TMUS - Earnings call transcript Q1 2019

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Operator

Good afternoon. Welcome to the T-Mobile US First Quarter 2019 Earnings Call.

Following opening remarks, the earnings call will be open for questions via the question line or via Twitter. [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 first earnings Sievert, team. Carter, COO; and call. today President and much. thank other T-Mobile’s of Welcome quarter CEO; CFO; Yes, are John

read the me Let disclaimer.

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

With website. let New Legere. on merger. with merger available T-Mobile the XX, important connection over matters. The statement we filed registration on the on is Sprint, contains became it to me the T-Mobile this, a XXXX in addition, to July statement In on the information registration SEC the Form and transaction It and related turn John about and proposed XX, October related XXXX, S-X effective with

John Legere

ahead. coming earnings Twitter opportunities start more in business everyone. from the Good T-Mobile’s excited be Welcome Nils. the T-Mobile’s of first about XXXX off conference quarter done, fast call XXXX you to I and and not a Washington. Bellevue, Well could state live to afternoon, and to our Okay.

today. lot We have cover a to

incredible morning. our this of with reported this So results. one let’s The big week earlier start and reported carriers the giants two cable

cards have postpaid total to say, the So XX,XXX the where for expectations an took XX% even for had AT&T I combined of and a to lost the added customers of our on growth. still losses, XX,XXX. Comcast quarter QX the Verizon T-Mobile a table phone most of loss phone with are add. low And Sprint phone XX,XXX and I like In postpaid hand. industry’s really and XXX,XXX, might Charter postpaid I report. left estimated

number net streak we growth accelerated way, results X record of and to We all churn million by time postpaid our and six delivered than also customer AT&T results. up year-over-year, our QX extended that, number an Verizon. churn put low financial X more On phone that delivered total of a per quarter top than of of points is ever within best basis that X.XX%, the better years

of eye out possible. merger? There on I’d So business. if recently and who dive so I because Can yes. give they while a let’s also is momentum planning keep massive numbers I’ve Can like right customers business for and care the results? little it’s employees about unpack, the business, comments ball My big the a and all this the friends, continue? deliver my their in. made to they take incredible of shout to about our answer up certain are to lot incredible seen my a am. about team sound I Can our manage a fired

than we branded more net added talk Comcast total let’s X.X times capturing quarters phone adds. phone than growth million delivering four a customers. cable extending in winning closest XX our customers nets including And next added First, postpaid more XXX,XXX almost streak industry postpaid expected the net and with additions competitor. We customers of million to the row XX% postpaid an X estimated phone

wireless postpaid only expect accelerated we in the with year-over-year, volumes. carrier fact, industry growth positive be phone switching phone despite net quarter. to lower postpaid In nets major And adds our this

lower net of strong than time only quarter pleased with We by a growth again prepaid and the down of over customer customers in this net wireless had wearables. supported total branded additions QX, the also time second our low, branded it’s X.XX%, Not X once basis low points postpaid in we year-over-year. In in are row. ever AT&T and postpaid than was in XX strong had million, coming longer staying performance churn phone Branded all These record quarter. continued we’re all for before. additions XX,XXX also record

strong $X.X our very X% record by Next, hit increased and margin. QX in a X% highlight up a EBITDA year-over-year $XX.X to QX. XX% billion, to adjusted a up I’ve with fully Service income reaching came and year-over-year of for We million, results. EPS by high of revenues grew EBITDA revenues highs high $X.XX, financial Total by postpaid revenues diluted year-over-year up got was $X.X XX%. Net growing record billion X.X%. branded XX% XX% $XXX record year-over-year hit at at record adjusted billion

and customer continues Our we’re stopping and new there. fueled momentum underpenetrated by be care investments to geographies, in not segments

we that in Sprint. and as lay make a join We with to the competition moves foundation converged XG increase forces world continue to

Home Internet First, our pilot. we launched

No We for megabits there and If this was equipment X second. expect a service speeds no of hidden to of to cost. per business contracts, and experience per up a fees up second uncarriering a paving use that XG ever it’s gigabit way deliver one. the no annual XX could initially good to

that also LayerX a Home. services and space big TVision of already TV apps, This upgraded to we people the and probably strategy starts is took but and in that mobile familiar? for use. based the will next launch cities, TVision an with notice, TV You eight step in Sound as launching product our be core hardware work rebranded

we to say have we later year. customers So products our innovative launch too. new And for this will more TV continue about

Just Americans fees. bank tired millions last T-Mobile account interest introduced bank no first week fee for checking of earning of MONEY, under a we mobile the

As more their pain as performance. proposition. to consumer on and an the continued our and we LTE another new coverage smartphones, more Also, uncarrier manage we opportunity XG create saw deliver value network expand their point to a money address industry-leading and Americans

across network band million Our we million and country. Americans now XXX to XXX XXX XXX approximately spectrum megahertz XG covers now megahertz LTE. And people with low have the deployed

and In delivered the speeds terms speeds. a XX in of of quarters we LTE combined average for XG download upload row, fastest

real out of XXX work foundation an spectrum, with build year nationwide be team is engineering the which as building next aggressive network hard well Our at millimeter XG expect megahertz as wave. to America’s we for first ready

that’s towns equipment states alive XXX Puerto devices times probably a And experiment will since standalones incredible XG to cities powerful we second uniquely And spectrum And lineup average AT&T capacity unmatched available in X,XXX XG on on cities of with with on new two XGE. as XG the to XG, megahertz LTE the millimeter mid-band getting interest. well Sprint have of including compatible We XG and signal. with we get launch year. our even And plan Our ready. today. we trickery phones deployment of eight X,XXX launch by into expectations. in are progress iPhones. our pockets today merger get will megahertz our Rico the XXXX in tiny hands map. time won’t and with using approved, on I certainly XX on in wave XX a capable smart hard make coverage speeds spectrum Verizon today, Almost which surprisingly, result have to is Not and we continue customers megahertz just the watched of XXX half We publish with times for in the on this that by LTE megahertz today soon having if as And not because a is spectrum. network ahead is access finding XXXX combined a verses won’t customers Verizon’s XXX

