TMUS - Earnings call transcript Q2 2018

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Operator

Good afternoon. Welcome to the T-Mobile US Second Quarter 2018 Earnings Call.

Following opening remarks, the earnings call will be opened for questions via the conference line, Twitter, Facebook or text message. [Operator Instructions] I would now like to turn the conference over to Mr. Nils Paellmann, Head of Investor Relations for T-Mobile US. sir. ahead, go Please

Nils Paellmann

our very With to Legere, me our Braxton Mike you the members XXXX leadership senior our second earnings Sievert, team. Carter, COO; and call. today President and much. thank other our of Welcome quarter CEO; CFO; Yes, are John

actual proposed make the receive about read and financial our the set materially the page are the Results GAAP subject will operating results and Reconciliations risk the this on with of benefit expectations and of uncertainty include and in to outside forth quarterly that merger Quarterly of XX-Q. results, call, during me significant our non-GAAP of our statements found other in beliefs on to the our current Such projections reports risk including results are plans, we and future Form website. from expect Relations historical Let factors control not management between and we Investor the the upon statements section our statements disclaimer, annual cause forward-looking this Sprint and statements be based our report that Form are XX-K our that call to can facts. discuss on differ we could

merger, the In important matters. contains related that become XX, we and addition, information a yet has on and transaction on statement about with in SX the Form filed Sprint, registration connection effective. July proposed The with statement not the T-Mobile registration SEC

over John me it turn with let to that, So, Legere.

John Legere

you and Welcome live second Twitter to coming earnings everyone. XXXX T-Mobile call afternoon good to Okay, from Bellevue, Washington. conference quarter

cover. to results incredible have We

churn. XXth ever hitting we and details. phone best just We branded posted revenues are can record into the industry also phone quarter me jump QX postpaid give record the we in a Let highs Service then and EBITDA posted led postpaid row. low for you adjusted in headlines growth our just the and the and

just in XXX quarters recognized to was Verizon extending in only with score network as last area the well and OpenSignal even industry streak network XX metro RootMetrics measurement a play by T-Mobile’s awards, Verizon’s pay in gave leading And of speeds, week report LTE winning their Our some love XG routes AT&T. row. and second ahead service Ookla our favorite to

Our needs retail and delivering guidance are increased the In more expect is continues experience shows to half by our value year. the setting incredible T-Mobile customer maintain second that of we care of customers level into for standard a teams this in nutshell, meet and the and that the of to results. performance customer translating

decade faster captured two than of competitor into three score customers, a dive thirds extending X.X second you're and a half we grew over let's streak million. grew row to with postpaid That's added XXX,XXX two sequentially than quarters postpaid combined than X at the industry's additions, more net our quarter. about net times total Sprint, AT&T, than and Comcast. And So million times home. With growth, faster Comcast more year year. XX faster We in than winning our closest fantastic Verizon, next we more keeping branded our and if phone phone nearly

who slowing we're So says down.

of military, business, porting in been gains this acceleration segments. postpaid than say quarter, QX recently in did most two. ratios. XX+, as postpaid one. has was the in reflected second April the X.XX two under our on by most segments growth our driven particular such year. X.XX Our strong against focus and ratio and both was I AT&T of geographies, are higher to in underappreciated continued This penetrated Yes, one and new share ratio last X.XX, from postpaid porting also QX up The porting In Verizon overall in

strong had Watch. postpaid strong of also growth the million, particularly additions branded Apple by supported of X net wearables, continued We

before. are blew customers postpaid away phone most ever our even had XX the we churn branded This staying of estimates below year net lowest ever X%. churn our In basis QX, longer year. and competitive was flat branded points than over Our X.XX%, came market. quarter first the ever at over additions analysts year customer year bullish in with prepaid down activity despite in increased XX,XXX, And

another over year income were up year fully record a strong billion, Our record our EPS as diluted a at $X.X in was to over grew $X.X which X% as year Adjusted high. amounted adjusted just year margin. revenues and solid XX% by financial year billion XX% year up over Service with X% EBITDA $X.X high Net came at EBITDA customer to $X.XX. results. billion, results was

continuing megahertz Now deployment way to deploying continue megahertz a pace. XXX cities in in GX XG with deployment XXX deployed turning megahertz million Galaxy update. first SX capable smartphones by XXX virtually And complete expand will now software Samsung XXX In launched now our capable. we XXX POPs which aggressively already followed XXX be our and network are now as to dozen live today. we XXX XXX and and to Including the industry is we the We a band XXX LG and our gear towns And the we states our megahertz megahertz was we a LTE, XXX upgradable June. XX coverage in improve performance. ThinQ in of million POPs March, are We have our market phones, XG to million that smartphone, have flagship megahertz continue to these low spectrum leading network, year band low well furious at rollout with spectrum with cover to on end. by

for to ready cities the be XXXX. will plan simultaneously for in in utilize and and Dallas, nationwide XXX This continues LA, megahertz XXXX. to XXXX network XG XX Vegas, first in XG be and to with York, connectivity coming coverage bring New starting XG Our harness with smartphones XG Las dual will will bandwidth

the and actual five XG for report winning quarter T-Mobile row also for now. Open billions state availability, LTE network. report mobile seven download per average networks already of As place Verizon XG I a marks we with QX Like world you released our speeds of first just tests speed that I test of analyzed ahead fastest continue LTE the XG industry. speed competitors. real In cleaned millions what is categories me from lead mentioned, and confirm T-Mobile’s XX.X which mobile again hear download Signal in published once data their second, all was outright tied megabits to mentioned points our earlier, QX, up users, upload of T-Mobile Ookla the know, of well and XX their can

front and low account. retails setting easier care simplifying customer to of making Our calls join experience. it switching experience the line making for is is easy by driving in serve experts per the team standard to record our Digitally in T-Mobile accelerated customers it

that Our guidance QX means we increasing strong XXXX record are for and again. momentum our

