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TMUS T-Mobile US

Participants
Nils Paellmann Head, IR
John Legere CEO
Braxton Carter CFO
Mike Sievert President & COO
Matt Staneff CMO
Neville Ray EVP & CTO
David Miller EVP, General Counsel & Secretary
Michael Rollins Citi
Simon Flannery Morgan Stanley
Philip Cusick JPMorgan
Jonathan Chaplin New Street Research
Brett Feldman Goldman Sachs
Craig Moffett MoffettNathanson
Kannan Venkateshwar Barclays
Colby Synesael Cowen
Mike McCormack Guggenheim Partners
Call transcript
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Operator

Good afternoon. Welcome to the T-Mobile US Third Quarter 2019 Earnings Call. [Operator Instructions] I would now like to turn the conference over to Mr. Nils Paellmann, Head of Investor Relations for T-Mobile US. Please go ahead, sir.

Nils Paellmann

Yes. to quarter welcome earnings and you T-Mobile XXXX third call. Thank members our today Carter, Sievert, other leadership are me CEO; our the team. John and Braxton With COO; Legere, Mike senior and our CFO, of President

me just read Let disclaimer. the

Form facts. forward-looking to will statements current are differ future beliefs proposed statements and with on receive report could Such results, from call, uncertainties our operating management include the annual plans, other risk and our XX-K that cause XX-Q. are expectations of Form Sprint on forth including that make the this materially, subject outside upon and projections statements statements our not based During benefits and set our the financial control our to growth we to our and factors about significant quarterly we historical that results the our are actual in of expect merger report

and non-GAAP Relations this between page Reconciliations Investor discussed website. the be of the found on can our call the results of in GAAP quarterly section results we

effective merger. on registration website. connection S-X the the It the transactions registration about and the and the information related proposed T-Mobile statement XXXX, T-Mobile October on with Sprint, and merger XX, XXXX, it's In addition, available matters. to filed in on we became with Form statement XX, New July SEC a The on contains important related

John to With over that let turn me Legere. it

John Legere

Bellevue, and got T-Mobile's coming conference. that lot are rousing Washington. quarter We for you Good from call cover everyone, today. a you welcome Thank Nils. Twitter live We've to to third Okay. afternoon, and XXXX earnings opening, to we

record blockbuster we not delivered the skipped beat. out we posted We incredible service can that another from QX. put revenues. You just in our and the maintained that momentum We see results quarter have

QX these merger on In flow. let you phone of minute. But income, talk free about results total first, record delivered quick postpaid cash and a QX me We'll EBITDA, our churn, update branded with we adjusted in number incredible a including Sprint. low records, revenues, give net addition, a

very pleased to on approve of exhaustive review facts, Communications are merger We an October the that XX. Commission Federal after voted the the

Now both FCC a have Sprint of combination. T-Mobile and the DOJ agencies, validated merits the the and expert

As closing the that deal the remain final steps through we merger, are we work of our truer of merits today. convinced even the

target important the synergies, cash profitability, for long-term have T-Mobile. It's not generation point out to and New changed that

leapfrogging and deliver the in We network the predatory incumbents. leader will tripling more our continue while strategy T-Mobile mid-band. become This a capability and to that low billion nationwide New us in synergy, to expect XG, customer the competition Un-carrier total to almost merger enable $XX will supercharge share positions take holdings in from This aggressively than in and network spectrum the capability experience.

thousands creation our New can’t lower T-Mobile deliver value jobs new and transforming of lives one, we positive network, across on of the prices even unrivaled nation's will best America, day the ways imagine. net support in customers' from and

is lining -- silver deal coming time than the prepare we had to the that for closing the taken has planned, closing longer while deal Now, have the more integration.

for integration We're remain We closing. complete working start after hard detailed spectrum X.X-gigahertz we have soon final the and and optimistic. preparing deploying confident we are Sprint's plans steps to merger, to the and

of the review, well to decree assets spectrum you as as the final the for Act still prepaid supporting into entering included know. that from wireless a consent DISH's July, in vote and businesses DISH, rapid majority the the into to the most of we Sprint all late merger entry DOJ from addition is upon the consent FCC, of market. to The as XXX-megahertz In received DoJ subject clearance Tunney divestiture Sprint's decree

increased off came the joined Florida and support have State Colorado of complaint. their total, benefits competition, governments, jobs, of expressed highlighting State state green given On this In the such month, and XX affordability, merger access. the PUCs note, governments AG rural PUCs for this deal for now AGs, settlement, Mississippi new coverage, have that the XX and/or as fixed light. the wireless Earlier state broadband DOJ XX and competition