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our Okay, on competition supercharged merger. thousands progress pending merger deliver jobs broad a XG quick the the year the about Nearly of with sharing in our groundbreaking out how and laying day our day, beyond and first deep we and on facts story the Sprint. ago give months nation’s last of the will XX and announced one. We to one let nationwide network spent me the proof you T-Mobile wireless American starting and create New update

remain We continue innings believe respect of work we We’ve the that process a the to this major that them, review final consumers. that confident great in through of deal substantial regulatory have in are and for. good recognize we number merger a and will the of for a process completed we is milestones optimistic facts the the that and before with regulators record

productive have and We authorities. both continue a to state regulatory with federal dialogue

bring its March million wanted XXX, utility X. X, June the April a highlight of currently FCC out to New now shot approvals, non-binding a public serve X.X a made On our plans U.S. XXXX. X, to by XX home to stands PSC. is few laying with On with competition market the state households which received to the the FCC broadband the conclude required a clock, level, earnings since including I York our the which call. expected milestones So to last filing on state At we’ve we day commission XX resumed target

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less. New T-Mobile customers them will aggressively to all asking player the by giving be while the number will pay number and compete with one network three more wireless to

the in pleased I the this so from process regulatory the On the with and first DOJ merger the of and and our made half approval progress far on expect regulatory FCC I’m front, we have still the year.

To we’ll combination in and we Sprint more Okay. future up, performance be for to about I even QX XXXX. excited our expect couldn’t be with consumers. shows is means our The that that in wrap American exciting guidance continue XXXX to that more able create a our momentum

Braxton, results, financial of going take the the you’re guidance. through us details Okay, to our

look. let’s So closer take a

Braxton Carter

Thanks, per XX% share at here to Net another John. so respectively. higher amounted XX.X%. due The equity related rate lower benefits from the benefited excited expense. at and year-over-year compensation And be to rate $XXX and was state QX in tax $X.XX, for quarter operating up income XX% our T-Mobile. earnings income to interest tax million and Net amounted I’m excess income effective The lower amazing and higher to taxes. tax lower to diluted

the effective XX% the leasing per fully share income burdened million a EBITDA. by For to taxes range XXX from basis reflection as first $XX was million billion, lower to rates from the These associated XX%. we of whole, service due and and of of higher Cost new versus strong Note revenues cost spectrum. XXXX $XXX the $XXX decrease up costs of million a decreased of revenue percentage adoption year-over-year adjusted build. management. points of taxes costs the are to $X.X tax as costs performance expense million a $XXX lease XXX standard year-over-year, service Sprint XX% net EBITDA EPS as offsetting despite EBITDA included with in year. lower after of rollout record network primarily expect continue by amounted the that, of and a related regulatory $X.XX rapid in the were costs, The the merger respectively excluded quarter. Adjusted The before the adjusted megahertz to in and lease program prior

percentage XXX While megahertz points ramp Sprint still by of services costs this costs, as service of our merger XXX in decreased due increases expect excluding build related we future SG&A quarter, revenues significant a basis in out. commissions to XX to up to quarters, in year-over-year, the by basis flow the XX% X% new the cash decreased million, amortization despite from cash primarily CapEx. from $XXX the year. headwind a by to SG&A due relative or the points Free revenue year-over-year, last standard recognition decreased year-over-year increase increased

we included flagged front expect related As costs. $XX we CapEx last merger have QX call, to in cash free this end year. earnings our in loaded cash in flow Also million be

primarily merger certain ongoing adoption these as year-over-year. plans, partially our as free higher promotional the have reduction Excluding decreased of service premium down phone QX, for Branded been in by the amounted a offering Postpaid the to activities. T-Mobile revenues including and growth The costs, tax a plans $X.XX by impact would the the subscriber Phone offset ongoing of non-recurring net reduction growth rate in and charges in program due flow to and related segments in customer year-over-year. growing revenues in of reduction decrease offering, The postpaid impact $XXX Netflix ARPU continued cash on business, was our million. X.X% Netflix in new well per ARPU regulatory $XX.XX a from success inclusive

year stable Even growth of range revenues branded XXXX the impact For to ARPU to and year growth expect XXXX, a or QX X%. which Phone with QX. we to X% to customer of accelerated X.X%, This ARPU minus an full branded generally the still the remain Branded revenues, in Postpaid decrease full to postpaid promotions. X.X% year-over-year due partially and compared growth offset slower decrease was with plus by prepaid compared in

X.XX% debt In sale from of quarter compared revenues were in and bad or terms $XXX of to of the continued strong. results quarter customer first quality, million losses our the or first receivables million expense Total to $XXX total be in XXXX. X.XX%

to XXXX get guidance. let’s So

lower It of up seen branded to growth to to million. customer our takes our the and to takes Pre-close particular expansion, the into costs from the billion of range in million switcher merger in X.X balance growth now into the postpaid $XXX prior between guidance. strategy guidance in volume million This $XX.X expected leasing our prior net to depending to This account X.X significantly adjusted billion expect be XXX takes are expect $XXX of adjacencies.We MHz $XXX continuation pursuit and EBITDA from into X.X long-term of and $XXX and guidance still be $XX.X guidance We of XG million additions profitability, network account a XXXX, be X.X XXXX. unchanged rollouts. timing in revenues also million, to recent related million to in on of quarters, potential close. our we’ve account

capitalized billion impact excluded to alone, to increase These will net income QX $XXX we $X.X We significant merger target but For cash will amount $XXX from prior down is of front-end approximately QX cash costs continue to million our a be Sprint excluding million $XXX million, This interest, step related CapEx and a from expect with of also billion, $X.X be QX. slight CapEx to be unchanged to adjusted costs flows. QX to EBITDA, from from will which in XXXX. guidance. expected expected levels. loaded is