Our for customer X million EBITDA net additions $XX.X outlook adjusted $XX.X now calls to million billion billion. branded and to of X.X postpaid

end CAGR now estimate for free guidance cash remains expected billion. high X.X three-year range cash XX% of X.X at Our flow the billion to CapEx be to the at to of XX% with

progress give me brief of with also update merger the Let our on you a Sprint. pending

the of and number will regulatory grant this in still significant process, competitive a approval. optimistic are that confident combination have of we the pro and regulatory approval remaining steps we recognize benefits While regulators

will public non-binding Senate antitrust, is nationwide note; interest this filed with rights. our policy, T-Mobile notice Judiciary On the it all opportunity Un-carrier that, and Subcommittee on think front new to bringing statement the deep the of the competition FCC fast broad out and American XX, transaction clear A I XXX-day super and that and milestones On possible. made had and consumer consumer starting to Americans charging the we create FCC on merger top increase June Claure jobs. June as clock. on I in pro July few about The put of about Marcello XX and its XG as testify to public their was XX. competition

XX. with Monday, was SX FCC preliminary Our on the filed July

how to good So we're and the this forward for making the for and be great will consumers merger country. story look continuing good tell about to progress

Isn't Let away. this up can't handing before industry speculation just you one that begin. our is next it let talk time mention shake and Okay, at it I again? say XX. move wait I'll more in leave two weeks August to thing. just things Un-carrier about over, me let industry, shaking to me on we that all

Braxton a closer CFO Carter Braxton, the take our results look. Okay, through details take financial our the of and let's will guidance. us

Braxton Carter

This I'm operating Net Net expense, amounted income thanks, XXX quarter over income, reimbursements income at the reform. so million, XX% impact year and expense XX to also to interest excited recognition from XX T-Mobile. benefited to was here the lower positive fantastic a due another and and continued for due new John, impacts. on of the of up report tax in revenue to million tax higher benefit after-tax lower year. insurance Hey, standard included from hurricane million

the impact build higher net lease with network. XX was out and due the associated QX the of sequential Sprint of was in a and costs hand, further On income merger. other X.X% by expansion income increased impacted after-tax impacted from to net depreciation million the by basis, On our depreciation also which

million and points revenues EBITDA. XXX standard. for still amounted in with a and cash the as sold. to revenue Note of just standard rapid from in XX billion, adjusted or expect in postpaid cash a accordingly. percentage million, XXX QX strong half in net and percentage Please XX sequentially of recognition last flow note million XX insurance the amounted from impact reflection related that performance XX% in XX the associated of drag services provided from million cost transactions. to XXX the increased price XXX EBITDA of net number securitization hurricanes in of and million was just a proceeds upgrade flow a of of the QX added in up by and of higher the half Also of in also XX XXX QX. versus XX million first losses basis the a million which prior service megahertz X.X from driven is occurred year's in a revenue of income year by increase with into recognition decreased basis included X.X% the are which to operating net in by EBITDA of grew included XX by that was second sequential Cost connection significant to million light positive This year X.X% growth. QX. despite SG&A this points merger adjusted XX% due decreased increased adjusted to impact over of and to XX billion. increase securitization continue revenue the million excludes sequentially XX% costs hurricanes that decrease the increase as positive lease X% the million year. in free from adjusted We proceeds Sprint activities of a depreciation a a service the The in impact this new new XX% by trend increase excluded the CapEx cash from purchase XXXX. EBITDA of revenue devices deferred X.X despite and our year Adjusted to the Free sequentially by services despite rollout Equipment acceleration and rate management. by net cash cost cash to The reimbursements in

was XXX year, proved targeting new plans. fairly X.X% promotions CapEx sequentially the continued offset Branded with over loaded phone XX.XX, T-Mobile of our reflecting the quarter of year, second ARPU postpaid segments, last at impact and in year in As of impact X.X% ONE by rollout. rate resilient positive accelerated front-end our adoption the megahertz down connection

generally impact For whole, standard. the we to the recognition revenue from be continue ARPU year new the to a expect as excluding stable

the a X.XX% expense In is or results higher Do in up customer the low usually bad so seasonal to our Total a receivables significantly we of half revenues low were terms sequential for second not expense pick million losses second even outstanding. XXXX customer the a do bad of total industry, XXX in of million of quarter in of second quality, QX were expect debt X.XX% year. our note record for that with a base. XXX quarter compared or and the debt from sell

