T-Mobile US Reports First Quarter 2014 Results and Best Ever Quarterly Performance in Branded Postpaid Net Customer Additions

  T-Mobile US Reports First Quarter 2014 Results and Best Ever Quarterly
  Performance in Branded Postpaid Net Customer Additions

 2.4 million total net customer additions including over 1.3 million branded
                       postpaid net customer additions

Business Wire

BELLEVUE, Wash. -- May 1, 2014

T-Mobile US, Inc. (NYSE: TMUS):

First Quarter 2014 Highlights:

  *Total net additions of 2.4 million, marking the first quarter ever with
    more than 2 million net additions
  *Fourth consecutive quarter with over 1 million total net additions, now
    the fastest growing wireless company
  *Total branded net additions of 1.8 million including branded postpaid net
    additions of over 1.3 million
  *Total branded prepaid customer growth with 465,000 net additions
  *Record low branded postpaid churn of 1.5%, down 20 basis points
    sequentially and down 40 basis points YoY
  *Fourth consecutive quarter of pro forma sequential service revenue growth
    and a return to service revenue growth YoY on a pro forma combined basis
  *Adjusted EBITDA of $1.1 billion, down 12.2% sequentially due to the impact
    of significant acceleration in customer growth
  *Branded postpaid ARPU of $50.01, down 1.4% sequentially compared to a 2.9%
    decline in the prior quarter

T-Mobile US, Inc. (NYSE: TMUS) today reported first quarter 2014 results
demonstrating continued strong momentum and record customer response to its
Un-carrier moves. The Company has aggressively focused on eliminating consumer
pain points and is delivering continued growth in its total and branded
customer base through the successful execution of this strategy. In the first
quarter, T-Mobile captured virtually all of the industry phone growth, while
successfully taking market share from the competition.

T-Mobile reported 2.4 million total net customer additions with 1.8 million
total branded net customer additions for the quarter, including branded
postpaid net additions of 1.3 million and branded prepaid net additions of
465,000. T-Mobile was once again the fastest growing wireless company in
America in the first quarter of 2014 with more than 1.2 million branded
postpaid phone net additions, a result that dramatically outperformed the
competition. The strong branded postpaid net addition performance resulted
from continued momentum in gross additions, which were up 23%
quarter-over-quarter and 136% year-over-year, and ongoing improvements in
branded postpaid churn, which was 1.5% in the quarter, down 20 basis points
quarter-over-quarter and down 40 basis points year-over-year.

“A year ago I promised that we would bring change to what I called this
arrogant US wireless industry. We are delivering on that promise and our
results reflect the growing customer revolution that we’ve ignited,” said John
Legere, President and CEO of T-Mobile. “We are now approaching 50 million
customers, added 2.4 million net new customers in the first quarter alone, and
posted our fourth quarter of consecutive service revenue growth, while once
again adding more net new postpaid customers than the rest of the industry
combined!”

Executing on the Un-Carrier strategy to drive results:
T-Mobile’s Un-carrier moves have ushered in a consumer revolution, giving
consumers a stronger voice since the roll out began in March 2013. The
Company’s key Un-carrier initiatives were as follows:

