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T-Mobile International Reports Strong First Quarter 2002

Bonn, April 25, 2023
  • Group first-quarter EBITDA doubled year on year, reaching EUR 1.2 billion
  • EBITDA margin over 40 percent in Germany and 45 percent in the Czech Republic
  • EBITDA margin well above the 20-percent mark in the UK and the 30-percent mark in Austria for the first time
  • VoiceStream wins over half a million net new customers
  • VoiceStream delivers its first ever substantially positive EBITDA of over EUR 100 million
  • Successful rebranding of the majority-owned group companies in Germany, the UK, Austria and the Czech Republic.
In the first quarter of 2002, T-Mobile International continued its positive performance seen in the fourth quarter of last year. " In spite of a difficult macroeconomic environment, we've attained our best quarterly EBITDA ever without losing our growth momentum. T-Mobile remains the fastest-growing international mobile telephony provider by far," stated Kai-Uwe Ricke, CEO of T-Mobile International AG and Member of the Deutsche Telekom Board of Management. One week after renaming its majority-owned subsidiaries around Europe to carry the common T-Mobile brand, Deutsche Telekom's mobile telephony holding company presented its detailed figures for the first three months of the year in Bonn on Thursday. CFO Thomas G. Winkler commented: " The first-ever positive EBITDA contributed by VoiceStream and the upward curve of our margins in Europe conclusively demonstrate that growth is indeed compatible with increasing operating profitability." His colleague René Obermann, Boa rd of Management member responsible for European operations, added more on the company's strategic goals: " Besides further strengthening our market position, our prime objective now is rapid integration in Europe, to secure our operating profitability throughout the T-Mobile organization."

At the end of the first quarter of 2002, T-Mobile International served some 54.6 million customers. Over 46.3 million of these are covered by the majority-owned group companies in Germany, the United States, Britain, Austria and the Czech Republic, marking an increase of more than 45 percent over the figure one year earlier. T-Mobile International's minority holdings in Poland, Russia and the Netherlands clocked up growth of over 51 percent to attain a subscriber base of just under 8.3 million people as of March 31, 2002.

The group grew its first-quarter net revenues by more than 66 percent year on year, from EUR 2.7 billion in the prior-year period to just under EUR 4.5 billion. These revenue figures include VoiceStream and T-Mobile in the Czech Republic for the first time, which together contributed some EUR 1.5 billion.

T-Mobile International's earnings before interest, taxes, depreciation and amortization (EBITDA) were EUR 1.2 billion in the first quarter of 2002, doubling the result achieved in the same period last year. The EBITDA margin was approximately 27 percent. For the first time in these first-quarter results, VoiceStream made a positive contribution of EUR 106 million (reported according to German accounting principles) to group EBITDA, while pushing ahead with its strong subscriber growth. In the preceding quarter (Q4/2001), VoiceStream's EBITDA was still slightly in the red at EUR —71 million. The group's majority-owned companies in Europe attained an average EBITDA margin of over 35 percent to contribute EUR 1.1 billion to the absolute EBITDA figure. The margin thus showed an improvement of more than 13 percentage points year on year, primarily due to reduced customer acquisition cost. This fell due to both a volume effect and a reduction in unit acquisition cost per customer. The EBITDA for the quarter includes a one-time impact—totaling some EUR 47 million—of Media One's sale of its Westel stake to Matav.

VoiceStream
VoiceStream kept up its strong subscriber growth in the first quarter of 2002. Attaining a net increase in the total of more than half a million even though the number of prepay customers fell by just under 50,000, the company took its customer base up to the 7.5-million mark. The net gain of over 550,000 contract customers in the first quarter underscores the strategic focus on this subscriber segment.

VoiceStream also substantially boosted its revenues compared with the fourth quarter of 2001. They totaled just under EUR 1.4 billion, thus contributing more than 30 percent to T-Mobile International's consolidated revenues.

VoiceStream's first-ever positive EBITDA was achieved partly thanks to progress in managing costs, particularly lower acquisition cost per new customer, and partly to a reduction in the churn rate among contract customers—the rate is less than 3 percent.

T-Mobile Deutschland
At the end of the first quarter, T-Mobile Deutschland had more than 23 million customers in all. The figure was just under 2.2 million higher than a year previously, giving growth of over 10 percent. The customer base fell slightly, by about 43,000, relative to the 2001 year end, chiefly due to a reduction in the number of prepay customers that had come on board around Christmas 2000. However, the company held its market share at around 41 percent. The proportion of contract customers in the overall customer base was just under 47 percent at the end of the first quarter of 2002.

T-Mobile Deutschland increased its first-quarter net revenues by over 8 percent year on year, to just below EUR 1.8 billion.

EBITDA from German operations was almost two-thirds higher than in the corresponding quarter in 2001, totaling more than EUR 0.7 billion. Thus the first-quarter EBITDA margin was just under 41 percent, more than 14 percentage points above the prior-year value. The improved margin is largely attributable to lower customer acquisition costs. Average acquisition cost per subscriber was EUR 96 across the entire customer base, breaking down into EUR 172 per contract customer and EUR 32 per prepay customer.