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

guidance cash your cash Our outflows forward any not from Well, get merger flow costs from net questions. it basis. free let’s cash assume CAGR going does excludes securitization the and material to

to focus quiet the questions answer wave options. I results. would to related on last operational around current quarter’s any questions you millimeter the during call, we period these options to Also your ask As due cannot our earnings

ask phone questions or first phone. Twitter. with via start question a can please. on the We’ll via You Operator, question,

Operator

JPMorgan. [Operator our first Thank with from take Instructions] you. question We’ll Cusick Philip

Philip Cusick

Two ASC have and simple what you where lease the can you you network process in talk thus about of the we’re don’t spectrum? areas – ones, then on can growth XXX if an expanding talk just EBITDA can. in for I And accounting? was XG apples megahertz about where Braxton, you. the distribution and simply Thank XXX Mike,

Mike Sievert

on expansion generally reported the followed to I mid-band. low-band the or distribution expansion, we’ve we’ve fairly past a done of agnostic is the think one, is in Phil, whether the it What network. not versus in major looks first It’s it that area. marketable at

sufficient have high then very that area able We coverage And a wall to have households distribution and enough coverage, if quality indoor combination mid-band launched we and households through be to thereof. we in get enough low-band, can or two be with that coverage.

now distribution things, from those And expansion because an people. talking got that’s coverage And to distribution initiative about the XXX takes coverage We some a become for this a number of and We’ve work, well expansion. and that stores started told to And to geographic million for you so when months then time. one, that told says milestone months years XX close. the talking XX POP geographic ago couple close the big about coverage of you it north productive. two starting to we’ve this about been is we

We’re of terrific. is starting results of is left. that, And to there see which some a of lot runway the second,

rural and conditions T-Mobile New case, a create the where of more of we scenarios. As experience runway left that’s in context both can we where areas, changing game the in there’s particularly in the more lots create more

Philip Cusick

few some you there, Can quarter, of the last Mike of for quarters? the filling impact help the over

Mike Sievert

intuitive, it’s add produced, producing. our urban experience out we have those we’ve months fringe, towns, small that’s to been to have to expansion most takes productive XX the start that those And pretty did stores in contributing. expansions, cores. a investments made has XX months in the Greenfield Only it And for density areas say that areas, been suburban to

but areas far, course as those most cores there’s effect by urban you distribution add productive density in are Our cannibalization of areas. our

a standpoint, and markets. so on probably from fringe investment you’ll more Greenfield And future us suburban focused see

Philip Cusick

Braxton? Okay.

Braxton Carter

Phil. Yes,

to of lease we I moving our standard quantification and overall not certainly Q is providing investors things the of with the you new would material. all fairly that ourselves items. for the several I The those the underlying momentum but truly results. the rec, overly our and think just transparency it, understand to of rev tools point Factbook items with de one to really to pride has minimis business. And

Philip Cusick

you. Thank

Mike Sievert

Operator?

Operator

our take We’ll Citi. Rollins you. Thank from next question Michael of

Michael Rollins

Thanks. Two could. I if

a you’re pricing of the about launch And environment especially your front ARPU and Thanks. broadly. competitive how talk to what seeing you with and in context about the little LayerX? can more update promotion First, us thinking the you’re second, on the on you’re bit what Netflix category, bundles within for current more an give starting

Mike Sievert

territory. where So couple was AT&T or overall, felt you quarter XX% I that And in sure there a everybody and over a this pretty it’s – we a whether different as at quarter another competitive competitive I is good quarter. imagine it. places. the phone help postpaid It it Verizon things, can those it define think intensely in you quarter of of to one we competitive lens modestly whether tell adds drive it the define you as has shows net intensity. on of all more would negative took that both more and a intense

deliver of come another the to expect what to of For was delivering us condition. regardless us, you’ve it quarter just

That’s it we’re core with about was stuff, pleased that mean pursues. No, don’t Listen, only do the that. decent really a bundling. bundling mean product you a depends a on second bundling. AT&T other If is of deal if bunch then going buy I’m bundling, you by you game the Mike, what had And you not you to plan it question, bundling. give want. will by that really So on what you

can the You get of time a fair lot on they only depending deal how their a promotions. post

want. TV product, wireless bunch you of a prep when on their On don’t core you take that satellite

full that disruptive are plunge to offers? going other we more are. going absolutely to line that to offer Now offers with price TV the from disruptive range T-Mobile home some we a lower in you’re if cable TV hand, on Absolutely, augment we broadband asking going with ourselves replacement, the we’re do Are that. New into

propositions attractive what and We’re in going with those to uncarrier does. wireless offer are value concert consumers. the create that Yes, that’s to

down comes you to it bundling. by what So all do mean

Braxton Carter

He couple Hey on is confused. bungling. was Mike, add he AT&T referring a let which Well, was the what me ARPU. to things does,

that back translate at be the seeing think had monetizing certainly more we been the always important with very uncarrier years, And I important. growth that and I that way guidance, a low ARPUs, theory to and that we and two reiterated the to terminal raising the you’re at so value we we’ve look foremost, service value. more then end And first whole bounding business, and There’s been build of strategy monetize ARPU much to the profitability creating business. that we’re our has And think have a on lock flow, relating that clearly and of here underlying ARPU. have the obviously. less reiterating if revenues, is a And here by which cash today it. that guidance by base, T-Mobile. that the that’s volume. balance last but last if you just into progress six going not strategy guidance not service what’s this you’re it’s much way of our But why same been it’s the powerful we’re on between profitability. done to exceptionally trying well really through free scaling life you you revenues to note customer executing the strategy in years the And increases the to The we’ve and significant would the ultimately existing over that’s in we’ve

Michael Rollins

you. Thank

Operator

take next Hodulik of from Thank We’ll question John UBS. our you.