volumes million and we've Now balance and we guidance, quarters growth seen strategy expect pursuit growth to to adjacencies. switcher up customer lower from range branded X takes of This be our net postpaid our let's X.X X.X get the profitability, on million, XXXX million in million. prior to guidance into between the of and additions account X.X guidance long-term the recent

sequential second of takes uptick the will the expected in account the year. seasonal also typical occur postpaid in guidance which into churn Our half

revenue into X.X which to to per another of of driving year. in low targeted standard XXX to compared up recognition We standard, of be in revenue guidance of increase the billion, million as expected from megahertz range guidance billion expect XX.X our band services billion all-in build at takes in EBITDA an billion communicated of expected of the including adjusted at XXX XXX XX.X to decline billion but recognition the beginning new for the revenues year to spectrum account not EBITDA billion XXXX, million XX.X by an the range to will of X.X up prior This cost well the guidance impact including The new out still billion. XX.X accelerated XX.X by in of billion. adjusted million range the new that's leasing to XXX XXXX spectrum XXX million million we XXX as we to rollout XX.X

range Our for adjusted both CapEx demonstrates We prior in guidance years. excluding are we interest. end we're includes following cash now Note postpaid his XXX the massive team prior Neville increased this net for XG XXXX megahertz to ranges at approach with increased having high and to now X.X capitalized deployment. in the regard clearing year. the we to guidance, branded for the have additions success our the come target X.X Updated that of of billion expenditures expect that same billion that and spectrum. EBITDA for twice This from outlook given guidance

free of flow to from full-year expect XX% three-year XXXX we from unchanged at range. to XX% prior XXXX CAGR cash Finally, to increase the a full-year

by X% period, During of an operating provided to net the we to increase net the expect XX%. unchanged cash at same activities underlying CAGR

forward. free emphasize cash inflows me from Let our going that material guidance net does not securitizations flow cash assume any

Before years. we certain of not regarding with you standalone disclosure for information outlook including revenue our qualifications recognition a basis become of get what current standard merger effective briefly to pro address in disclosures the does conservative the combined for the projections, on We case, contains Sprint. the not your call questions, and and we The the on encourage prepared impacts to is to the financial and quarter. which additional it SX as SX. described been financial is SX transaction the view for include discuss the in the the our necessarily subject the SX have let read to SX The the The today's SX reflects preliminary in yet and purpose upcoming believe me the information. forma has not second prospective

earnings. you focus So questions I’d on that our ask your

start let's message, Now, to a get Facebook. Operator, text or can first with you question Twitter your on questions We'll via questions, ask question the phone. phone, via please. or

Operator

with Rollins from question comes first Mike our Citi. And

Mike Rollins

Thanks.

engagement on questions promotions you some the in what rights? you you side. little strength, gross significant vertical And been for customers talk Netflix mentioned this XX+ like can if Can know the of in the maybe cohort what differences a gave Thanks you're couple So promotion? about quarter churn military some more seeing or the but seeing that ads you're any benefit vertical I about then much. Are who you of bit the you could, in have the talk very promotions? seeing bundling from first

John Legere

a Mike? think day first Mike, of that's the best. time. question It’s best I all of

Mike Sievert

you. unlimited can’t and a XX+ Unfortunately, under responding. probably would just we're And very few business it little The offer have proud in of also months showing military They're that that is They're you audiences of. it's ago out as appreciated a and looking our color, quantitatively market new is launched going we really been this This you would for. color audiences great. going Michael, gangbusters that bit been suspect. probably the I we've is for give unpack where under somebody very but indexed,

they've been So nice contributors.

We highest nice the been in ever enterprise successes business enterprises the our that’s markets been and sector favorable. quarter, thing in more board markets. across activations Another larger last has this business churn is where public say contributor a more the successes

things have churn. churn the case. lowest one was important our this well. in to out ever you out markets of was lower that for question the turn to that quarter our it Netflix, your And taking business those about do the it is yeah, business unpack as except we So, and it for last much advantage to that say, that case be yes, can’t too of it does are panning And

John Legere

gotten seen. aspects to very to be going And experience American business what two that's of itself feel customer forward, been day have basis is, network started that day. has don't better I the care has forward say segments we investments expansion four just to perform we quarters we on been we're most every growth getting to I’m also glad that I about think more never better you parts looking things the not on to and know focus including where network able now, is to a And we forward. the our the team, going never ago. experience the in of matched network to a very that think care of that that were the going one a up are secondly, a on quarter recognized. ever I geographic or Mike, way thought going the us provide be to We after three those the day but it has not course network. And growth environment do of I point quarter exciting and in about our bullish one in would around the

Mike Rollins

can comments I up your incremental and want just the follow regulatory conversations team engagement are over side; to the last the months few audience on the some that that has there today? management in If on you’d regulators learning your share had with with

