uploads///Telecom T Mobile Q Postpaid ARPU

Evaluating Trends in T-Mobile’s Average Revenue per User

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T-Mobile’s average revenue per user

In this part of the series, we’ll look at T-Mobile’s (TMUS) postpaid phone average revenue per user (or ARPU). The inclusion of taxes and fees at existing price points dilutes the company’s ARPU. In 2Q17, T-Mobile’s branded postpaid phone ARPU fell ~0.2% year-over-year (or YoY) to reach $47.01. 

During its 2Q17 earnings conference call, T-Mobile’s CFO, Braxton Carter, stated, “ARPU was impacted by the continued migration to T-Mobile ONE including taxes and fees, the impacts of promotions and the successful launch of DIGITS.” 

The carrier’s management expects stable ARPU growth from 2016 to 2017 because dilution from the inclusion of taxes and fees would be offset by the accretion in ARPU that the carrier saw with T-Mobile ONE.

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T-Mobile’s average billing per user

T-Mobile’s postpaid average billing per user (or ABPU) was $60.40 in 2Q17, down ~2.4% from $61.89 in 1Q17. This metric was down ~3.5% from $62.59 in 2Q16. This decline in T-Mobile’s postpaid ABPU was due to the decrease in lease revenues as well as growth in the branded postpaid mobile broadband subscriber base with lower ARPU.

ABPU comprises installment payments made by postpaid subscribers as well as service revenues. These installment billings are labeled as equipment revenues.

Installment billings and service revenues are stable revenue sources for major US wireless carrier Verizon (VZ), T-Mobile, Sprint (S), and AT&T (T). T-Mobile’s JUMP! installment plan is similar to AT&T’s Next plan and Verizon’s Device Payment Plan.

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