billion in the 2nd quarter of 2009, down from $5.twoscore billion in the beginning quarter of 2009 and $5.47 billion in the second quarter of 2008.
- The decrease in full revenues twelvemonth-over-year was primarily due to the decrease in service revenues as discussed above. Sequentially, the decrease was driven past lower equipment sales.

ARPU

Blended Average Revenue Per User ("ARPU" every bit defined in Annotation 1 to the Selected Data, beneath) was $48 in the second quarter of 2009, in line with the get-go quarter of 2009 but down from $52 in the second quarter of 2008.

Contract ARPU was $52 in the second quarter of 2009, in line with the first quarter of 2009, but down from $55 in the 2nd quarter of 2008.
- Contract ARPU year-over-year decreased due to a college 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.
Prepaid ARPU was $21 in the second quarter of 2009, in line with first quarter of 2009 simply down from $23 in the second quarter of 2008.
- The decrease in prepaid ARPU is due in office to an increase in the proportion of lower ARPU customers, such equally wholesale customers.
Data services revenue (equally defined in Notes 1 and 8 to the Selected Information, below) was $990 million in the 2nd quarter of 2009, representing twenty.8% of blended ARPU, or $nine.xc per customer, upwards from xix.6% of blended ARPU, or $9.40 per customer in the showtime quarter of 2009, and 16.6% of blended ARPU, or $8.60 per client in the second quarter of 2008. Information services revenue increased 6% compared to the first quarter of 2009 and 23% twelvemonth-over-year.
- ii.ane 1000000 3G-capable converged devices (such every bit the T-Mobile G1^TM, the 3G-enabled Sidekick LX, and the Samsung Behold and Memoir) were on the T-Mobile Us network at the cease of the second quarter of 2009, an increment of almost xl% from the start quarter of 2009.
- The increase of 3G-capable converged devices and the connected build out of the 3G network has resulted in increased adoption of 3G information plans, driving data ARPU growth.
- The full number of letters carried on the T-Mobile Usa network increased to 74 billion in the 2nd 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 pregnant component of information ARPU.

CPGA and CCPU

The average cost of acquiring a client, Cost Per Gross Add ("CPGA" equally defined in Note iv to the Selected Data, below) was $270 in the second quarter of 2009, down from $300 in the kickoff quarter of 2009 and $320 in the 2d quarter of 2008.
- CPGA decreased in the second quarter of 2009 compared to the first quarter of 2009. This was primarily related to lower customer acquisition expenses, including commissions.

The boilerplate cash price of serving customers, Cash Cost Per User ("CCPU" as divers in Annotation three to the Selected Data, below), was $23 per client per month in the second quarter of 2009, downward from $25 in the first quarter of 2009 and second quarter of 2008.
- The sequential subtract in CCPU is partly due to the successful implementation of cost saving initiatives and lower retention costs, including a lower subsidy loss per handset.
Year-over-year both CPGA and CCPU accept decreased due to a change in the mix in customer additions and the customer base of operations towards lower ARPU products which incur lower conquering and servicing costs.

Uppercase Expenditures

Cash uppercase expenditures (as defined in Note 7 to the Selected Data, beneath) were $1.08 billion in the second quarter of 2009, compared to $1.13 billion in the beginning quarter of 2009 and $1.06 billion in the 2d quarter of 2008.
- T-Mobile USA'south continued focus on network quality and coverage every bit well as the national roll-out of the UMTS/HSDPA (3G) network resulted in consistent capital expenditures year-on-yr and sequentially.
- T-Mobile USA continues to invest in the 3G network which now covers 176 cities and reaches 121 meg people, and is expected to continue to abound throughout the year.

Stick Together Highlights

On June 22, 2009, T-Mobile USA announced the availability of the T-Mobile myTouch 3G, the side by side highly anticipated Android device. T-Mobile myTouch 3G boasts a sleek wait and contoured feel, plus an array of new features that builds on the popular T-Mobile G1. A touch-screen brandish with virtual keyboard is congenital into a slim, smooth and lightweight design.
- Other new products launched include the 3G webConnect USB Laptop Stick, 3G-enabled Sidekick Sixty™, T-Mobile^® Nuance 3G^TM, HTC Affect Pro2^TM, and the BlackBerry Curve 8520.
On July 23, 2009, T-Mobile USA announced a retail understanding with RadioShack to offer T-Mobile products and services in more than four,000 stores. The relationship expands RadioShack's wireless offerings and for T-Mobile USA, the understanding nearly doubles the number of national retail partner stores offering its products and services nationwide, making RadioShack T-Mobile USA'south largest national retail partner.

T-Mobile USA is the U.S. wireless operation of Deutsche Telekom AG (NYSE:DT). In order to provide comparability with the results of other U.s.a. wireless carriers, all financial amounts are in United states of america dollars and are based on bookkeeping principles generally accustomed in the United States ("GAAP"). T-Mobile The states results are included in the consolidated results of Deutsche Telekom, but differ from the data independent herein as Deutsche Telekom reports financial results in Euros and in accordance with International Financial Reporting Standards (IFRS).

This press release includes non-GAAP financial measures. The non-GAAP fiscal measures should be considered in improver to, simply not as a substitute for, the information provided in accord with GAAP. Reconciliations from the not-GAAP financial measures to the most directly comparable GAAP financial measures are provided below following Selected Data and the financial statements.