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T-Mobile International reports second quarter 2002 results of U.S operations

Bonn/Bellevue, August 14, 2023  
  • EBITDA of $156 million in the second quarter
  • U.S. customer base surpasses 8.0 million 
  • 646,700 contract net additions in the second quarter
  • 525,900 increase in subscribers, including 73,200 from acquisitions
  • T-Mobile brand launched in California and Nevada
  • T-Mobile first-to-market with innovative, integrated devices

T-Mobile International AG, the mobile communications subsidiary of Deutsche Telekom AG (NYSE: DT), today announced second quarter 2002 results of its U.S. operations, consisting of VoiceStream Wireless Corporation and Powertel, Inc., which both operate under the VoiceStream brand. The VoiceStream results reported in this press release include Powertel's results. All financial figures are in USD and are in accordance with U.S. GAAP.

" VoiceStream had another very strong quarter. We continued our strong subscriber growth and exceeded our financial targets," said Kai-Uwe Ricke, CEO of T-Mobile International and Member of the Board of Management, Deutsche Telekom. " EBITDA more than doubled from the first quarter while contract subscriber additions reached an all-time h&" uot;gh."

Robert Dotson, President and Chief Operating Officer of VoiceStream, said, " We are extremely pleased by our results during the first half of 2002. We continue to deliver on our Get More promise to customers and are now seeing the results of that promise reflected in our financial results. With the launch of service in California and Nevada, the T-Mobile brand makes its debut in the U.S., and 33 million more potential customers get access to our GET MORE service offering — the growth engine behind our strong results to date."  

In the second quarter ended June 30, 2002, VoiceStream increased its subscriber base by 525,900, including 73,200 through acquisitions. Total customers now exceed 8 million. Contract net additions amounted to 646,700 compared to 556,700 contract net additions in the first quarter. Including acquisitions, VoiceStream added 691,700 new contract subscribers in the second quarter. Contract churn continued to decline, dipping below 2.5% in the second quarter. The pre-pay customer base decreased by 165,800 customers as a result of new programs the company put in place to improve the quality of the prepaid customer base. The new programs resulted in lower gross subscriber additions, which combined with the higher churn rate associated with the prepaid business, resulted in a shrinking prepaid customer base for the second straight quarter. Contract subscribers now comprise 80% of the 8.0 million subscriber base compared to 74% at the end of 2001. 

Service revenues exceeded $1.1 billion in the second quarter representing growth of 11.1% over the first quarter. Total revenues in the second quarter amounted to approximately $1.3 billion. Contract subscriber ARPU was $52 in the second quarter compared to $51 in the first quarter. Blended ARPU, including prepaid and roaming revenues, amounted to $49, compared to $48 in the first quarter. 

VoiceStream reported EBITDA of $156 million in the second quarter, more than doubling EBITDA from the first quarter. EBITDA margin to service revenues was 13.6%, compared to 6.2% in the first quarter. The cost of acquiring a subscriber, referred to as CPGA in the U.S., was $311 in the second quarter and the cost of serving customers (covering all other operating expenses) was $25 per customer per month. 

Capital expenditures amounted to $488 million in the second quarter. 

Key " Get more" highlights:

  • " Get More" service: 
    • The T-Mobile brand debuted in the U.S. market with the launch of service in California and Nevada on July 18th. Consistent with T-Mobile's GET MORE promise, California and Nevada customers now get the best value in their wireless service with large buckets of unrestricted `whenever` minutes, and first-to-market integrated voice and data devices, designed to offer customers the full range of features available from T-Mobile's all digital GSM/GPRS voice and high speed data network, the largest in the country. 
    • All existing VoiceStream markets will transition to the T-Mobile brand by fall. New markets Cleveland, OH and central Pennsylvania launch service this week, with Buffalo, Rochester and Virginia coming on line in the next few weeks. By the end of the year, more than 200 million people in the United States will have the choice to GET MORE from their wireless service with T-Mobile
  •  " Get More" first-to-market devices: 
    • The BlackBerry 5810™ wireless handheld device that integrates phone functionality with the popular Blackberry™ wireless e-mail solution is available exclusively in California and Nevada through T-Mobile and nationwide through VoiceStream. Additionally, T-Mobile is the only provider in California and Nevada to offer customers the Nokia 3390 and Samsung R225 with AOL® Instant Messenger™ (AIM®) directly integrated into the user interface - the easiest and most convenient way to use the popular AOL® Instant Messenger™ service on a mobile device. The devices are available nationwide through VoiceStream. 
    •  VoiceStream/T-Mobile U.S.A. recently became the first to offer the Microsoft® Windows® Powered Pocket PC 2002 Phone Edition. Available nationwide, the voice-enabled PDA offers a rich, full color Internet experience that's fully integrated with pocket versions of all the popular Microsoft software applications.
    • Last week, Danger, Inc. announced a partnership with VoiceStream/T-Mobile U.S.A. to bring the first Hiptop™ enabled device to the U.S. market — named the T-Mobile SideKick™. The much anticipated device — which won " Best in Show" at the Consumer Electronics Show earlier this year — integrates voice, Web, instant messaging and entertainment services on a fun, all-in-one device. The T-Mobile Sidekick™ will be available nationwide in the fall exclusively through T-Mobile in the U.S. 
  • " Get More" Catherine Zeta-Jones:
    • In June, T-Mobile International announced a new global spokeswoman, internationally acclaimed Welsh actress Catherine Zeta-Jones. The new multi-media advertising campaign featuring Zeta-Jones debuted with the launch of service in California and Nevada.

Key figures for T-Mobile USA Operations

(`000) Q1/02 Q2/02 1H/02
Covered population 162,000 162,000 162,000
Customers 7,501 8,027 8,027
thereof contract subscribers 5,729 6,421 6,421
thereof pre-pay customers 1,772 1,606 1,606
       
MOUs/Contract Sub/Month 550 600 580
Contract churn <2.7% <2.5% <2.6%
Blended churn 4.4% 4.1% 4.3%
       
($ / month)      
ARPU (blended) 48 49 49
ARPU (contract) 51 52 52
Cost of Serving (CCPU) 26 25 26
       
CPGA 291 311 302
       
($ million)      
Total revenues 1,176 1,309 2,485
thereof VoiceStream 1,016 1,143 2,159
thereof Powertel 160 166 326
Service revenues* 1,037 1,152 2,189
Adjusted EBITDA** 75 170 245
Incentive bonuses 11 14 25
EBITDA *** 64 156 220
thereof VoiceStream 43 127 170
thereof Powertel 21 29 50
Capex 419 488 907
thereof VoiceStream 407 433 840
thereof Powertel 12 55 67

* Subscriber, prepaid, and roaming revenues.

** Excluding incentive bonuses related to the DT merger.

*** Defined as operating loss excluding depreciation and amortization and stock-based compensation.

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