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T-Mobile UK Half Year Financial Results
Strong customer growth. Stronger profitability growth

  • Customers up 19.2% to 14.9 million
  • Revenues up 5% to £1.5 billion
  • Adjusted EBITDA up 35% to £505 million
  • Adjusted EBITDA margin 33.5%
  • Blended ARPU up £1 to £21
  • Non-voice revenues now 17% of ARPU

London, Thursday 12 August, 2004:

As part of Deutsche Telekom’s publication of its financial results for the half year 2004, T-Mobile UK today announced strong first half results, with a good performance on all key indicators and strong growth in profitability.

Brian McBride, Managing Director of T-Mobile UK, said:
“T-Mobile UK continues to show strong performance all round, consolidating the growth achieved in Q1. We’ve added over 1.2 million, including Virgin Mobile customers, growing our total customer base by almost 20 % to over 14.9 million since the end of June last year.

“Revenues grew by 5% to £1.5 billion with average monthly customer revenue up £1 and average monthly churn of 1.6 percent. Adjusted EBITDA increased 35% to £505 million, and our adjusted EBITDA margin is now above 30%.

“T-Mobile was the clear growth leader in terms of net new customers which places us in a solid position for the rest of the year despite an increasingly competitive market place.”


Financial Results Overview (unaudited)
 

 

GBP

 

Q1/04

Q2/04

Q2/03

% y.o.y.

HY 1 / 04

HY 1 / 03

% y.o.y

Q1/04

Q2/04

Q2/03

% y.o.y

HY 1 / 04

HY 1 / 03

% y.o.y

Net revenues (million)

1133

1108

1060

4,5

2241

2096

6,9

771

739

744

-0,7

1510

1437

5,1

EBITDA (million)

385

365

267

36,7

750

545

37,6

262

243

187

29,9

505

373

35,4

EBITDA margin

34,0%

32,9

25,2

7,7 ppt

33,5

26,0

7,5 ppt

 

 

 

 

 

 

 

SAC

143

136

125

8,8

140

141

-0,7

97

91

87

4,6

94

96

-2,1

 - contract

325

289

325

-11,1

306

350

-12,6

221

193

228

-15,4

206

239

-13,8

 - prepay

43

39

26

50,0

41

30

36,7

20

26

18

44,4

28

21

33,3

ARPU

31

31

29

6,9

31

29

6,9

21

21

21

0

21

20

5,0

 - contract

65

69

62

11,3

67

63

6,3

44

46

44

4,5

45

43

4,7

 - pre-pay

18

17

19

-10,5

18

18

0

12

11

13

-15,4

12

13

-7,7

Non-Voice % of ARPU

17%

17%

16%

1 ppt

17%

16%

1 ppt

 

 

 

 

 

 

 

Capex¹ (million)

66

91

93

-2,2

157

151

4,0

45

60

65

-7,7

105

104

1,0

1) Investments in property, plant and equipment and intangible assets (excl. goodwill and licenses)
 

Million

Q1/04

Q2/04

Q2/03

% y.o.y

HY 1 / 04

HY 1 / 03

% y.o.y

Subscribers¹
(end of period) million

14343

14899

12500

19,2

14899

12500

19,2

 - contract

2743

2858

2400

19,1

2858

2400

19,1

 - pre-pay¹

11600

12041

10100

19,2

12041

10100

19,2

Net adds¹ ‘000

707

556

287

93,7

1263

53

n.m.

 - contract

59

114

60

90,0

173

151

14,6

 - prepay¹

648

441

227

94,3

1089

-98

n.m.

Average monthly churn

1.2%

1,9%

2,2%

-0,3 ppt

1,6%

3,2%

-1,6 ppt

1) Including Virgin Mobile

T-Mobile UK had a strong first half, with customers, including Virgin Mobile up over 19% since the same period last year, and similarly up 19% from Q2’03 to Q2’04.

Revenues were up 5% to £1.5 billion million. Adjusted EBITDA was up 35% to £505 million with an adjusted EBITDA margin of 33.5%. EBITDA was £555 million due to subsequent proceeds from the sale of Virgin Mobile.

Growth was driven by a rising customer base, focus on cost control and profitability, and the benefits of the new commercial arrangement with Virgin Mobile and a one-off non recurrence of liabilities in the first quarter.


T-Mobile was the fastest growing UK network adding 1.2 million net new customers, over 650,000 of these being added by the T-Mobile branded network.

T-Mobile UK’s customer base remains largely pre-pay, split 2.9 million contract and 12 million pre-pay. Net contract additions were 173,000 for the first half of the year and 114,000 for the quarter. In pre-pay, T-Mobile was the clear growth leader with 1.1 million net additions for the half year (including Virgin Mobile) and 441, 000 for the quarter.

Contract ARPU grew by £2 to £45 per month. Within this, non voice revenues were 17% of ARPU, driven by a focus on music and entertainment.

T-Mobile leads the mobile industry in Wireless LAN (WiFi), with approximately 6,000 HotSpots across the group, and plans aggressively to expand this number as part of T-Mobile's strategy to deliver integrated 3G and WiFi networks. The number of T-Mobile WiFi HotSpot locations across the UK is expected to grow exponentially by the end of the year.

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