John Hodulik

two Great, questions. thanks. Maybe

struggling caps of you then other secondly, tell the rural, filings details can in or provide. some Home First, recent And terms the whether say there’s enthusiasm Do or of does been in close than anything suggest be company details of the thanks. product integration is through us that any terms the a deal? Sprint may a rougher in Or investors. the going guys patch suggesting based able Internet, deal? terms of from sort filings to, they you the one the urban appear company go the if of I of suggest to or those for of the not more pricing to it it’s would or are growth you or temper initiative, through more your

John Legere

the Take first Mike. half

Mike Sievert

– after doing Yes, plan Home about the T-Mobile for that of big the particular than T-Mobile those United one first a in will of XX% preparing What all to mentioned we’re in this households that’s half win program. capabilities the Think biggest broadband New the is or a And XX is we deal. providers make That’ll million the to allow Internet. John trial of big eventually X.X States. as one and has as us more aspirations our million country. ourselves space it New XG network T-Mobile. The New this go of in us

even have ready era in learnings we get XG for this So under to get and it the belt. our

So It's XX on. This that’s in second what’s essentially wire exciting. service. per we’re customers And way. doing is today of XG in really a a capacity megabit LTE, allowing even going is what

for et an tech, in-home cable they the very all day need been for have save cetera. applications. high we We’ll wait think visit, a for it’s no no need around a on, And capacity course, there’s a we When exciting. them. money. of to quality to where they accept lot very support So the services sign of And

it’s lot very that we’re So more forward on front. a to coming and exciting looking to

John Legere

only guess announced all say in of of Yes. the planning has, we’ve all one and I the done, can Sprint we’ve work all year filings the we’d not on I the that that the but diligence guess deal, could we thing integration I specifically done. question, since the second that about say, the I done, any due

Our opportunity is the enthusiasm been. it’s than greater ever for

nature jobs, the Our on together, pool and the size the on in-home power and you put when gone impact the country, XG the for network belief expansion of positive into the of broadband synergy the in has the up. them rural

of later, you our done were diligence and excited year coming enthusiastic one we’re if FCC more ago. about together as the as more we our of than One these the and all aspects learned So year take we’ve with what work well DOJ. the companies in and

John Hodulik

Got it. Thanks, guys.

Operator

you. next from Flannery question Thank We’ll Simon of Morgan our take Stanley.

Simon Flannery

just XG to there. in supporting ago some Neville, think Great. a can competitive can maybe I what go-to-market basis, a year. John, high-band of later Thank you. have you spectrum being lot about the of On a position kind of this devices much. with a expect on the see sort offering bit we you have terms spectrum us of you a XXX? update XG Thank you’ve said And had mid you on expound But talking low, activity seen blog recently. about of mid-band little and a you’ve I post importance days you’d very couple you importance. more can the talked the

John Legere

Ray reintroduce in would adult the room. the Neville I And XG just as

Neville Ray

enjoyed you Hopefully, the on. blogs

I XXX radio. few XXX on we’re are. enable we’re So to capable as you words try folks and again just of John XXX on importance to megahertz remind rolling megahertz, XG out And stats that, rollout. lot provided the a we of a the and where using understand

megahertz megahertz taking new covered I’m XXX a coming we million got we’re for we’ve obviously software softwares XG XXX on So basis, and we LTE here miles of XX million today, POPs on regular out XXX And over are Rico. states X a in in Puerto rolled have working the LTE. square fast. heavy and But across

it’s up And the have we like was And handful very half from And megahertz. terminals very very a think in millimeter going mature. successful contrast be to XG to throwing we to to on in urban we four – said very, the that to today sites that were be in yesterday, millimeter launch U.S. We AT&T I you get will millimeter wave. across doing spectrum But a wave ourselves. footprint rocks second out but of And XXX two point highway megahertz. we XXXX, is of XXX on the pockets a as and XG, of there cities, and we’ll incredibly limited intend sitting ago. have services just an on believe And down seems when environments in there Verizon. we’ve you that auction, maybe with the a and are it seems the XXXX, of lighting but years the environment, we’re limited enormous with nationwide more in look three, software wave, tell stark be as range. now XG. I which not footprint So out. put very not we lot large And Verizon enormous we’re footprint in We going can launch an at our lane at

We of to in to work customer’s we That’s but month the to price decided on today. access our pulled to with they POPs guys XXXX. soon and software can with the to get and a XG. have we that we goal and like they – believe as Verizon equipment XG excitement the but will. And they scale the as ask do Not trying what handfuls. continue to XXXX, could launch comparing pulled devices their into those contrast wherever force millions covered it. and back find onto of people, love tens $XX pay in were hands, bucks to have customers of even I same with the to more $XX back They’ve as

John Legere

and that’s lot nationwide of already Yes, miles as one being talk a moved all are a to a of April as we deploy million long of XX states that be team in here to on the move XXX are a this kind time, that and and But amazing. that We spectrum we with XXX. next territory doing about compatible. having XG Puerto cities square XXX milestone. fast team use we’ll million, that X of to think been I’ve past year, across of maybe first It’s already we as never times that. editorialize, accomplished excellent now an I’ve just defined Rico, I seen towns XXXX in march X,XXX this

our the it about of call of data that’s of X.X XX piece that the data points part a is very on at in brief agile for of up quarter So business. we small of a question, basis the just X.XX, look second each pieces pull one, our half quarter just porting positive way But postpaid I’ll the we belt, a the year-over-year. – at was one

should part that of so that and So question. the –

Simon Flannery

Great. Thank you.