  *On March 26, 2013, the Company announced its radically simplified
    unlimited “Simple Choice” service plan with no annual service contract.
    Device financing with the Equipment Installment Plan (EIP) provides
    qualifying customers with low out-of-pocket costs on some of the most
    popular devices available in the US wireless industry. As of the end of
    the first quarter of 2014, 75% of T-Mobile’s branded postpaid base was on
    Simple Choice/Value plans.
  *On July 10, 2013, the Company unveiled JUMP!™, a groundbreaking approach
    to more frequent phone upgrades. T-Mobile had more than 5.3 million
    customers enrolled in JUMP! at the end of the first quarter of 2014.
  *On October 9, 2013, the Company announced that it would make “the world
    your network – at no extra charge” - with unlimited data and texting
    worldwide in 100+ countries for Simple Choice customers. At the same time,
    T-Mobile announced that it had delivered nationwide 4G LTE in 233 metro
    areas covering 202 million people. Since then, Simple Choice with global
    data has expanded to 121 countries and destinations and 4G LTE coverage
    has increased to 284 metro areas covering more than 220 million people.
  *On October 23, 2013, the Company un-leashed tablets and revolutionized how
    customers buy and use tablets with free data for life. Customers can
    receive 200 MB of free data every month with any compatible tablet for as
    long as they own and use the registered device on T-Mobile’s network. In
    the first quarter of 2014, T-Mobile had 67,000 mobile broadband branded
    postpaid net additions, principally composed of tablets, compared to
    69,000 in the fourth quarter of 2013.
  *On January 8, 2014, the Company announced that it would reimburse Early
    Termination Fees (ETFs) for individuals and families who make the switch
    to T-Mobile and trade in an eligible device. The plan also offers a
    trade-in value for customers’ phones. This program has seen unprecedented
    customer uptake with approximately 21% of branded postpaid gross adds
    taking the ETF offer in the first quarter of 2014.
  *In April 2014, the Company introduced 3 new programs - “Simple Starter,”
    “Tablet Freedom,” and “Overage Freedom” – that make our service plans and
    devices even more affordable, and we have eliminated all domestic overage
    charges for consumers, even those on legacy plans.

Operational and Financial Highlights for the First Quarter of 2014
T-Mobile ended the first quarter of 2014 with approximately 49.1 million
customers, an increase of 2.4 million total customers from the end of the
fourth quarter of 2013. T-Mobile significantly grew its total branded customer
base, with 1.8 million net customer additions during the quarter. Branded
postpaid net customer additions of 1.3 million, including more than 1.2
million phone net additions, continued the strong momentum seen in the
previous three quarters, reflecting continued low branded postpaid churn and
significantly higher gross additions. The Company’s network modernization
program and strong execution of its Un-carrier strategy contributed to a
record low branded postpaid churn rate of approximately 1.5% for the first
quarter of 2014, down 20 basis points versus the fourth quarter of 2013 and an
improvement of 40 basis points compared to the first quarter of 2013. The
branded prepaid business exhibited improved customer growth with 465,000
branded prepaid net customer additions in the first quarter of 2014, driven by
the success of MetroPCS and growth in the 30 expansion markets launched in
2013.

During the first quarter of 2014, the quality of T-Mobile’s customer base and
receivables portfolio continued to improve as a result of the implementation
of its Un-carrier strategy and the effect of credit tightening over the past
two years. Service bad debt expense in the first quarter of 2014 was down 3%
year-over-year and was down 13% quarter-over-quarter. 53% of EIP receivables
were classified as Prime at the end of the first quarter of 2014, compared to
44% at the end of the first quarter of 2013 and 54% at the end of the fourth
quarter of 2013. The slight sequential decline in EIP receivables classified
as Prime was due to seasonal factors, most notably the tax season cash effect
which drove a slight change in customer mix.

Total revenues for the first quarter of 2014 increased by 47.0%
year-over-year, principally due to the inclusion of MetroPCS results in the
first quarter of 2014. On a pro forma combined basis, total revenues for the
first quarter of 2014 increased 15.3% year-over-year due to higher equipment
sales and growth in service revenues. Total smartphone sales, including sales
to branded postpaid and prepaid customers, were a record 6.9 million units in
the first quarter of 2014, equivalent to 92% of total units sold, up from 91%
in the fourth quarter of 2013. This represents a penetration of 81% of the
total branded customer base at the end of the first quarter of 2014, up from
79% at the end of the fourth quarter of 2013. On a sequential basis, total
revenues increased by 0.7% primarily due to growth in service revenues. The
portion of branded postpaid customers on Value or Simple Choice plans was 75%
at the end of the first quarter of 2014, up from 69% at the end of the fourth
quarter of 2013.