We leaders benefits lot their of a the and this that transaction beyond. deliver in state for have recognize will that consumers

many XXXX. state continue on begin set Now, the to be as and we be will are AG to the you know, AGs. open the merger state We meantime, permitted X. close in now In having the early is discussions December with to expect trial to

QX me results. dive these let into Now, blockbuster

per added continue XXX,XXX phone wide to despite these lead industry the being by in branded Un-carrier the total great phone quarter. We million X.X and X postpaid customers, customers. makes That a than delivered have the more in results million total had in another competitive quarters QX, talk margin. up postpaid adds customer quarter net joined marketplace. we a We in row customers growth let's movement net First, XX XXX,XXX year-over-year. that this

ever favor. numbers customers business Wireless with coming AT&T staying longer a before. and year-over-year. industry churn in low and we shows fourth is QX, that a are of as for for them changes company customers only QX beat row. record a in We also to quarter postpaid treats had of points this down the up branded Not right And their rules in X.XX%, clearly the XX low the do record want than a our phone this churn basis

low QX industry. churn postpaid was also was which a the in best X.XX%, was for overall the record and Our

In a of growth were XX,XXX, strong additions We in beat for customer branded supported net prepaid strong and we additions Verizon XX,XXX customer quarter from QX, net postpaid million, customers. fifth Branded by in quarter other postpaid row. continued X.X in third a in a up had XXXX. row fact, AT&T a for

Service year-over-year, record a year-over-year. for hit I've EBITDA record high $X.X reaching X% revenues branded X% highlight revenues Next, growing a QX grew record year-over-year despite to billion, sales. of QX $XX.X results. hit equipment Total adjusted postpaid record EPS $X.X to up XX% $XXX grew high in We all-time financial operating came got free billion, income and our a and highs XX% revenues billion, was million, year-over-year. up billion, was $X.XX, year-over-year. year-over-year. XX% fully activities by lower $X.X X% also cash QX up both net record highs, and at $X.X record provided up Net high, And flow diluted X% was cash QX and billion X% year-over-year

Okay, network a let's talk moment. for

an and have our building engineering that may announced you his initial pace running If out layer incredible week Neville for heard news have last the that team at been XG. he

we launch that we announced nationwide layer to of build-out plan foundational and fact, our In this XG accelerating are the year.

POPs foundation and nearly X,XXX the Puerto and X.X towns cities network, deployment live states it's Our today. covers XXX-megahertz million and spectrum XG our will in XXX and be XX in miles This for square million Rico.

thousands as T-Mobile, the be today. are be foundation of band Pro XG of no XG and than cake that towers million of a already a on have now up One year. recently or compatible signal and network plan including launch be this nationwide XG to spectrum for XX sites XXX of New will a of the cell more strong on game-changer the that lighting other capable coverage XG consumers. on XG McLaren XT for We megahertz will We reliable. ready XG spectrum, overall and megahertz for our smartphones, megahertz network devices million than our high on available More compatible XXX are footprint of layer part This layer XG POPs later Plus low, announced will exclusive with XXX mid XXX

blocked indoors and network and able work New XG performance. is and more industry-leading people and LTE deliver in things out by coverage more glass, be T-Mobile's this nationwide can places our walls, we cover continue expand and be and current all AT&T's which while like to XG to unlike Verizon will XG leaves, networks,

We've now and now covered caught XXX Verizon, megahertz, with XX% low population. XG XXX band have both covered And Americans by up the combined. to nearly million million AT&T have spectrum, we and XXX Americans XXX of U.S. megahertz LTE, and

can't the So our network progress XG make to consumers. continue of get great on needless to say, wait we and to hands into

an And changing new the wireless for good. network the to spent T-Mobile, of with to of last we're capabilities better seven carrier the entirely New going take on We part level. years

mean some I calendars, more because mark going say we our plans we are we won't any your of right, New our on sharing think X, to X, next it's commitments stay please and November some what I time announce first for level. the So start the Un-carrier but today, sharing T-Mobile, New tuned. for That's X.X. Un-carrier of future. November move T-Mobile, by

excited up; wrap be I this quarter. to more about our couldn't Okay, performance

and unprecedented Sprint work XXXX continue was beat momentum closing as for performance. We T-Mobile our postpaid do phone gain deliver our share and record blockbuster quarter another without and results. towards we merger our QX business a financial to with in continues skipping so

Circle our Our XXXX. we your X November remain on increased outlook confident guidance calendar. that shows in for

want You to won't miss it.