John Legere

these the that competition, the the continuous see whole not been together that a I eye. we've regulatory that pro-America, especially received. I has been keep pleased where with story many learning you would learnings, that But good been confident continue XG a we're are why been say day multiple if and the of we why playing capabilities. that pro-consumer, we're as that I aspects with this well process, very, makes has associated story should in processes the that to we've know, that necessarily Sprint critical very story committed story aspects we respect deployment groups and to have But it's we working story people and they tell from say process the as for this pro-competition, we're very we the new all in associated will country, And to the one say greatly together a coming very it's wouldn't is going, we tremendous public with this something we and is for story together approved. a very can feel with the deal that against competing it's as is why be is from the on that providing to to sense telling very companies and we're of coming details with need that two telling a and the in is

Mike Rollins

you. Thank

John Legere

various one in go know, to I’ll those on as in are through well. my to coming and two going the peers and operator the that to we��ll another question take phone, the I that questions various go or questions you but IR we’re pick if, Operator, TMUS sites pause the on one, here from ask

next we’ll the operator question on take phone. So, the

Operator

Feldman Goldman Our Sachs. next from Brett question comes with

Brett Feldman

Obviously It growth, moving look some guys service driven, the another winning up industry. revenue was show does in quarter growth, a by customers. peers like of their doing you are it some it service is case, your where of but revenue to strong pricing bit started still feeling better in the ARPU

sort get a on bit was And below people make share keeping trade-off to between service so can out pay well that value more the to versus customer thoughts you figuring the you sure could peers Thanks. maybe growth. more ways to to your of your higher get drive I hoping pricing for

John Legere

X% go free haven't that we X% increase from seen cash Let's are from peers is just top-line line. make cash we revenue driving to the remembering our of competitors in mostly are something our of going and sure attempting and EBITDA this driving operations any the think in kind business revenue. that question peers, a standpoint into that service certainly flow break growth, that's in our part And a in. of I growth of zero that I

the to with talk we’re I'm the very doing way ARPU. can we're but about and Braxton maybe pleased what it how both So differentiation Mike of cash, and driving all

Mike Sievert

up these customers buy all-time offers churn which advantage contributing, for so A We and included, into business fees fully taxes about quarter, It's more unlimited a generally for lot our ARPU these up But move us taking deciding we're example, to it's customers choice with and other prices ONE, ONE beat that something but is what example, to add-on our which from legacy, of that's of, ago, things. of from a on to unfold, simple important. our to package great T-Mobile of us. so. consensus are stack is from is were T-Mobile cases like value we and deciding things choosing stable able our offset have and buying our to terrific the by Plus, record and customers or deepen their that's X.X% features ARPU that happening developments year we were what's a and people this that's offer, we offer has customers seeing not seeing to what value about just the do relationships with

more more with because serious needs more experience we’re choosing because people buying and up partly stack. relationships the proactively needs, prime they're consumers, families, customers deepen to more our the have So and that's suburban their serious attracting they're with network, they're having wireless us our on

John Legere

of changes got Yeah. the doing of pockets you with things, couple customers. and add me they're of Administrative a existing huge screwing some dive of a that part that of trajectory happening what's just And the taking deep there ARPU customer. fees remember you're when by really to and these the it let out competitors, are you've

gets the exciting create has know with in last T-Mobile the we a the when the very strategy how philosophy, permutations value. and a lot can that's to we of run And create will that slightly more by the our be over terminal that it, that’s that the that we're business in future stable scale we that our could benefits formed model generally capacity of all way the that's shareholder the a been years. You and two place in value bring manage new of the way we balanced we're we just network do network we ARPU, do unlocking been here going we're doing basis the and and it down with that to a situation has which can competition on standalone and with the that's we're really all business

Mike Sievert

That's XX% go quarter, had, use back we we've this about decline in an customers the since a EBITDA expansion significant the in the experience can price, a not XXXX, The data but they our carrier also have that XX-fold history. go to started moves, margin. if with in increase just but you EBITDA you and our enjoyed back

the times greater. as many three customers have with five we customers, data. employees, even as customer base. way, and our many use and the have more MetroPCS MetroPCS, plans, greater priced by than the their history is twice of and as And enjoyed acquired Since they've times merged XX% MetroPCS various we lower XX-fold markets between they we amount XX% of than many and gotten data Our in rest cover plans

of be will together lower the click when you this of we're will to the cost have, going will ahead clearly and significant to in while be available we'll that's definitely decrease prices, where capacity when service and So coming prices, up, drive go about able can the what beneficiary in expansion competition customers expand structure. significant profitability we're that see with Sprint talking offerings to because you

that's proved new past. It's as the our We’ve our plan it. going forward T-Mobile. as in game into the plan well So game

Operator

Simon next Flannery Our Stanley. comes Morgan question from with

Simon Flannery

in John, the do see TV model take wondering, was the and ability carrier update beyond on if adjacencies, I what I you the think about Braxton, offerings? could on your you us but to current LayerX talked you

John Legere

you for with, don’t the we thinking through industry LayerX, segue maybe want, not in into, for why start what T-Mobile, country? just LayerX why you Mike, about on what critical it's we're update new and can you the and TV but and

