T-Mobile US Reports Fourth Quarter and Full-Year 2014 Results

2014 Delivers the Biggest Year of Net Customer Additions in Company History

Preliminary Full Year 2014 Customer Highlights:

• 8.3 million total net customer additions
• 4.9 million branded postpaid net customer additions
• 4.0 million branded postpaid phone net customer additions
• 265 million people now covered by the nation’s fastest 4G LTE network

Preliminary Fourth Quarter 2014 Customer Highlights:

• 2.1 million total net customer additions
• 1.3 million branded postpaid net customer additions
• 1.0 million branded postpaid phone net customer additions
• 266,000 branded prepaid net customer additions

T-Mobile US today provided a preliminary view of key customer results for the fourth quarter of 2014, once again demonstrating the strength of the momentum and positive customer response to its Un-carrier initiatives.

“We continued to take share from our competitors and attracted 8.3 million net customers in 2014 who were looking for value, simplicity and transparency,” said John Legere, President and CEO of T-Mobile.

“While my competitors are hiding behind less valuable connected device subscriber additions and managing profit expectations to the downside, T-Mobile delivered over 2.1 million customers in Q4, while managing the balance between growth and profitability. Needless to say, 2014 was a record breaking year.”

Preliminary Fourth Quarter 2014 Customer Results

In the fourth quarter, T-Mobile added 2.1 million net customers. This was the seventh quarter in a row that the Company has generated more than 1 million net customer additions. For the full-year 2014, T-Mobile added 8.3 million net customers, an 89% increase from the prior year.

T-Mobile also reported ongoing strength with respect to its branded postpaid customers in the fourth quarter of 2014. Branded postpaid net customer additions were 1.3 million, which represents a 47% improvement compared to the fourth quarter of 2013. Branded postpaid phone net additions were over 1.0 million. For the full-year 2014, the Company reported branded postpaid net customer additions of 4.9 million, significantly above the revised guidance for branded postpaid net customer additions of 4.3 and 4.7 million provided in connection with the third quarter of 2014 earnings.

Branded prepaid net customer additions in the fourth quarter of 2014 were 266,000. Year-over-year, the improved performance was due to the continued strength of the MetroPCS brand.

The strength of T-Mobile’s customer proposition is also reflected in the postpaid porting ratios with the Company attracting customers at an overall ratio of 2.1 to 1.0 versus the competition for full-year 2014. For the fourth quarter of 2014, T-Mobile saw positive postpaid porting ratios of 1.4 versus Verizon, 1.8 versus AT&T, and 2.2 versus Sprint. These strong porting trends have continued at similar levels into the new year. Simply put, T-Mobile continues to take share from each of the three other national carriers.

“Porting ratios have been in our favor vs. the competition for seven consecutive quarters and it looks like we will continue to beat everyone on total postpaid phone adds as well,” continued Legere.

“We are not slowing down, and customers know it. Just a few weeks ago we unveiled Un-carrier™ 8.0, introducing Data Stash™ with 10GB free LTE data to qualifying Simple Choice™ customers. Now we are the only national provider to let you roll over your unused high-speed data. Clearly customers are seeing through the tricks and the confusion that the other guys offer and coming to T-Mobile for our solutions.”

Wholesale net customer additions in the fourth quarter of 2014 were 586,000, compared to 555,000 in the third quarter of 2014 and 664,000 in the fourth quarter of 2013. Machine to Machine (M2M) net customer additions were 152,000 and Mobile Virtual Network Operator (MVNO) net customer additions were 434,000.

T-Mobile’s 4G LTE network, the nation’s fastest based on download speed tests, now covers 265 million people. Wideband LTE is available in 121 metro areas, including most recently New York City. The Company has started deploying its 700 MHz A-Block low-band spectrum with service launched in Washington, DC, Minneapolis, Colorado Springs, and Cleveland. In total, T-Mobile owns or has agreements to own 700 MHz A-Block spectrum covering nearly 190 million people.

America’s Un-carrier plans to share more details and its full financial results for fourth quarter and full-year 2014 later in February.

Preliminary Customer Results

The following table sets forth the number of ending customers:
[table style=”table-striped”]

		As of												% Change
(in thousands)		December 31, 2014 (1)				September 30, 2014				December 31, 2013				Qtr/Qtr				Year/Year
Customers, end of period
Branded postpaid phone customers		25,844				24,807				21,797				4.2	%			18.6	%
Branded postpaid mobile broadband customers		1,341				1,102				502				21.7	%			NM
Total branded postpaid customers		27,185				25,909				22,299				4.9	%			21.9	%
Branded prepaid customers		16,316				16,050				15,072				1.7	%			8.3	%
Total branded customers		43,501				41,959				37,371				3.7	%			16.4	%
M2M customers		4,421				4,269				3,602				3.6	%			22.7	%
MVNO customers		7,096				6,662				5,711				6.5	%			24.3	%
Total wholesale customers		11,517				10,931				9,313				5.4	%			23.7	%
Total customers, end of period		55,018				52,890				46,684				4.0	%			17.9	%
NM – Not meaningful.

[/table]
The following table sets forth the number of net customer additions on a pro forma combined basis:
[table style=”table-striped”]

			Three Months Ended			% Change								Year Ended								% Change
(in thousands)			December 31, 2014 (1)			September 30, 2014			December 31, 2013			Qtr/Qtr				Year/Year				2014 (1)				2013 (2)				2014 vs 2013
Net customer additions
Branded postpaid phone customers			1,037			1,175			800			(11.7	)%			29.6	%			4,047				1,938				NM
Branded postpaid mobile broadband customers			239			204			69			17.2	%			NM				839				68				NM
Total branded postpaid customers			1,276			1,379			869			(7.5	)%			46.8	%			4,886				2,006				NM
Branded prepaid customers			266			411			112			(35.3	)%			NM				1,244				359				NM
Total branded customers			1,542			1,790			981			(13.9	)%			57.2	%			6,130				2,365				NM
M2M customers			152			222			172			(31.5	)%			(11.6	)%			819				512				60.0	%
MVNO customers			434			333			492			30.3	%			(11.8	)%			1,385				1,531				(9.5	)%
Total wholesale customers			586			555			664			5.6	%			(11.7	)%			2,204				2,043				7.9	%
Total net customer additions			2,128			2,345			1,645			(9.3	)%			29.4	%			8,334				4,408				89.1	%
NM – Not meaningful.

[/table]
[table style=”table-striped”]

(1)		The Company’s customer results for the fourth quarter and full year of 2014 are preliminary and subject to completion of the Company’s year-end closing review procedures. Full fourth quarter results are expected to be released later in February.
(2)		For comparability purposes, the year ended 2013 results above represent T-Mobile USA and MetroPCS on a pro forma combined basis as if the business combination had occurred at the beginning of 2013.

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