Service revenues for the first quarter of 2014 grew by 33.3% year-over-year
primarily due to the inclusion of MetroPCS results for the full quarter.
Service revenues increased by 3.3% quarter-over-quarter primarily due to
growth of the Company’s customer base, offset in part by increased adoption of
Value and Simple Choice plans, which have lower monthly service charges than
traditional bundled plans. T-Mobile’s service revenues have grown in each of
the last four quarters on a sequential basis. On a pro forma combined basis,
service revenues for the first quarter of 2014 increased 4.5% year-over-year.
This represents a significant improvement over the fourth quarter of 2013,
when service revenues declined by 1.1% year-over-year on a pro forma combined
basis, and marks a return to year-over-year service revenue growth.

Branded postpaid average revenue per user (ARPU) decreased
quarter-over-quarter by $0.69 or 1.4% to $50.01, an improvement compared to
the quarter-over-quarter decline of 2.9% in the fourth quarter of 2013.
Branded postpaid ARPU again declined on a year-over-year basis due to the
increased adoption of Value and Simple Choice plans. However, the
year-over-year decline in branded postpaid ARPU of 7.5% did show an
improvement compared to the year-over-year decline of 8.6% in the fourth
quarter of 2013. Branded postpaid Average Billings per User (ABPU), which
consists of branded postpaid service revenues plus EIP billings divided by the
average branded postpaid customers in the period, was $59.54 in the first
quarter of 2014, up 3.9% compared to the first quarter of 2013 and up 1.3%
compared to the fourth quarter of 2013. Branded prepaid ARPU for the first
quarter of 2014 increased by $0.25 or 0.7% to $36.09 compared to the fourth
quarter of 2013.

Adjusted EBITDA for the first quarter of 2014 was $1.1 billion, a 12.2%
decline from the fourth quarter of 2013, reflecting increased equipment sales
due to the significant acceleration in customer growth and the success of the
Un-carrier 4.0 – Contract Freedom offer. Adjusted EBITDA margin was 20%
compared to 24% in the fourth quarter of 2013.

Cash capital expenditures for the first quarter of 2014 were $947 million, up
from $882 million in the fourth quarter of 2013 but down from $1.2 billion on
a pro forma combined basis in the first quarter of 2013. Cash capital
expenditures reflect T-Mobile’s continued investment in network modernization
and 4G LTE deployment.

MetroPCS Combination
T-Mobile has continued to make rapid progress on the expansion and integration
of MetroPCS. On July 25, 2013, the Company announced the strategic expansion
of the MetroPCS brand with the planned launch of 15 new geographic markets. On
November 21, 2013 the Company launched the MetroPCS brand in 15 further
markets, bringing the total of expansion markets to 30. As of March 31, 2014,
the Company has opened nearly 2,200 distribution points in these new markets.

The Company began selling T-Mobile-compatible devices to MetroPCS customers in
the second quarter of 2013 through MetroPCS branded distribution points and
has already transitioned approximately 53% of MetroPCS customers to the
T-Mobile network. More than 50% of the MetroPCS spectrum has been re-farmed
and integrated into the T-Mobile network at the end of the first quarter of
2014.

2014 Outlook Guidance
T-Mobile expects to drive further momentum while continuing to invest in
profitable growth. With the success of our Simple Choice plan and the
continued evolution of the Un-carrier strategy, branded postpaid net additions
for 2014 are now expected to be between 2.8 and 3.3 million.

For the full year of 2014, T-Mobile now expects Adjusted EBITDA to be in the
range of $5.6 to $5.8 billion.

Cash capital expenditures are expected to be in the range of $4.3 to $4.6
billion.

With this growth and rate plan migrations, the penetration of Value/Simple
Choice plans in the branded postpaid base is projected to be between 85% and
90% by the end of 2014.