Carter, and through to us Okay, the the year. for time to take CFO, ask financials our of remainder Braxton? the guidance Braxton

Braxton Carter

excited prospects Thanks, well to continue John. be excellence. the for our New operational T-Mobile as about continued I as so

X% of some interest both a income million from for record and The the the income of operating XX% expense. Net amounted QX. details of diluted financial up higher tax into QX was get Net $X.XX, me share year-over-year. earnings benefited a to and effective lower Let to quarter. rate $XXX amounted per income

before adjusted EPS up to and EBITDA range $XXX tax as the These billion, burdened fully $X.XX were a million expect a after-taxes, we XX% $XXX in year. in per costs merger-related third an million respectively. versus share prior by to XXXX a from included and effective whole, leasing are amounted EBITDA. of excluded $XXX XX%. that quarter For the continue the $XXX income Note of to revenues costs rate Adjusted of QX Sprint net in $X.X the record million X% taxes million of

Recall benefited reflection adjusted strong rollout a continued Cost of spectrum. a by the service cost increased of from SG&A. is XXX $XXX in of just revenues reimbursements especially XXXX megahertz services QX points hurricane-related EBITDA million EBITDA of percentage rapid of a costs. net that for as year-over-year XX despite basis of performance management, adjusted The

to a expected, was ramp services cost this As of sequential there roll-out. significant in due

revenues percentage a basis merger-related despite decreased by service in year-over-year XX as of the increase costs. points SG&A

provided year-over-year Excluding merger-related from basis by cash billion. due new decreased by $XX revenue XXX QX billion to in XX% increase million Free XX% standard in from cash to points offset Free of activities, last of the capex commissions costs, of the increased in to amortization the a flow SG&A cash an by despite payments. XX% cash Sprint net increase million operating the included year-over-year $X.X $XXX relative year. recognition related by to partially merger flow $X.X headwind

$X.X these would free payments, billion. been flow cash Excluding have merger-related

$XX.XX amounted year-over-year. sequentially postpaid to QX, Branded ARPU in and flat both phone essentially

This for envelope. be to in to phone customers non-reoccurring stash plans. This a year-over-year by was postpaid a our stable ARPU reduction branded X.X% XXXX sequential of decrease compared within and driven expect to full-year We the XXXX have QX X.X% to in implies decline as down full-year generally in unlimited to a transitioned data part XXXX. related impacted non-cash, benefit approximately majority

XXXX. customer and losses of compared total X.XX% outstanding. nine the our of quarter the million revenues and included of quarter. in quality, Bad continued to from terms debt quarter X.XX% $XXX million fourth were in third sales or to the from a Total seasonal of one-time benefits we expense, In -- $XXX expect the or uptick be in third certain debt, total quarter receivables results bad revenues third of

Now, our to get me XXXX guidance. let

of our significantly seen be This the switcher growth takes long-term account postpaid a from up pursuit additions customer profitability, balance million to adjacencies. our X.X branded to X.X expect million we've strategy X.X net lower volume guidance million. growth and recent guidance million, in and of in between the into of to prior quarters We continuation X.X

expansion, rollouts. revenues leasing guidance. XXXX, megahertz million This $XXX We in billion $XX.X unchanged into from particular, expect in our and $X.X of into range $XXX to It midpoint adjusted account to EBITDA million to our of guidance XG the guidance the prior billion range also billion. billion, takes takes in prior $XX.X XX.X account network increasing XXX be from to of the

$XXX to now to $XXX will costs expected We merger again from capex will $XXX Pre-close quarter. costs These $XXX $X.X impact to income million net adjusted EBITDA, before but billion to are flows. $X excluded in with million fourth later of the up XXXX. The includes billion, high is expected Sprint from between be the $XXX cash target to the guidance million be to million to and our This taxes of reflects to XXX related now end interest, guidance plans range. approximately launch megahertz POPs foundation network which in this capex prior million XXX setting for rapid first rollout XG amount more than of our year. the million accelerated capitalized nationwide higher our cash

the XXXX at to from operating XX% to XXXX, We to from provided the be flow to the net underlying cash XX% in activities unchanged expected with is of CAGR XX% prior cash full-year XX% XX%. increase free from full-year for expect CAGR The to cash range, step-up a three-year to continue to even XX%, up capex. by now

