T-Mobile Expects Stable Postpaid Phone Revenue Growth This Year

This year, T-Mobile (TMUS) expects its branded postpaid phone ARPU (average revenue per user) to be stable YoY (year-over-year). In the fourth quarter, its branded postpaid phone ARPU fell ~0.2% YoY to $46.29, mainly due to the growing success of new customer segments and rate plans such as T-Mobile ONE Military, T-Mobile ONE Unlimited 55+, and T-Mobile for Business, and a decline in some non-recurring charges. The ARPU reduction was partially offset by a net decrease in promotional activities and higher insurance revenue.

In the fourth quarter, T-Mobile reported that its branded postpaid ABPU (average billing per user) fell YoY to $57.66 from $59.88, primarily due to “growth in the branded postpaid other customer base, which has a lower ARPU than branded postpaid phones.” Postpaid ABPU includes service revenue and installment payments made by customers for equipment.

T-Mobile stock has risen 11.1% year-to-date and 8.6% in the last year, but has fallen 2.3% in the last five trading days. In comparison, peers Verizon (VZ), Sprint (S), and AT&T (T) have returned 15.3%, 14.9%, and -19.3%, respectively, in the last year.