Operator

We’ll take Thank Moffett you. of from our Craig next question MoffettNathanson.

Craig Moffett

thank Hi, the I’m a spectrum with to questions Neville, could, related minute. you. for if I stay going

including the talking your could gigahertz First achieve wrong, comments you was that network, spectrum. the correct think in I’m that with when if X.X John’s me I but speeds was XXX about he

how event on think your then spectrum, gigahertz on the based in what additional you rollout the X.X the existing you speeds Just for network of XXX, of merger kind you can your the the And didn’t that about spectrum? need think do the do on you mid-band? XG deliver with with provide satisfying

Neville Ray

Yes.

lengths a we So combination a in nobody today. Craig, a are on question mean T-Mobile there’s about megahertz the light bunch around within obviously, the about megahertz that think XX of of that can what deployed with basis, than excited clearly the and up, on New standalone we’ve room as achieve do the what just I we can T-Mobile. assets and we nationwide I of lighting with Sprint the XXX top talked questions And me more in up

XX they are the speeds into the well today, network not in That’s from the the XX, hundreds absolutely right. averages, are probably to but going peak are quite doubling today, that speeds exist So and XXs achievable, move we north into second. per megabits net move XXs going where of to

aggregate, an that the in XXX combine mid-band have. you spectrum with As we the megahertz

can the dilemma. that that the tremendous solve especially So the messaging. and the And a X.X We the the breadth with with in and and combination world that But fails and – rollout fact gigahertz the the need T-Mobile. we into is what that address with we the here can XG running world with can earlier this with. Sprint, know, with mid-band forward move and John mid-band in Craig out points have really data pointed a experience all U.S., and of XG, depth rest early, New very and T-Mobile XG as you this spectrum of we the comparison of do achieve interesting spectrum push we of that’s of which the to it in proposition. can mid-band amount

level different that’s then on. comfortable sources Sprint a And standalone next about and way unique we So I needed a and about real other anybody. trying exciting mid-band move the T-Mobile that’s a coming and any have. But in created it’s very know in be that piece. of U.S. us timeframe over XG that the from cannot spend the world basis, and to the that on performance how a in to really coming or new world. that everybody I’m I out network. that else of a spectrum what’s with time. piece where opportunity. that’s Craig, Obviously years. a we the strong not AT&T do to for mid-band lot that’s XXX Verizon we’ve I’m creates asset But so I’m is my focused figure the and combination from That’s marketplace that’s spectrum opportunity to the megahertz, that auctions got where a adding thinking of in drive

So long Sprint. a this look of that is the combination forward the there, the we and of thing lot to and excitement confidence for but

Craig Moffett

All thank right. Very clear, you.

Operator

New take you. our Thank next Street of Research. question Jonathan from We’ll Chaplin

Vivek Stalam

for guys, it’s Hi Two Jonathan. Stalam if I on could. Vivek

is churn still think the how assets there it’s I separate do looking think to and continue at? company, reaching we you the about how guys about you’re maybe on standalone those deal Verizon really And retail can side go? like numbers basis First, or churn XX mean, some other benchmark structures on low the focused should you then a old points And eventually exist? where network potential

John Legere

Verizon, this below And ultimately second Verizon. row. from one. we are churn and away context that than the Verizon, achieve we guide to I I as of that shouldn’t We have able can customer tell in believe you the start today Verizon T-Mobile. when below can churn, there’s be better you for with the where AT&T superior prices that’s lower them to a – and second ultimately network And bips T-Mobile, than a standalone just in on quarter, but reason we quarter to four no service were have we don’t New the

trend here the as really may out of the which So We built we segments, excited as as prospects. enterprises. be we’re continue to well see at network about continues to older rates ongoing large some like like an churn Americans, improving lower underpenetrated progress in

This structured be to room be approved. as pro and believe so consumer go. question, part And review the we first deal competition will it’s hard is your finish your on there’s their of that pro to as clear. continue And and left and regulators process,

about structures referring feel you’re point that good are this to reason no to alternate about So I and its deal as in structured its as have universes very at think time. I being the reviewed.

Vivek Stalam

thanks. Got it,

Operator

you. Brett from question We’ll Goldman our take next Feldman Thank of Sachs.

Brett Feldman

taking for Thanks question. the

a net had in obviously You strong the add quarter. pretty phone number

to in to aggressive churn could come I not that you And to. you what I but just having down need opportunity of cash just to less sort a think up if because on obviously I’m choose great little great through level it hit high the a had you as in trying said number you have that. talk what you or grow, you order with understand the market, leverage attractive of you interesting, And but you in cheated offering just could so your worked of gross add was that a the get was a that and do is sort less this it out flow to didn’t if opportunity be mean to market wonder ended churn, more to around adds still much. to

Mike Sievert

Sure, Brett.

something to be to in the we’ve do that and quarter as and the we which making balanced, told he’s we’ve to at this rate we growth do at on this all past, day are plans. need deliver all think, And at rate because real every be than and you so do years grew. actually grown calls could what I from progress in we is financial able aspirations since faster we believe need enough shareholders growth. our as along, the always progress, we making Our we customer the business done time strategy What benefiting Braxton profitability keep so to this, probably quarter for always our on this have said game I’ll just we a long repeating through we we’re growth that to been that same make

levers than thoughtful faster, were is It’s grow just or advance growth that day like our could customer different or we’re do that. deliberate but out, financial we achieving which balanced, held we something have saying would plan, results that’s we results. in certainly and day and/or in, back And saying so business