Our cash from securitization does guidance forward costs. CAGR cash merger-related payments any going free flow inflows excludes assume it from not material and

around get questions. to Now, we let's XXX, Auction questions cannot upcoming related auction. the to that to this note millimeter-wave your that's quiet answer the Please period any due auction,

questions question, or start we'll via can phone You on phone. via with Operator, first And ask the question Twitter. the please?

Operator

from Citi. [Operator Michael sir. Rollins of first you, our take Thank Instructions] question We'll

Michael Rollins

Thanks, two questions.

are of in in productivity they're taking? there address types customers litigation? learning or X.X New there First, and the more different opportunity from with talk or potentially those terms that plans regards a for And seeing the to or concerns? of And secondly, if of Thanks. quarter, state the about is AGs, the some are an sales questions bit you're to a process pushbacks the anything common concerns with the couple the can the coming what with involved Un-carrier the that then you're are where of you little for T-Mobile states across about

Mike Sievert

the has on into greenfield want I absolutely, What's that into three you're Mike. and to question last families, the quarters, prime you the towns, like saw first, I'll two a progress like Americans trend suburban quick military. big just been No in older segments suburbs, our into jump And with seeing productivity a for then that and into the continued Sure. -- continue. the changes going overview, here. take and or is

again, said business at postpaid we look churn you saw whole a only more lowest we levels in QX something industry, we focus comments, as which at record than this ever overall lower postpaid QX, Verizon, lower the low And normally when John best seen was also for AT&T. were phones, the not the we've disclose, quarter, You than his the churn. is on in not our

activation translate and you is takes to off see that some business, engine pressure in So to efficiencies the see. terrific which can into that our start

responders. saving for on a mold of it quite quarters breakthrough and doubled we new Today, follows and excited really I time on this make very at families an that can been morning, first think incredible offer strategy well that This our for military for down for families first that about of of a we've a by our our same which strategy, successful really now difference with for few focusing doing responders. winning amount military, doing And same kind minds, great doing continuation proposition of value work of really and hearts and turned them we that money. with really we're And and good. attention

first one. the that's So

John Legere

Yes.

tell Senate can a FCC year been agree attorney generals. and things it's and now or the that state the in the on states are half violently important whether the the it's Congress I the what been important question, agree -- things second the DOJ, the or that New you, can fascinating of to We violently T-Mobile and On are do. a all and all

them, these as general with able is state concerns Mississippi to you've individual a and that investment and DISH speak low around once agencies positioning those. to center concerns consent the around important agencies, deal, very and the about Colorado and with they if expert to see and of have both that federal you to competitive ensuring have the broadband very seen their -- end and pricing rural to for can them, so be they've things attorneys the think concerned coverage been certainly decree that what approved pricing, They aggressive the the what continue about have So, you it's And which and now that. about we've discussions and the been and about nationally we XG they good build is this for approved player, committed we competition, have recently been are market. as on XG about build continue been are do and XG, to about tailored

with your the kinds very either where very to confident settlement feel and case good good having headed. items And well, will we powerful to they're start main the are in And T-Mobile that we that about do, So, point, the as question. process and plans or an going feel will will of well. a conversations even we the they that the whether they things move and discussion to of trial very seen or certainly New unveil, the of the answer it'd signal the be because Un-carrier states

as fashion, remain all confident So, may November to And of about in coming good tuned, discussions yes, very add the stay the I continue, might and X, we a bit conversation. we it's I that think, T-Mobile. together New said, and -- little the creation optimistic

Michael Rollins

Thank you.

Mike Sievert

Thanks, Mike.

Operator

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

Simon Flannery

on where for just to And about what think how there? you you size opportunity Thank the and you. is? to to responder, today the you think it's first us, there something back expectation going Great, coming this Mike very over the to million what's had Braxton and the to not done being build-out, from if sure think, on, few front-end but XXX on get $XXX just Neville the capex to loaded, more $XXX here much. next pacing comments slower thanks opportunity that go so question million, referred the be then I A I'm could Is we have and what should quarters? you've your

Mike Sievert

an the Neville million… at Doesn't for least $XXX attaboy get

John Legere

million. it's Already $XXX

Mike Sievert

yes. know. I speakers]…in Miami, [Multiple

Simon Flannery

Yes. Congratulations, Neville. Yes.