Mike Sievert

see Well, as this ever when we there carrier said, was a on if lot a acquisition we needs we be that, the is of and opportunity. market announced of that LayerX, one to

that developing the opposed fueled media that and to have a and your test They're bed, the have life companies We’re doing simultaneously to and program down, product customers a in few tired social things. needs. we a what intend market TV island you're because a lot your systems see sick you that live we Number outdated lot one, we in of guides them have that our while your product, and represents connected bring firsts to heads kind as have bringing going been the expanding to of outdated of quietly of their legacy mobile as cable with technology that highly phones. these

do So about what can there. we're really we excited

no because a broadband, to broadband where the like unfold, unprecedented breadth intend new into because network to XG interesting that's in but literally even we offering years, the the to choose will fantastic that those We XX we the of of in-home the huge of today, what market, because in just depth to and What's plunge be really we the the is have who choose crazy, offer don't million continue do because sudden, market Americans really network the the half few into initial a launch you and component to now, the Once with is benefits idea doing interesting better it uncompetitive. the or which our one way, XXXX, we'll in but first company an broadband What's swaths the when customers TV job. it. high during broadband, competition this speed not that, simply this think us team's network today over network us, offering on the it competition offering this about T-Mobile. of offer a the the and connections parts -- back our bring top like during year, see by and interesting XG can today mobile of has zero offering we become is That's new went LayerX and of our broadband will even price all to of starts We TV opportunity have plan offers. broadband could as a more XG the of definition of for of the it's in heads you're market.

in-broadband future connected the any their example for is announced that's the a there what's new learnings, when transaction. be about people T-Mobile. country have value happening is think about so industry see piece until what I'm will underserved what by importantly, very And XXXX, greater that So than XXXX, we XXX and the and a announcements broadband, think the in question and America XX%. realize of since megabits. of to them you I the XX various speeds but XX that really driving megabit they're of home and was greater XXXX, recently the happening of cable have distribution with industry segment, context giving, you haven't of rural see, watching big in exciting can the in with our that broadband opportunity Amongst for XX% And that two-thirds than access that we'll will you is it the CP the get -- one by things the when we speed, in previously of than XX% to you covered with if the new greater you'll out get megs, have the T-Mobile,

XX we what and us these wireless what like double clicked will is what's Now, to through customers come be things the close network people things, I to greater in impact home yet think get broadband don't people be certainly XXX, to bring XXX that really other going players network its and happens that's megabits by be, to don't to XX% because in out them speeds where thought when on capabilities America and think areas. at hot a with rural amongst big XXXX learning, expect to the serve on going of the have with in will are million have XX% and I

Simon Flannery

gigs in that And several you customer can per support hundred environment?

Mike Sievert

Neville? right. That's

Neville Ray

Yeah.

gig complement future X.X on or So Bill’s XXX skinny foundational is megahertz. not to mid-band, question, few millimeter wave

I which think same a FCC too, Dano participate along spectrum wave the millimeter you is had from question upcoming Fierce will auction. Mike here lines, in

can I most think been probably company the high. quick, all that we the that think spectrum and vocal don't would claim I globally we've XG, be around or disputed mid real for So in it be low, bands need for

standardization. and happening about across And mid, so And across technical we've the had was the one obviously, and high different that That's used XX XG that today, than XX a regulatory environments the ago. months with talks to lot in community discussion low a bands. being about everybody passion of

something thing. on realize, So several their are good work the and actions challenges midband to on ’XX. in auctions in and the maybe millimeter that's process transaction currently and interest a look to efforts T-Mobile. wave the especially participating in but years for this CBRS with the material forward that that's to wave, and And about into There's have to have take we're the Spectrum, C-Band auctions work encouraged and through be FCC millimeter that's doing planned year to FCC like transaction going or C-Band. with auctions on we that on the obviously we of pending participating -- timing at us yes, interest this in We're with sure, Sprint by those keen very We later for year. of

the mid when priority I and all CBRS decade. a across continue we be XG to band other for probably think some C-Band key next bands, yeah, opportunities, to of look But it’s from so. the going will a us and And perspective, be into ‘XX. at then

John Legere

are to the made you're way, very the -- we from covering a beginning. that we've Neville, clear is great so end, the interested I think yes, that topic going

there's but the on to It's in network depth nation attacks and also believing create. T-Mobile us needs the T-Mobile’s of from nothing is competitors XG. coverage not the I that through you with that get spectrum what the said And standalone in what with kind that millimeter a band wave we and the is are drive interest we'll something report, in millimeter component world strategy importantly, just truly need our of confuse with very not is standpoint the put wave our FCC deliver way of our We can a for a have driving portfolio we've we're for wave to to new some millimeter this work portfolio. place breadth the very you and XG. interested have XG to And can we in that clearly that of X.X, we low say Sprint’s one with processes would high. what we have something never it in is a and the the of ahead

four hot spectrum in three never have and of with met spots good yet and wave, get that this you needs the we’ll wasn't purely some country deep, by deploying, already question this be this not is network spectrum broad along millimeter something or kind but has but what We that's nationwide in. interested any on by he that locations, way Neville planet geographic

operator. okay, So

Operator

with We will our Chaplin Research. Street New question next from Jonathan take

Jonathan Chaplin

one First for Carter. Braxton

drag, a, where else of capital free What in of than are guidance of, CapEx hasn't is for EBITDA XXXX terms or higher in a be XXXX you've the guidance step-up sort anticipating and taken you free cash unchanged. flow something in suggest would is that flow twice, CapEx, You've shouldn't changed cash working it guidance guided?

