Please activate JavaScript!
Please install Adobe Flash Player, click here for download

Deutsche Telekom AG - Interim Group report - January 1 to March 31, 2012

21Interim Group management report 283,000 net prepay customer additions in the first quarter of 2011. The significant improvement in net branded prepay customer additions in the first quarter of 2012 was due primarily to the success of unlimited Monthly 4G prepay plans. Additionally, MVNO customer growth continued to be strong, as total MVNO customers increased to 3.8 million at March 31, 2012. T-Mobile USA’s blended churn decreased to an average of 3.3 percent per month in the first quarter of 2012, compared to an average of 3.4 percent per month in the first quarter of 2011. The year-on-year decrease in blended churn was due primarily to lower branded churn from a change in the mix of T-Mobile USA’s product portfolio and the continued strategic focus on churn reduction. Development of operations. Q1  2012  millions of € Q1 2011 millions of € Change millions of € Change % FY 2011 millions of € Total revenue 3,847 3,770 77 2.0 14,811 Profit (loss) from operations (EBIT) 344 401 (57) (14.2) (710) EBIT margin % 8.9 10.6 (4.8) Depreciation, amortization and impairment losses (561) (463) (98) (21.2) (4,407) EBITDA 905 864 41 4.7 3,697 Special factors affecting EBITDA (78) (7) (71) n.a. (134) EBITDA (adjusted for special factors) 983 871 112 12.9 3,831 EBITDA margin (adjusted for special factors) % 25.6 23.1 25.9 Cash capex (571) (546) (25) (4.6) (1,963) Total revenue. Total revenue at the United States operating segment (T-Mobile USA) in the first quarter of 2012 increased by 2.0 percent compared to the first quarter of 2011, due to fluctuations in the currency exchange rate. In U.S. dollars, revenues of T-MobileUSAdeclinedby2.3percentyear-on-yearprimarilyduetothedecrease in T-Mobile USA branded customers (total customers excluding MVNO and machine-to-machine) resulting in service revenue declines. Service revenues declined due to lower subscription revenues, but were partially offset by strong growth in data revenues from customers using smartphones with mobile broadband data plans. In U.S. dollars, data revenues increased by 10.0 percent inthefirstquarterof2012comparedtothefirstquarterof2011duetoincreased smartphone data plan adoption. Additionally, equipment sales increased 11.8 percent due to handset program changes in connection with T-Mobile USA’s unlimited Value plans, which were launched in the third quarter of 2011. Due to the increase in equipment sales, total revenues in U.S. dollars declined less than service revenues. EBITDA, adjusted EBITDA. Adjusted EBITDA increased in the first quarter of 2012 by 12.9 percent to EUR 983 million compared to EUR 871 million in the first quarter of 2011. Adjusted EBITDA for the first quarter of 2012 excludes EUR 78 million in expenses associated with organizational restructuring initiatives and the terminated AT&T acquisition of T-Mobile USA. In U.S. dollars, adjusted EBITDAincreasedby8.0percentprimarilyduetolowerequipmentsubsidies in connection with handset program changes from T-Mobile USA’s unlimited Valueplansandlowerequipmentunitsalesvolumes.Additionally,theeffects of ongoing cost management programs in the first quarter of 2012 helped control expense growth. This decline in costs was offset in part due to higher bad debt expense related to certain customer groups. Adjusted EBITDA mar- gin increased year-on-year due to proportionally higher increases in adjusted EBITDA than in revenues. EBIT. Despite the factors described above, EBIT declined by 14.2 percent to EUR 344 million in the first quarter of 2012 from EUR 401 million in the first quarter of 2011, in particular due to higher network depreciation in connection with the build-out of the network. Additionally, depreciation expense was lower in the first quarter of 2011 due to the discontinuation of depreciation and amortization (EUR 0.1 billion, IFRS 5) in connection with the held-for-sale classification of T-Mobile USA’s non-current assets in relation to the terminated sale to AT&T. Cash capex. Cash capex increased 4,6 percent year-on-year to EUR 571 million in the first quarter of 2012 compared to EUR 546 million in the first quarter of 2011. In U.S. dollars, cash capex remained consistent year-on-year with higher incurred capex related to the anticipated network modernization partially offset by pay- ment timing differences. In the first quarter of 2012, T-Mobile USA announced that it will invest USD 4 billion in total to strengthen its 4G network, including the planned launch of LTE technology in 2013. Expenditures in the first quarter of 2012 were due in part to these network modernization efforts. As of the end of the first quarter of 2012, more than 220 million Americans now have access to T-Mobile USA’s 4G mobile broadband network, offering increased network capacity and reliability.