Mike Sievert

and adding the footprint phone to million million number starting to the XXX pleased the I and band really very in made can LTE megahertz. we people continue that XXX megahertz of that band now it And last of covered hands we've we we of the XXX to assembled like with more consumer, And three the lot more bring that then phenomenon to and years. that with John really low the we've this U.S. progress to XG. customers XX four with XXX new we're their spectrum as over it's mean, referenced in on benefits Obviously, a low now megahertz. reap grow both

times, said layer this As many T-Mobile. or we the New with the the layer cake, is foundational

critical what can plan With we Sprint, do. combined fabulous what As we to we excited super with to it's that about combination, bring.

And slowdown so, yes, to megahertz. on your XXX no question,

our As we we leverage, remember, commitments footprint into others to FCC can obviously XG XXXX, coast fully key the a to part we to to and many that have LTE. and build mean, of the made terms we've that across here move of look continue that I services build-out nationwide, it's And we of nation. out in and coast spectrum the

just we're ago, the put so FCC the great almost have that real in original the place spectrum. that coming within big With footprint. the to clear not outside rural work that much three on in major country broadcasters to ahead specifically that sitting us for benefit of are in, the Big, building and been done years was because this We've in compared metros partnership on push of from rural. we this thing and now, across in but materially metros, the schedule through in schedule with

it. on building. we're So, We're

it be We through again at in XXXX. the back now, and building we'll are quarter, we're building

John Legere

first Simon, Staneff about Officer. talk the little Marketing bit more can is you Maybe, Matt here a our, Matt, And responders. Chief

Matt Staneff

great. Simon. Yes, Hi,

in first came XX+ an compelling we about large like and in we have approach haven't is the offering both now. this, approaching I we're consumers stronger did way a the aggressive has. what as Like in don't with we those with first way the marketplace, fact than share think to Military. the responders' as that robust marketplace more very in; the responders to we we So competition a Unlimited They're coming that segments serve had do same we that for way in military, offer offer

responders it. But veterans. in to to quite expect we on results We are America the military similar say, but to business of similar same result won't see I see there expect the we than on segment, will less So the and degree outcomes. first whole, see

Simon Flannery

Okay. Thank you.

Operator

J.P. our you. Morgan. Thank Phil from of question take We'll next Cusick

Phil Cusick

the and of you we talk little Maybe a Thanks. leasing seem which you. higher update you me, have can doesn't going saying of square and And DISH that companies discussions of with build, to network further, any first that capex. XXX that you been that tower have the we on fit all? the megahertz, pulling with deployment can the think The give should then about Thank try Neville. how been guys speed some back, around -- us for your Can forward? about

Neville Ray

DISH lease? Somebody want to take the

John Legere

Yes.

first the do You part.

Neville Ray

Yes.

So, ahead the XXX envelope. very I had field the modulating for time we're is that's in the year. of on activity at just capital that plan, Phil, megahertz, that modifying clearly we this or goals ahead and of in us we're mean working towards point And any

we are cash Braxton, You from mean I for capex year. the above plan heard on

done a account. running have And to sense do take X,XXX we than more these XXXX. miles not into when us considerations an at keep we've to other just So hour we to plan it inside for makes lot

going the before ahead do a the plan first nationwide the key we're of That's can to to be for as what XG we're the of with here. in year. end up I building, light we T-Mobile and part network New be opportunity that what of delighted here still delighted the said, will U.S. us

Mike Sievert

Yes. me add, let And Phil.

the needle is of long-term that more as megahertz quickly our philosophy that a the the our has a commitments capex. basis, threading And rollout a trying year-after-year know, loading all stakeholders. while front-end we in goodness on resulted of XXX to to of also possible deliver as make on the You bring of that we

next You'll year. trends see similar

all invested are we similar on just roll are in deploying our super that would the goodness XXX getting billion expect for full out I guidance we'll and megahertz. of excited, XXXX types the and have year-end we earnings $X as our of XG But We patterns call.