John Legere

step not said now. brand up I a of you think if time all to we’re right the yet that customers at times, value. brand, very when fastball, the look curve markets and the The in I network, customers years like various that more have of look think slider ways throw than we’ve at it’s park. proud and And or value a adding each described the a proposition, it competitors out or it sort our experience, many right ball we care rooted a our shareholder we six able million on you that ball the by been quarter, people, delivers with focused our doesn’t matter customer business that’s if adjust of unparalleled they we’re in the the are to plate the the consistently the of

we’re very So that. of proud

Brett Feldman

Thank you.

Operator

Thank Ric you. We’ll from of Raymond James. question next take Prentiss the

Ric Prentiss

about success and what what Thanks, found the in us little signed the with far you’ve the you had to good they afternoon, deal John, deal. to in see wanted deal it? guys on what as see to they California from as make might interesting mentioned Fund California a the help entail back. guys. go I you Technology bit Can Emerging wanted to talk

John Legere

any that, Is Mike. content there saying you’re

Mike Sievert

the to interest Yes, markets. we agreement with to trying So Are able make issues in reach put they’re public look jobs the you take broad money we in were them What’s state? public this ago, were some we our where looking on that – at interest we the benefits around a our lens weeks investments communities in like, network. really going like built to will on and the make state anybody and that state? picture sure underserved the tell in they’re can

able better we about we made to state in and reach the investments investments also firm of making would in less we’re state, about particularly the what agreement California network benefit advantaged and and so broad kinds consumers public in commitments make And it that more capacity deep that this in to and drives which good the therefore a XG order merger serves about, in the down. is network, accomplish talks prices has

are the general topics that those covered. So we

John Legere

very the had discussions to are the network strongest relative those deal they’re filings, oath that and and And important same What you enter all XG or are California issues. rural home build to will that in with but been clearly are California have will and with with think we’ve the of out? with happen discussions the constituent, cases, we stated in you What network them. proponents the country? benefits in the of deliver to things What about under exact talking the our I year with really broadband? will some America? the very enter opposed we’re Senate And working that the plans on in individually happen these items deal that will them offers every – the What for will testimony, including happen fascinating states, our prices? you’ve business environment have Congress, for with on about and similar talked you with an Will where the it’s the the the jobs?

much of we’re many a perfectly pro-consumer a it. if output willing And just lot by So answered and that easily all matter this need has constituents in the to are of and all pro-competitive something that. the be, but commit it’s and involved, like of do fashions explaining concerns which so questions transaction of to the

Neville Ray

the deal competition broadband and that’s through and rural on in of that’s of and area have great better on just an rural really tensed statement underlying just dimension this wireless bring how been been service how something one the intense our Californians can login. interest clearly I serve

very said, but across we’re think, – nation. California, opportunities those about we’ve as excited just I the and not

John Legere

in most trying is integrated country the to pieces, matter border about opportunity specifically anything, this California. part, about to country fun and the the would say their what like them talk America for exciting Neville, general, of good, rural just and we This with it’s to such discuss on an hope that the to pieces of the truly for a not have for not discuss I New they of the could it, discuss opportunity T-Mobile, not it’s what been full have with they thing we of I a and but component state compensations hide proposition exciting. so every have just compelling all the

Ric Prentiss

Great. Thanks, guys.

Operator

from Thank question you. We’ll next our Macquarie. Amy take Yong of

Amy Yong

Thanks. Maybe two questions if I could.

Home on bit I on And throughout that going First plans second is think year. the this that service for revenue, industry we it? is the think a seems about price versus about bundle. it grew you like that just decelerating, and do wide, high nicely think, made. outward your my How eventual the number Can I trend comments little Thanks. forward? quarter. came TVision back you question which points the talk that

Braxton Carter

stable revenue, that day day driving. it you many in Amy, ever trend And ARPU deliver lead we at as competitive aren’t periods, that industry also when as we’re the be are were a you’re this in promise few the many, And quite the revenue guidance that just where it We amount service yes, all has fantastic being seasonal business of before – X%. we’re plus T-Mobile. of and years you which revenue adjacencies, a And will momentum given looking things hitting deployed quarter-after-quarter are growth all decreases. quarter, that. come amazing growth. s rural testament or differentiated On we that the strategy strategies T-Mobile to foundational it’s to And when the expectations. a again, to absolutely in of service revenue, a that continue generally be get cylinders. a the contacts an on of IoT you quarter growth had with not significant we’re is minus the one people out business, increasing an That’ quarter, service that the for it to from Any in on intensely – It’s a comping principles when XG for continue one that’s have that’s and of the of And we’ve the going ever percentage growing with increase, remember things key to the about significant in that the standpoint. intense. gross and certain

significant our revenue growth. long-term yes, service sustain So expectations are

Mike Sievert

of been revenue the the industry of decline for T-Mobile four I intrigued declining years. outside or was about that just part in was has question when by industry growth, service three

positive, something is revenue has second? no So growth they a player probably there have of that outside other Was T-Mobile. of but one quarter there sustained

Neville Ray

were Yes, asking about TVision. you

we at eight where the as journey. integrated in in demand And pay, from with DVRs et of in integration, work said, and they’re Francisco, you it replacement after broadband those the full We’re year beginning channels we’re you really that we big sign And year for multiyear something now up that I and def Amazon, the and in New day broadband first cable away we an Google get crazy space, et have and promotional those content, XXX and fair, social cetera, that’s the need come when integrated of TV in cetera, on priced and year. at below cable But for it’s of product With slammed. rational And right person first low satellite two sort because typical media this going space, saves a product, one, the then happy coming people in versus way contracts. Dallas, it’s the lot cities Voice are starting and They’re to more it’s Alexa family. in content beyond pricing people beyond XK cetera. of contracts, country, and integration, get money and each and journey. it’s personalized And last what space. the of Philadelphia, journey month. et cable two in high the started York, LA, Chicago, where a the San biggest across we’ve

to working with you’ll of OTT room we’re in down broadband. first see space, very through last as about time, this partnerships we about from And there’s party and in mobile more it lot later said that I and And path a in excited concert have the space. So moving fall us. then mobile we’ll and say think we’re through And offers that more year.

