T-Mobile US Inc. majority owner Deutsche Telekom AG said the U.S. company's contribution to its first-quarter net revenue fell 5.9%, or €1.2 billion lower to €8.46 billion, as unfavorable exchange rate effects weighed on its performance.
"Our very strong operational performance was severely diminished by the translation of our U.S. dollar figures into euros," Deutsche Telekom CEO Timotheus Höttges said during a May 9 call, noting "this is something on which we have no influence."
Currency swings turned what would have been a 3.1% increase in organic revenue based on the exchange rate during the prior-year quarter into a reported decline of 3.9%, Höttges added.
T-Mobile US, which accounts for 47.3% of the German telecoms giant's total revenue, saw its EBITDA contribution decline 2.3% to €2.33 billion on the back of the exchange rate of the U.S. dollar to the euro declining by about 15% year on year.
Höttges said the negative impact on adjusted EBITDA amounted to more than 300 million euros.
Despite this, Deutsche Telekom raised its guidance for adjusted EBITDA for full year 2018 from around €23.2 billion to around €23.3 billion on the back of T-Mobile's stronger outlook.
Revenue for the first quarter at T-Mobile grew 8.7% year over year to $10.4 billion, with adjusted EBITDA up 12.8% to $2.9 billion. It gained 1.4 million new customers between January and March 2018, growing its customer base to a total of 74 million at the end of the reporting period.
Deutsche Telekom now expects T-Mobile to deliver postpaid net customer additions of 2.6 million to 3.3 million for the current year, revised up from the previously projected 2.0 million to 3.0 million net additions.
The carrier is the subject of a recently announced merger with SoftBank Group Corp.-owned Sprint Corp. for a total implied enterprise value of $59 billion for Sprint and $146 billion for the combined company.