John Legere

Yes.

decree we some discussions potential spectrum. call the about consent second part the it's win-win, opportunity or megahertz having the as almost On XXX it found DISH been items a money. have real for the disclosed frankly, are with of and And cover, leasing a of

is potentially it's And from for a revenue so have stream to And is standpoint significant for DISH the can used. a right, spectrum positive it a of us a for chance their us before price especially if migration. impacts

is that So it's one we it's that and possibility never posted. for think good But never, say we're with interested last in. yet, year opportunity And the both that with at negotiating not thing in this keep experts win-win in case, DISH, a become difficult real said, process, but I is a we're so you sides. both there we'll done

Phil Cusick

Thanks, guys.

Operator

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

Jonathan Chaplin

or taking a Thanks your think if a you it John, into the negotiating from book, question. learnings best for I DISH put will become seller.

investment service? are increase out, that flattens making a for that'd XG, think The it to it A [ph]. question similar making next of of what's been Braxton, the site the then And there'll driving more trajectory in then trajectory for two readers you're or we've existing cost your of the with seen there be XXX as if what service that lots sites what's few course cells, or megahertz of you amendments you -- and sort of be actually. like a this And the finally, is count, there next cost of it -- -- -- another growing have is the network on on a do years? to that other you're flat. year of is up? three increasing years? over I you on increase without relatively Is put

Braxton Carter

And push great with question. to a got all and about geography last new dollar on that. the dual-banded phenomenon rapidly rolled could of XXX your of develop of it's the the answer to footprint. that out is increases to as Verizon XXX the full We we've megahertz. now and the radio U.S. we're that couple AT&T with of he in bit isn't done XXX equivalency cost and again was ecosystem the once and little deploying and out the visionary services. address the a years the this geographical over a software Yes, megahertz. absolute a question And megahertz -- a the the Neville rolling and OEM download What here was boast address XG Remember

We have more to work certainly do.

thank million a we XXX change both in POPs, have the will because well that's spectrum, overlaying permanent and back for upcoming have and continue the XXX here the obviously I been very, XG guidance we just period a base you're We're looking and we'll nationwide when a too that detailed Neville doing which extremely efficiently again to proposition. going thought of climbing megahertz towers investment, on out. have step this And and year-over-year. cost of we those but going at in very to as not want happen think is for a And heard unique and But You've give I the service the and would we're doing expensive coverage, on it have the really wherewithal, it's rollout the calls. last function of year. year-end

John Legere

areas on key just I Jonathan, I pile mainly... mean, said, everything the Braxton

Braxton Carter

The visionary partner.

John Legere

yes, ...the visionary he me partner, mentioned to obviously. --

the So on. we're and overlays and obviously, radio major a lease amendments so hanging new of driver that's so

And other we're backhaul. to material do the pace upgrading continue and small piece is, work We there. a cell

for XG We a are connectivity world. building here

is as sure of making ready backhaul board. the as radio to and that circuits, sure And on so And not a we've we done that end-to-end make story, our with just get this Sprint there we create mean, ourselves the radio we into multi-gig it's combine comes to work have enormous market, I traffic the capability and a it's also capability. supply need lot

play, bring so making can we're backhauls another and fully for now piece we of the And in opportunity sure that XXXX. after ready

Jonathan Chaplin

because that I'm Braxton, we'll don't explained heard question hear I down. and And Neville I glad in the I never somewhere ever original all I've think thought you towards slow those. used together, heard

Braxton Carter

[ph]. everyone For

Jonathan Chaplin

you, guys. Thank

Mike Sievert

Thanks, Jonathan.

Operator

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

Brett Feldman

consumers? you're mean, how I obviously racing do start question. to you on message XG willing spectrum How of the incorporate try Sprint's competitors you is of change terms to to curious ultimately, And deploying portfolio? the you in taking then coverage. your are for T-Mobile? that plan you. going deep thanks Yes, XG I'm Thank to benefits of XG ahead as consumers offer incentives to to

John Legere

clarify, in Just are said, to we of I coverage. we competitors hear XG racing that -- just that ahead you our -- Was can did wanted deploying right?

Brett Feldman

Correct.

Mike Sievert

Yes.

Brett Feldman

Yes.