Mike Sievert

So those are the operator. next question,

things here, those. about have questions the there now, would is I to afternoon. said, One, tough say Dano, We keeping Mike they’ve today a that board who a from some and schedule Twitter. John full mind you Braxton, of would just question in this are And that coming call is two got

Piecyk. XX% only of the I’d Walt bat. you then I And the rest the So that that hit of Thank off I right your for are thought there. journalism from one depth bring up questions all because of

queue, next he’s our us, but dominating for the also in he’s boards. unfortunately So,

So full I move would say we and next. board question next questions then Twitter take wipe this operate the of the and off we to

question. next operator, So

Operator

Thank BTIG. you. We’ll Piecyk of take Walter our next from question

Walter Piecyk

call. another questions so just I’m John, we ForEx with this their else to on trying everyone question don’t help get

John Legere

to want stick you Do add [indiscernible] with humor?

Walter Piecyk

to to do sure, to obviously get you you revenue want the profitably. lower pointed go and I’m service add I you’re as back question, Just churn can this is lower go gross you growth trying can accelerated, out. look, which

much I how I get. lower mean it questionable think out, can it’s pointed Mike but

churn, the revenue expect kind on some to investments That’s returns if first gross form marginal this exactly those right growth. about going part return the question. network. isn’t spectrum of impact look network the this some of the in which the your have and we about did we’re at in Again, you this the expense was quarter, what but your assume So XXX ability accelerate And expense up. you do terms of point, Shouldn’t at of not, see call type to quarter, to didn’t of add I diminishing Braxton going adds talks the and gross network this on this we on growth. investment in

said bullish can bullish? The can in dynamic second do allocation just you millimeter do curious you What travels occur? a Neville, comments bit I’m this if on you about think one’s applications you you’re and when you give How more are spectrum that. wave spectrum. think color for little far Neville. signal the us specifically

John Legere

So TV is good, Walt.

wave, is to Neville question to huge I’d about simultaneously wave you as an say turn what churn to but adds, think you like be he’s I’ll also on secondly, a is Mike. $X.XX And absolutely incredible. I said on bullshit have strategy. meant pay ask careful millimeter for but because millimeter that to And overall bullish XG dividends, gross

as So those to clarify two.

Mike Sievert

plan. great The translate essence longer there’s And just I’d we’re our our their telling with plan, return execute we financial it’s a all quarterly This cash customers where’s into in And these EBITDA, of and that of and make seeing us. Neville? And some question response of financially. demands that were for to earlier was doing. people we churn, results what same a it. trending And And that look another got we that’s on the what of of deliver friends gross questions, quarter game that? your And earlier that and the in generally rates, to And plan growth we’ve more context strengthening order Walt, not, adds a blockbuster gives every to cash tuned and these the gross for that’s is in get and EBITDA, results together staying to those answered profitability And more your increasing the the in results. excess are the of strengthening adds, asked making premise need front we question. of day day chase at to do week the at us reason satisfied and with that And how to investments. certain calls. are blockbuster lower you of a if flow that’s kinds flow every of investments – we the number go we of optionality. context expecting And and kinds the been brand we because that, and go of you’ve speaking, we mentioned is, don’t we game on us amount profitability.

Neville Ray

pick me up. Let

on real you millimeter So right. if up, where wave, look XG quick, ends so at

far. sure need because to need very to than seeing, It doesn’t its XXX, is we’re cell. of mid-bands, you’re need mean, windows going doesn’t It well. away much propagation I millimeter walls, it wave where penetrate and well, going right. you You’re deploying, go going wave, XXX a we’re you’re limited, get does limited spectrum. to small low-band play very And millimeter feet more from

world critical ain’t capacity rest looking play of those that the miles well for set dense doesn’t dense in especially in can look of mid with urban in said, environments. to urban out That’s need solve not, when where out. the You much, to But see and XG million-plus within millimeter in. opportunities the types story, wave spectrum really X the the really delivering the around right. and and square of those XG, But we’re comes environments figure the is the low-band about it U.S. you thinking and that’s at places

wave Now Sprint with Because are spectrum and we form deploy get how try grid. and small mid-band Then literally economic way to super, as existing super this out it of is it’s you millimeter hundreds to cell thing of deploy of coverage mid-band fast? thousands do give experience. XG we contiguous way, more to hundreds to cells some and on

trash sure kind horizons up wave, launched the those way even fixed WTF to call did last been just thing, what’s it’s So with I’m it, the stuff starting history it. not to early. the guys. consigned before They we year, we they’ve almost millimeter launched, of mature too

they’re it using. beam are on XG But as with back get awful real. software comes early new we’re propagation and software too millimeter and will seeing not real established that’s they’re And wave. those real of capabilities And the loads now somewhat customer for and early that too and all uptake come in So better, the yet. R and right, from forming launch spectrum

of problem. compounding part the that’s So

spectrum real dynamic So on quick sharing.