John Legere

cash I just stop is three have XX% XX% be celebrate moment Yes. why a for you on something you're going to out a which before. and just meager year want should flow, we that explaining to free CAGR point to

Braxton Carter

we but And probably the no did And releases question, the CapEx. even really had press cash great at is clearing of earlier end that the the have we're that's there that of Jonathan, high range the in we actually have signaled the a function spectrum. some at to CapEx being of change what you to on team tremendous cash and that is be guidance. Neville guidance our seen success up flow very and guidance with changes going his cash high change end, and broadcaster the relating free

meet missed we've for we years the numbers as don't and flows much thesis we will we've know confident guidance, And success got they trend CFO five forward couple you When to really is for we and that here get our is have investment model. in couple of significantly based guidance business, we excited that year, tremendous is up we the ’XX, been a be do. we've we're what how we cash to we that we million the run a know T-Mobile. of highly never in will the mess, a look very, that's handle kind to going or substantial outperform way really going momentum, a years, what of the about we in creation Cash we're out you place know path gets year-end all You because were publicly say hundred generation to talked call. ramping in inching the connection achieve last value very with the over ultimately there which up step provide a at EBITDA, and the the of our what is reflection me CapEx, ’XX over when of look

Jonathan Chaplin

Mike. a industry adds quick market, driving saturated any and maybe what as what it. a thoughts would a Can I for We've I as follow-up be in huge pretty seen surge John to with could for one in net think of

John Legere

some One the A subsector than prepaid couple -- softening past thing that's seeing but some cases a been quarter, you're and other, the Jonathan one months, in devices, and transference a to necessarily not six quarter, this in prepaid was past in of it's by years, all economy. partly of trend things. so phone over is other due driven that's over the the strong there's trend it

than are people more ago is take you people qualifying financing qualify a happening qualifying device and when that of for it deals they for. a postpaid, now postpaid these because they or can what's So they're want year were for two lot

in been part healthy I least for the at trend a So that's driven the by think it's industry economy. and

doesn't something past in tell of XX But not are submitted XX over ideas do two you go discussed. a question, be or Walt is doing know to and to bid. ever just questions. that think would inappropriate for will minutes, tongue XX the There be not able we it the wave Sprint weeks, the what able move to is, will a it couple we're have we Before we to need see it not the yes, we Piecyk note next can't that doesn't coordinate do in XG which be ten was is, than cheek, to to participate Walt, would which assume you the next it's and was be we're said the carrier going one. I more if it I any but would the things, them, would we bids just however, has unsaid, in crowdsourcing auction, inappropriate, question, of you next highly in right auction, approximately also millimeter be coordinate to mean them and

hope XX that So I'm two poking them fun were keep just others sure somewhat are in. but there, humorous, to your next question? free feel watching. questions, are but you not if to Operator of They’re the typing me, those

Operator

Phil question with next Cusick Morgan. JP our from take will We

Phil Cusick

launched go years, that launched what with the in markets new performance you sort of couple but in Maybe the for Mike, does in are you’ve the distribution geographies where I in and the can are few and that next come terms of talk know we years? they've last about where in cohorts, of

Mike Sievert

Yeah.

team little in ahead which got there's been about see, more. up a Americans accomplished. and point, what we've back couple of we'd that's piece tailwinds Greenfield into become for a in count predicted been share overall just the ago. to pent a gave that the it predictions we've we retail that to and is, XXX T-Mobile. grow that's So what they a and to a make seen That positive affording seeing sign couple of to us. and on where see our demand expansion One line is this you retail markets about we're is said years were hit We've addressed see that. I you fleet headwinds of do we things. with retail take our we And geographic particularly we has markets you is big think immediately for we We addressing million years John's for when management and had and a leadership, million would XXX footprint of Americans, couple example look of expansion entered What a that in what great great sure potential actions have a by gone

fleet retail our So been has highly productive.

retail great like areas, a we're also As a because expansion expanding into any additional our address rural way smaller towns, result, going to concentrate we're that's fleet some to areas, of Greenfield towns. smaller trucks

urban emboldened when we've became America's need on we've found it, been that's an by expansion just we of out penetration retail us it that generally now, some more you we don't important also predicted that the and right paying the retailer flip year like of learning But in tell I'll side that penetration predicted we urban you for got areas, in for ’XX speaking, in that this last we've fastest and markets growing as the well. you the So retail is we for launched would. results. what

Phil Cusick

your sort penetration XXX you versus top Can POPs markets in talk about million penetration? those of

Mike Sievert

really. Not

because three way But different. are again, brand before That's in two we're very all quite penetrations. new never markets mid-single results, markets nice these quarters, are the may some but digit the it's Some or existed to of where just vary your we’re in by see. seeing these cases, small, results --

John Legere

growth that I that So piece the that this we expansion adjacency up even under combine in that in and with And a the channel. you're Mike threw still across us business the talking that years steroids Mike important the tremendous up we really we have just from take think, opportunity. With other is US confidence that on just onto of earlier, channel. really geographical what there extreme incredible growth we're when Sprint, about gives stats excited multiple earlier future of and of growth these confidence high indexed areas. going we're but We're those about seeing momentum two tremendously have is was some