T-Mobile UK
T-Mobile UK scored remarkable subscriber growth in the first quarter of 2002, adding almost 330,000 to a customer base now numbering just under 10.8 million subscribers for a year-on-year gain just below 20 percent. The positive trend toward more contract customers seen in the previous quarter was further strengthened in the quarter just ended. The net gain of just under 80,000 contract customers means that almost one new customer in four chose this alternative, doubling the proportion seen in the previous quarter. For the sake of comparison, in the first three months of 2001 the British subsidiary had suffered a net loss of 70,000 contract customers.

T-Mobile UK also achieved substantial revenue growth of just under 19 percent year on year, to report net revenues of more than EUR 0.9 billion in the period under review. The company's market share grew from 20.7 percent in the prior-year period to approximately 22 percent.

EBITDA almost doubled compared with the prior-year quarter, to EUR 0.2 billion, and the EBITDA margin, now just under 22 percent, improved by more than eight percentage points over the same interval.

T-Mobile Austria
T-Mobile Austria saw its subscriber numbers fall by just under 120,000 in the first quarter of 2002, leaving a total just below the two-million level. This is due to a streamlining of the customer base, particularly in the prepay segment. The company's market share was over 33 percent.

The net revenues of EUR 0.25 billion reported by T-Mobile Austria were roughly at the level attained in the prior-year period.

T-Mobile Austria's EBITDA, on the other hand, climbed by more than 30 percent year on year to reach EUR 77 million. The EBITDA margin, including the Niemeyer distribution channel, was eight percentage points higher than in the first quarter of 2001 at more than 30 percent.

T-Mobile in the Czech Republic
In the first quarter of 2002, T-Mobile in the Czech Republic took its customer base past the three-million mark for the first time, achieving a net addition of more than 180,000 subscribers. Over 21 percent of the net additions were contract customers, compared with just 7 percent in the prior-year period.

Net revenues came to EUR 0.16 billion, and EBITDA rose to EUR 77 million to give an EBITDA margin of more than 47 percent. With its market share of about 41 percent, Radiomobil is well ahead of its nearest rivals as the Czech Republic's second-largest mobile telephony provider.

Key performance indicators for the T-Mobile International Group, 1st quarter 2002 (TMO financials include consolidation effects)

Key performance indicators for the T-Mobile International Group, 1st quarter 2002  
(TMO financials include consolidation effects)

Customers (thousands) Q1/01 Q1/02 Growth Growth (%)
TMO Group 31,9171) 46,307 14,390 45.1
T-Mobile Deutschland 20,858 23,038 2,180 10.5
T-Mobile UK 8,981 10,750 1,769 19.7
T-Mobile Austria 2,078 1,985 —93 —4.5
T-Mobile in the Czech Rep.2) 2,074 3,033 959 46.2
VoiceStream3) 5,498 7,501 2,003 36.4
 
Net revenues (€ millions) Q1/01 Q1/02 Growth Growth (%)
TMO Group 2,681 4,465 1,784 66.5
T-Mobile Deutschland 1,658 1,796 138 8.3
T-Mobile UK 774 920 146 18.7
T-Mobile Austria 259 254 —5 —1.9
T-Mobile in the Czech Rep.2) 163
VoiceStream3) 1,357
 
EBITDA (€ millions) Q1/01 Q1/02 Growth Growth (%)
TMO Group 589 1,2114) 622 105.6
T-Mobile Deutschland 444 735 291 65.5
T-Mobile UK 101 199 98 97.0
T-Mobile Austria 59 77 18 30.5
T-Mobile in the Czech Rep.2) 77
VoiceStream3) 106

1) Excludes Radiomobil (Czech Republic) and VoiceStream (together with Powertel)

2) RadioMobil was first consolidated effective April 1, 2001; financial results are reported in accordance with German GAAP

3) VoiceStream (including Powertel) was first consolidated effective June 1, 2001; financial results are reported in accordance with German GAAP

4) Includes a one-time extraordinary effect totaling EUR 47 million resulting from Media One's sale of its Westel stake to Matav.

SACs Q1/01 Q1/02 Growth Growth (%)
TMO Group5) 120.1 113.1 —7.1 —5.8
T-Mobile Deutschland 133.9 96.3 —37.6 —28.1
T-Mobile UK 90.46) 157.5 67.1 74.2
T-Mobile Austria 111.7 72.3 —39.4 —35.3
T-Mobile in the Czech Rep.7) 33.8
VoiceStream8) 234.0

ARPU Q1/01 Q1/02 Growth Growth (%)
TMO Group5) 24.7 24.8 0.1 0.4
T-Mobile Deutschland 24.3 23.2 —1.1 —4.5
T-Mobile UK 25.16) 27.7 2.6 10.4
T-Mobile Austria 26.8 28.4 1.6 6.0
T-Mobile in the Czech Rep.7) 14.4
VoiceStream8) 51.5

Churn rate (%) Q1/01 Q1/02 Growth Growth (%)
TMO Group 1.5 2.2 0.8
T-Mobile Deutschland 0.8 1.6 0.8
T-Mobile UK 1.5 2.0 0.5
T-Mobile Austria 1.6 3.6 2.0
T-Mobile in the Czech Rep. 0.4 0.7 0.3
VoiceStream 4.3 4.4 0.1

5) TMO Group excluding VoiceStream (together with Powertel) and Radiomobil

6) KPIs include Virgin Mobile subscribers

7) RadioMobil was first consolidated effective April 1, 2001; financial results are reported in accordance with German GAAP

8) VoiceStream (including Powertel) was first consolidated effective June 1, 2001; financial results are reported in accordance with German GAAP

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