8-KOther Events

T-Mobile US, Inc. 8-K Report, Corporate Update (Sep 20, 2016)

Filed September 20, 2016For Securities:TMUSTMUSZTMUSITMUSL

Summary

T-Mobile US, Inc. (TMUS) has provided a preliminary update on its third-quarter 2016 customer growth trends and switching performance. The company indicated an improvement in overall industry postpaid porting ratios compared to the second quarter, with positive net additions coming from each of the three major wireless competitors. This suggests a more favorable competitive environment for T-Mobile's "Un-carrier" initiatives. The preliminary figures show strong customer acquisition, with approximately 650,000 prepaid net customer additions and an estimated 753,000 T-Mobile branded postpaid phone net customer additions quarter-to-date. It is important to note that the postpaid phone net customer additions figure is presented on a pro forma basis, excluding the impact of certain co-branded customers due to a transaction that closed on September 1, 2016. Under this agreement, T-Mobile sold marketing and distribution rights for these customers to an MVNO partner, and they will now be reported as wholesale customers. The preliminary results exclude approximately 47,000 net customer deactivations for these specific co-branded customers up to September 1, 2016. T-Mobile reiterated its commitment to its previously issued financial guidance and full-year outlook, with a comprehensive update expected in late October with its Q3 2016 earnings report. Investors should be aware that these results are preliminary and subject to change after the company completes its quarter-end closing procedures.

Key Highlights

  • 1T-Mobile US reported improving industry postpaid porting ratios quarter-over-quarter.
  • 2The company experienced positive net customer additions from each of its three major wireless competitors.
  • 3Preliminary Q3 2016 figures show approximately 650,000 prepaid net customer additions.
  • 4Preliminary Q3 2016 figures show approximately 753,000 T-Mobile branded postpaid phone net customer additions (pro forma).
  • 5The postpaid phone net additions exclude certain co-branded customers from a transaction completed September 1, 2016.
  • 6These co-branded customers are now reported as wholesale customers.
  • 7T-Mobile reiterated its commitment to existing financial guidance and full-year outlook.

Frequently Asked Questions

The "pro forma" nature of the 753,000 T-Mobile branded postpaid phone net customer additions means this figure has been adjusted to exclude the impact of certain co-branded customers. This adjustment is due to a transaction where T-Mobile sold marketing and distribution rights for these specific customers to an MVNO partner, effective September 1, 2016. These customers will be reported as wholesale going forward, hence their exclusion from the branded net additions.

No, these customer results are preliminary. The company stated that the figures are subject to completion of its quarter-end closing review procedures and may vary from the final reported numbers in their Q3 2016 earnings report, which is expected in late October.

No, T-Mobile reiterated its commitment to its current financial guidance and full-year outlook. A complete update on their growth outlook for 2016 will be provided with the Q3 2016 earnings report.

The sale of marketing and distribution rights for certain T-Mobile co-branded customers to an MVNO partner means that these customers will no longer be counted as part of T-Mobile's branded postpaid phone net customer additions. Instead, they will be reported as wholesale customers from September 1, 2016, onwards. This affects the comparability of year-over-year or quarter-over-quarter branded customer growth metrics if not properly understood.