uploads///Telecom T Mobile Q Postpaid ARPU

Why T-Mobile Expects Stable Revenue Growth

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May. 28 2018, Updated 7:30 a.m. ET

T-Mobile’s average revenue per user

In this part of the series, we’ll look at T-Mobile’s (TMUS) postpaid phone ARPU (average revenue per user) trends over the last few quarters. In the first quarter, T-Mobile’s branded postpaid phone ARPU fell ~1.8% YoY (year-over-year) to $46.66. According to the company, this YoY reduction was mainly due to “a decrease in regulatory program revenues with the continued adoption of T-Mobile ONE tax inclusive plans, promotions targeting families and new segments, lower insurance program revenue per subscriber, and the negative impact of the new revenue recognition standard of $0.22.” Excluding the effects of new revenue accounting standards, T-Mobile expects its postpaid phone ARPU to be stable this year.

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T-Mobile’s ABPU

In the first quarter, T-Mobile’s postpaid ABPU (or average billing per user) fell ~2.8% YoY to $60.14 from $61.89, mainly due to lower lease revenue and reduced postpaid phone ARPU.

ABPU comprises postpaid customers’ installment payments and service revenue. These installment billings are categorized as equipment revenue. Installment billings and service revenue are stable revenue sources for 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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