Phil Cusick

back if for we pretty typical follow-up, a increase Maybe a pretty ad can postpaid in or conservatism. the watches either but headwind or is big happening I half, should just guidance implies see, it the look was slowdown in in that there to nice is anything tablets this

John Legere

guidance. we do know the how You

I Bill the where you've growth actually year think is increased fourth asked Ho earlier, question this every or the fifth your guidance quarter.

and we to the it I really think that's the stop as see take fifth the execute throughout nothing year. we We trend. going year up it’s

the that the we're the marketplace guidance change way So, in really we're providing to of year. back no for optimistic really half and the

Mike Sievert

launches of and it's of conservative, half Maybe of our some we've one the launches. from haven't I those competitive couple time last predict of competitors seen phone in every degree this higher back hard to we've surprised will moves. that we during seen happen say really is sense, what by years, been reasons do big a -- year a big year phone the contains, of and the we the because that's because but in little uncertainty the some

plays we're So, the we to will year very see feeling confident. out, how but have

John Legere

show important as said our it's commentary that about intended guidance change the to coming a think good the of feel we in very year. off we rest record I the is QX, But,

John Legere

all when about you tablet actually you take. the that done that to I strategy with really who in look game We've think that really give never think did I button heavily. and or it game well other happened up carriers played being We finally, pretty tablet out never tablets. space, what's XXX,XXX, play the to the played XXX,XXX connected at And consistently We've juice generate asked pushed really growth.

Mike Sievert

so operator. going of you’re the questions next we're Phil, as asking Walt, verge question, as on Okay. many to the to go

Operator

from We’ll Moffett Moffett next question take our Craig Nathanson. with

Craig Moffett

guess. I putting bit. to statement, to things talk to Neville can of as so if obviously work the a interest about that Sprint gigahertz lot I’m just struggles, other about to you look question differently network, different make wondering X.X you the X.X done entity you more put just have In resources you that A are what's Sprint strategy the could can seem its revealed that back do think or a combined spectrum what densify that to having there work. financial spectrum than for important public

Neville Ray

with to the with T-Mobile’s combination If dense we’ve history you most even the hands MetroPCS, in more network and back think United the built recently States down.

has network talked have away look think struggle I footprints. from done less that others continue look AT&T you and who US, when band densification some, T-Mobile. network dense initial at in you at and today, low densifying Sprint cell, but and the status their most battle. about it's has Verizon the small macro,

will in we with the the can we do to that Sprint and this take next And key key X.X so combine sites gigahertz. to add T-Mobile difficult for and going very, be areas is with network suited capacity, what match that sites put to to and obviously level. very to it's And for would coverage transaction but network well incredibly others be down a primarily

because of today square else's than more for is even peg round network metro gig this X.X its I story. anybody So deployment our density. is mean hole suited

generate, think exciting combined spectrum offer what about it's blowing assets very when together and put lines layer and T-Mobile we Mike’s incremental and that right and capacity finally on T-Mobile right about put can the Sprint, of that a X.X about And mind so along statements going has. think you incredibly capability, the pretty architecture when it's can John the well a perform you the you we network that, capability the the you to with density, when

Craig Moffett

follow-on you Sorry, Spectrum. with sufficient about you’re propagation problems to just indoor about has issues, can Sprint talking talk is the propagation that for indoor that second, the the just that a to densification had solve

Mike Sievert

call, key urban pretty see We’ve areas, our I X.X strong mean, it's deploy Yes. band It today, most and of. you has need on but band you'd performance, mentioned strong on that low earlier the low networking mid Sprint to certainly important deep mid helps. includes building then, again. dense And you if a need good the those and band spectrum you band get the band gigahertz, you into XG in need layer costs, even X.X

right so statements the mean, of the network about also flawless architecture what layer plan with to I street, capability intent penetrate lay for Mike about us and not the if here that. here and just X.X macro you one made achieve home and absolutely layout on broadband And but down yes, gigahertz the can help think do, and is spectrum we can whole to a the the

John Legere

much techniques? to loyalty I T-Mobile haven't and answer talked want on We could for the teams customer have this the over that to question. just to is exceeded or continue to add new you the that. XX your churn. lower XX plan say Kyle, initiatives numbers, customer to that of minutes continuing timing under respects current was -- I’ll -- With does on tell about what. to you the thanks churn

X.X our some that's and rural time barrier churn network but the and should well business. the where of and and that core us the which in best the are things and are are and which but that AT&T’s. to so proud figuring caught Americans finally around the for in it T-Mobile taken our something your word is has an improving all that through drive together this of live And Number sustainable people Verizon's come There coverage of today teams piece, really more that the brand question is two just we who cylinders. and we T-Mobile mouth, differences square only our ever that is working the brand history our customers of mostly X.XX% miles and we that network churn be when right other a that second to and working are may improving realizing we feel will and We're up margins for the network this scores telling couple through bring none those this industry element to promoter think things and areas, ever and Americans delivered is two means to finally down. gets experiencing on yeah, all in out work, one, new together bust beaten create ever the the Kyle, bar it are an firing highest to next are. now is we've shows incredibly first that level people net Our about be