John Legere

with few come ideas. we've a up Actually,

label it we're of we we've our XGE, refusing maps. it in we've XG, matter First where to decided all, to and deploy no show that decided

So outside to? ways. But you of two those would now Mike, yes, innovative want

Mike Sievert

very about as to XG, in I to people well again XXX devices a things. the for I'd opportunity One and adopt aligned. of technology that big you you're just a how mainstream that Well, were hands. as the talking your right devices, that say that question, responsibly I have technology result, technology now partners of million think consumers, the that We're think your LTE last is, their we seeing the major with about now you bodes to get the XXX to devices megahertz. when year, have with big the our as we our delighted a can megahertz power future we with last on were get think can with and get saw And quickly which the couple flagship we benefit able us XX ecosystem in our partners

it's I going And people try take don't incentives XG. move get T-Mobile to to to it to enthusiastically. They're to very going think

in premise so in want competitors. towards your that's to bet -- you going combine is New as consumers it strategy a change is everywhere, very the broad And Verizon as strategy journey capacity making saying, where the to our that is journey a to John look nationwide look XG and They're beginning most profound our about going When different T-Mobile, that going and -- maps. the of that really don't limited just nationwide versions in deal a was question. for of the only XG in so use work places cases that and will with from in we're places, particular, both is doing our the places network ways. that people Our very some that with at talking we're were back of willing XG speeds work can transformational versus to and works and with the

innovations. all early can you everywhere. broad both innovators on little relies thing are somebody and tell deep, that's a applications choose to close It's and as that's But the having the network predict one been XG I that to to software, going

T-Mobile XG to a designed New capacity of inspire LTE. everywhere more think and few Verizon's network thinking, the be don't same the innovation I else, way to going that are our you'll see of to people mobile relegated -- that than high we're want cases places of be some the going use very to kind inspire. You're way to that is which in that see will to thinking T-Mobile

John Legere

face. -- to And going I'm mean don't why, coming are questions thinking handle and know I I the of in it's steering something Walter -- right say, I the and of take @BuzzLightYear. in because know -- or it's your in one I Twitter that at new just the -- them [ph], but still looking keep don't have @WaltLightShed, one why. two I'm of at I to

of cool. that to of last the in to to I think everything we I I'm in be are merger TMUS steps touch this agreement that working need release about date. that merger about say of And Sprint XXXX. a and able feedback, focused questions. complete in, says Walt, kind close that currently expires diligently that's press that give think remaining to the on you we one very no early came I going of extension Friday. your Sprint would on kind question There on to And comment is But

see. Let's

Bill Do to question -- one in Bill questions, has a Ho's about you -- is, been take maybe. take interesting want Yes. and diligent center it's -- prepaid, we time last of

landscape to that So and sent one Bill strategy. about the in changes for quarters, seems many of lost in big prepaid is, and competitive the edge any growth, questions have prepaid talk its

much the and -- I'll prepaid for that just the expense and industry on. not think probably brief if so say great been want something. that's It's has It's lost growing overall. of you prepaid has to something I that Matt, at pile postpaid

positive different postpaid the we're are conditions much really the just are as therefore that aren't that postpaid has two things. one things trends They are industry parts and strong seeing that grow else seeing. at of very economic More by qualifying anything these So fueled people prepaid. two you're of for as expense

postpaid other prepaid added there Two is and net to half adds. the and market seen also ago, years the have at we've come dynamic in cable no away The were cable they entrants over year the last side. a chipped and have

except more Now, they Verizon, you of major when you had and adds three add take the anybody, the net most second up cable reliably than players, T-Mobile.

of So dynamic prepaid. postpaid expense another caused has that's at the to that grow

industry to there on anything dynamic? Matt, add

Matt Staneff

we've talked on The is, these and taking strategy been Yes. prepaid one of our of consistently that Mike one business in the about, market growing face pretty there. in share competing segment is add every consistently I'll only things, thing our

that thing this highs. thing record other that's scores financing other seek are to device -- credit etc. like continuing We at The know I'll that expansion. is expand long is on things the been customers Credit occurring are

we're I the and positioned environment in to believe changes environment, to well in continue postpaid. as well as space compete the So prepaid this

John Legere

Okay. Operator?

Operator

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

Craig Moffett

a the hi. number was Difficulty]. Yes, -- by large have Sprint The FCC of to found [Technical be to

Mike Sievert

lost there. Craig, you're we know I if you. still don't

Operator

Mr. Moffett, are still with us?