Quarterly Financial Results
For more details on T-Mobile’s first quarter 2014 financial results, including
its “Investor Quarterly” with detailed financial tables and the required
non-GAAP reconciliations, please visit T-Mobile US, Inc.'s Investor Relations
website at http://investor.T-Mobile.com.

For comparison purposes, pro forma combined measures presented in this release
include the combined results of T-Mobile USA and MetroPCS to reflect the
business combination for the relevant periods. See Investor Quarterly for
further details.

About T-Mobile US, Inc.:
As America's Un-carrier, T-Mobile US, Inc. (NYSE: "TMUS") is redefining the
way consumers and businesses buy wireless services through leading product and
service innovation. The Company's advanced nationwide 4G and 4G LTE network
delivers outstanding wireless experiences for customers who are unwilling to
compromise on quality and value. Based in Bellevue, Washington, T-Mobile US
provides services through its subsidiaries and operates its flagship brands,
T-Mobile and MetroPCS. It currently serves approximately 49.1 million wireless
customers and provides products and services through approximately 70,000
total points of distribution, including approximately 8,000 T-Mobile and
MetroPCS branded locations and 62,000 third-party and national retailer
locations, as well as distribution through our websites. For more information,
please visit http://www.t-mobile.com.

Q1 2014 Earnings Conference Call
T-Mobile US, Inc. will host a conference call to discuss its financial and
operational results for the first quarter 2014 on Thursday, May 1, 2014 at
9:00 a.m. Eastern Time (ET).

 T-Mobile Conference Call Information:
  Call-in Numbers:        800-432-9830
  International:           719-234-7318
  Participant Passcode:    1767693
                           

Please plan on accessing the conference call ten minutes prior to the
scheduled start time. The conference call will be broadcast live via the
Company's Investor Relations website at http://investor.t-mobile.com.

A replay of the conference call will be available for two weeks starting
shortly after the call concludes and can be accessed by dialing 888-203-1112
(toll free) or 719-457-0820 (international). The passcode required to listen
to the replay is 1767693.

Forward-Looking Statements
This news release includes "forward-looking statements" within the meaning of
the U.S. federal securities laws. Any statements made herein that are not
statements of historical fact, including statements aboutT-Mobile US,
Inc.'splans, outlook, beliefs, opinion, projections, guidance, strategy,
integration of MetroPCS, expected network modernization and other
advancements, are forward-looking statements. Generally, forward-looking
statements may be identified by words such as "anticipate," "expect,"
"suggests," "plan," “project,” "believe," "intend," "estimates," "targets,"
"views," "may," "will," "forecast," and other similar expressions. The
forward-looking statements speak only as of the date made, are based on
current assumptions and expectations, and involve a number of risks and
uncertainties. Important factors that could affect future results and cause
those results to differ materially from those expressed in the forward-looking
statements include, among others, the following: our ability to compete in the
highly competitive U.S. wireless telecommunications industry; adverse
conditions in the U.S. and international economies and markets; significant
capital commitments and the capital expenditures required to effect our
business plan; our ability to adapt to future changes in technology, enhance
existing offerings, and introduce new offerings to address customers' changing
demands; changes in legal and regulatory requirements, including any change or
increase in restrictions on our ability to operate our network; our ability to
successfully maintain and improve our network, and the possibility of
incurring additional costs in doing so; major equipment failures; severe
weather conditions or other force majeure events; and other risks described in
our filings with theSecurities and Exchange Commission, including those
described in our Annual Report on Form 10-K filed with theSecurities and
Exchange CommissiononFebruary 25, 2014. You should not place undue reliance
on these forward-looking statements. We do not undertake to update
forward-looking statements, whether as a result of new information, future
events or otherwise, except as required by law.

Contact:

T-Mobile US, Inc.
Press Contact:
Media Relations
mediarelations@t-mobile.com
http://newsroom.t-mobile.com
or
Investor Relations Contact:
Nils Paellmann
877-281-TMUS or 212-358-3210
investor.relations@t-mobile.com
http://investor.t-mobile.com
 
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