Operator

The with comes Amy questions from Macquarie. Yong next

Amy Yong

some and you Verizons? strategy you talk thoughts I but broadband, cities how then addressed on price point maybe competition your more which going comment timing, guess on selective about just size, market if on with far. Verizon obviously yours being they're compare and after, talking fixed bit but your following on Comcast’s in up about cable I could can a And on comment, strategy, a your opportunity, million early know maybe elaborate little XX thus you very wireless market might charter is

Mike Sievert

story justifying, mean of millimeter strategy kind their the isn't really a mobility that a wireless realizing with they're millimeter John because getting going standalone was as couple as homes. in Amy, they're it to A Yeah. fixed think, now talking about strategy I is of wave, so pivoting competition way quickly saying, as our and XG I wave, a things. of

just that what place and of new bring and the that's they're combination in country have So of two-thirds or big better allows broad home that's now doing not address doing, allow a to the and right broadband. and a of into about half be that's John what we're XG million and XXX a support that not this that country, market after going market needs us has us it's broadband type low, terabyte capacities and a month to sections the T-Mobile where going we're bring and spectrum, as types going second capacities network of megabits seen and of one XX% will get with that's service country but we very to level the a into to a mid in per markets market, to going building deep of a And three years industry like badly. said, so the we're what competition this use this we're is a where, high are very that customers XX competition to serious

Braxton Carter

always number mighty to on me, mean, task, passed That’s homes fascinating real the on wave in quick. but million a XX millimeter add XX is million just go Verizon at I I product. it one guys.

John Legere

Okay.

have because which think more the take question, I we ahead, go to for the I I’m hesitate on one but let's operator to time next phone looking question.

Operator

question We’ll Walt BTIG. take next Piecyk our with from

Walt Piecyk

actually I joking those wasn't John, coordination. about

for FCC any of I to think it, you're allowed do time, the you disclose presumably of but actually these upcoming ahead the if that's to it auctions not right. plan

John Legere

That’s not planned.

Walt Piecyk

happen sense the us think this going and might Got you when peers, your give promotions by to all you some of you us back XXXX guys are mean, in sense, upgrade for that a it. at and you product a of Can up a as rates whether your what give competitors. look you invert age I base, is or or down we can be you were exit year for your

John Legere

A it new couple of to what megahertz and adopt about in XXX that of going one you've the of also megahertz network, us One it's that, is the compatible because talk devices just things. not from and layer over phones. about over well, the is, get importance Walt really XXX see promotions, it's about our customers in thing you important heard we're

we have XXX XX experience touched behind far states we're a how in network, by obsessed customer in rolling need that because way in handsets going, know And out and this phones with hands. we see that already XXX so being may cities with getting Neville’s people's so, us fast technology to big you megahertz, get

when us you're pursuing XXX so phone. strategy see compatible especially megahertz upgrade that a an to will a going upgrade, onto get pro it's And that's you

Walt Piecyk

you’ve penetrated so you it big think is in quarters. we've that down slow been six inflection or Mike, adds very grown second for past, hey, you this inflecting half terms with Is then we’re investments whether a phone you of it's of while, for had this of these store mass first that and do markets this made investments are whatever in and quarter, which Verizon a kick of just, low that waiting the the good a still resonating for the and sub-urb enterprise, And net kind you might is that point is, it. the subs Got areas going it talked in looking band these haven't in the the take time the low the year postpaid forward. where you've about in

Mike Sievert

I are this demonstration -- mean any had pay that we've you're seeing down, And about the this is slowing stance. to is you investments John what off. been a was said, whether latest anybody question if this about starting telling as quarter business is the

net are different fringe every adds other customers it's player added our a That's expansion, lowest segment and then and Our the all net including up if two have and the into we driven is in always you us company penetrated sustainable. are very the those our and delivered that player That's really how groupings not the strong postpaid working, after the of been by and stronger. Comcast tell, geographic sharing network the by demonstration that's results it. and by it's we postpaid under getting share our phone expansion, number in it's with it's in things both very, history think took adds going driven taking strategy business suburban expansion, expansion, of phones but and and equal AT&T many brand quarter that double just them of market, to phone base the we're and and you can postpaid driven ratios working, as by so porting for X.X proud also driven it's the Verizon, having

Walt Piecyk

is I got guess see you response so unlimited, when over competitive what was Last launched time Verizon X.X the any. we’ll if

Mike Sievert

Right.

I right. We think think strong at over the school always of call. it. you’re I must Well, very inflection don't been word today many, many consistent we've on feel the welcome that this point, been quarters. but have All very day

John Legere

want hey, to time on August. for So taking everybody of their we thank X this day

Thank we'll We’re coming in next the of what's the quarter. Operator? second excited talk really about you and year up half you. to

Operator

and T-Mobile earnings gentlemen, Second the XXXX call. US this Ladies quarter concludes

or If for the Investor Relations contact you department. Thank questions, you you have your media further participation. any may

a You and day. now may have disconnect pleasant

T-Mobile US (TMUS) 1 Aug 182018 Q2 Earnings call transcript