to fixed that as a in not or of It have will is spectrum customers XG of allow that us today. what spectrum us to block to a that So mix allows dedicate to say just have LTE we block. supported in

the create It’s and this, on year something paid next awhile. feature, been working attention for it cool obviously, it coming week. Verizon call has new to earlier I any the the of is super So doesn’t fact close But what, comments in industry the on CEO’s on that spectrum.

no there’s spectrum the magic sharing. So comes capacity dynamic out

of trying end you two just would and have compute, low sharing wrong… you spectrum You at with, for the to me folks how mid the I get don’t that don’t you pitch depth and technical same spectrum the rollout. XG things Those spectrum fully. the address, so the as was have understand dynamic started band

Walter Piecyk

just not Neville, them they’re use the to lacking the deal mid-band they have theoretically deployment. new this terms the with forth, that and R, wave spectrum, and mid-band But then it millimeter let flip back coverage that in XG where of coverage get need with would could issues today they they wouldn’t

John Legere

radio. a make get And right. deploy XG, piece a Well, dynamic they to new on to sharing, the spectrum you’ll somewhere is have start interesting

band. in Verizon very I radio band. limited some am very yet breath effectively in same DSS. for to out rolling as radio There’s compatibility XG want backwards they declared I heard recently mid that in hear deployed deploying DSS, yet mid new that Verizon. use And in haven’t low you to band a if declare strategy are or So are low on anybody to you a committing the and for

in and everybody, we we’re what best Yes, volume the like of need those spectrum for does it’s have think that no way and T-Mobile. looking to introduction going they start the minimum but to do, it’s with. I XG that do help to match especially set services new offset that don’t or with

not of spectrum We believe not does dynamic are and in into megahertz Verizon spectrum going share that exist mid-band me does to and there. portfolio in you dedicate the of hundreds tens towards XG get

Mike Sievert

Also for I’d open – question. ended you like add asking to an thank network

Walter Piecyk

Sorry.

thanks Sorry, guys.

Mike Sievert

experience lets to unless is isn’t T-Mobile matter is discussion new there technology XG. that going the so aggregate mid-band XG is layer all from doesn’t at the and about XG. differentiating take new I strategy. that And just great takeaway it that The you One that’s the be what’s if

John Legere

operator, final question, to take Okay, one we’re going please.

Operator

from Thank our you. Mike take McCormick question Guggenheim Partners. last of We’ll

Mike McCormick

for I do we then Braxton, for improvement? markets into And sound spectrum of Is that require? the reinvestment side reconcile Hey, sort number the just the comparing against your EBITDA? guys, avenues. sort Anyways, it write come what comments Neville just XXX for experience improvement conservative? primary guess what’s conversion up I because sell won’t that both then need the And of soon a at though just nodes could about about in jacket, on in build enough the might think is certainly that lastly on or of the and stores. thanks. sub-guide the megahertz secondly, made being Neville, of the And you out, we How the yet secondary there comment love sort to And as you. those you looking non-EBITDA the biker is of just John, guide reconcile versus those towers maybe X.X required and

Braxton Carter

in and our to are conservative so our start guidance. out, playbook we Yeah,

higher into reconciliation higher We guidance potential the have to we’re a into opportunity higher quarter. and guiding EBITDA by and year, pure standpoint, a a And as deeper guidance. year the goes history of by. stepping there’s step not growth certainly get we From into

giving you look you We’re when with net an outlook adds acquisition not paid end and of annual the tail get the the in do you’re going to those on, back. you anything at associated bringing year, costs

So be it’s EBITDA. to or to decretive dilutive actually going

side, very other beginning the pays – at over performance year. compare year back during the certainly on the the of Now

and we happens. when T-Mobile quarter. of with. the again, just it, watched same statement quarter states playbook, really I’ll that by the go knows timing but played progression started to a in So of conservative And with of We’ve I everybody granularity, go the the it down to it’s back development level don’t take we as that further

John Legere

Neville? Okay,

Neville Ray

Yeah, super, super quick.

quite pretty overlay, I X a so one doing are we’re not reverse but So on order Mike, – we megahertz one XXX deploying on deployment, mean heavily.

deployment – looking that this thousands we with look XG. there’s and nothing to can On XXX. and of that if – of match megahertz, of will T-Mobile spectrum, are can that. comments receive again XXX what T-Mobile very and doing a primary we my obviously. There’s the Sprint year spectrum can tens how on large secondary tens not quickly sites we volumes combined commit literally the are But mid-band and – heavy all very do on new So, at you markets

it issues. now, small in look is you carriers, world three a pushing piece XXX sharing a It’s of the XXX of Rest it’s coming, FCC If spectrum. at spectrum, the is megahertz the volume auction the hard right. open across yes, but new CBRS environments, on working megahertz got plus mid-band

at If – know And lot that you and several that’s only the C-band look of we out. Korea, feeding thing Chinese a to would be that’s market, close years comes as spectrum. that all the

especially is to assets. fill the with opportunities gap, get opportunity spectrum the over the with can’t of two delivered our real that XG that to with other deliver massive – the depth material three and can that breadth bring experience mid-band years deal and So, next that

Mike McCormick

guys. Great, thanks

John Legere

Okay.

Operator

Sure.

John Legere

quarter evening. very a forward and thank at next again speaking another look you to with want in for today to I great quarter. for tuning we great much Have everyone T-Mobile

Operator

concludes quarter this gentlemen, first XXXX and Ladies the T-Mobile earnings Us call.

contact may relations any further departments. you media have you the Thank If you participation. your for or questions, investor

You and pleasant have may now a disconnect day.

T-Mobile US (TMUS) 25 Apr 192019 Q1 Earnings call transcript