Nils Paellmann

one. to let's We if… come back Okay, the to go next can Craig,

Mike Sievert

us. had I for tag my even hoping of really the be get he cup morning, is for already earnings, before [indiscernible]. a that not up is I on $XX, bet that a an Craig strategy. And positively coffee was got to he this phone was cynical I hope And line that found similarly there am in amazing. that And come out hoping complement is with I he AT&T to store And AT&T's thing would which has second I

back next operator, come the but fear let's and, question. participant, I we'll the take to Okay, next --

Operator

of take Walter our We'll [ph] from LightShed. sir. next Yes, question

Unidentified Analyst

longer with I guess. bit John. taken Neville. has deal a hoped, start Thanks, obviously The to going I'm than we all had

So to I Ray, huge all investing that of expecting swap time, be think spectrum. -- and X.X this we're in

So that money going or if which at XXX a on B, go, up first where if be you X.X deal megahertz, this have mid-band in bands investments? be other early Obviously, of perhaps to the the will you're should approved, to continue look think but do versus looking to does we'll the spectrum into continues you to spectrum plan thing which your invest spectrum? XXXX isn't drag at terms in

Neville Ray

been plan combining it's -- about only even I'm in that's with the here friend tent rapidly so ever roll going there, has. our And head he floats be time Sprint. and as all X.X you Sprint long ways, -- the the one in there's my And I spectrum because more to out gigahertz not was than is to jurisdictional sure and -- processes. pole my Walt, said, radio has team some mean prepared

it's position my That's are mix, as the where said, all we start know So others the continued our all a layer. and with on work head. in about our I to we'll sits spectrum megahertz to that and in deal story. you we But spectrum. combining we Sprint. continue that as deploy millimeter-wave We've rapidly with closure, can is XXX said -- foundational

Unidentified Analyst

if it's kind below great some diminishing Mike, churn to low. flow and some last there growing, in obviously mean, is going churn obviously, you're And then Got lower. marginal it be I there back you'll of Verizon year, to under terms year, a was T, other get that the in improvement, the obviously, huge adds, probably ebb, and this getting XXXX and they're years churn. then soon, it. returns And the obviously so been go the of you -- gross your has years but getting churn

T-Mobile about a far pull of can? this you lower should we XXXX that year? Or as add at churn adds Should think trajectory thing. look we we about XXXX? should as the So be phone given gross the forward, as I Un-carrier bigger going net New mean talked as far postpaid lever just you kind on

Mike Sievert

on on the have trends, just that's time. some But XXXX Well, we'll churn. mean, guide a than better churn tailwinds had I you're right. appropriate right, One, we we've broad now phenomenal at AT&T's. couple the of

line Verizon's. is in with Our churn

Verizon's. total at postpaid, look you actually below it's If

have the So [ph] we're handsets, that customers the a $XXX arriving have $XXX we go. of of XXX we tailwinds are industry And a And Neville that's million lot -- megahertz, of best. epic, customers, to aware that industry to necessarily suggest arriving on but at at million best. million not don't. lot are million leaves to be said that some XX

benefit continue lots the of side, the can of So to that network on on benefit bring experience the side there's customer fore. we to lots

that good decreases, were are to market. the with net a of we if the happen, a market. it as don't experiencing industry the that share the and activations, bad. today, the We is this so versus and win that the Take we're that piece we we or side have And other And winner hand, news low churn, phones good XG other. other which but on elevated the switching adds as in you see and potential is spend cycle The many one there'll structural it heavily upgrades have on of elevated chance in know, more XXXX super opportunity. and good way our to activations is both gross to be

the there if hand to parts the we so, next reductions look churn hand. can go in happen And aren't equation year, of in to growth like two because structural other activations

quarter. as the compete the it's phone how higher So and we churn net low structural activations, both real this took whether of to a And competitive continue saw, question thrive, long millimeter we be churn of do able to equation, is, structural churn as sides XX% we'll a in [ph]; quarter. adds you we and quarter postpaid a then as a can manage the or

John Legere

on typing in the way, whilst want out call, I Operator? questions multiple the questions asking By just to while he's online. point that more

Unidentified Analyst

line, wait you get, California John, let's one say, before you the want to on If on for CPUC. I them? on and because board, one the going York again -- New onboard, sneak John to waiting last are CPUC, just for or one

John Legere

Miller. Go ahead, Dave

David Miller

that question. timely be It's confident on No, the mic CPUC in obtained for fashion. a my here. approvals Thanks the will we're

Unidentified Analyst

I'm thanks. answer, but the not relates right. All great to okay. Thanks. a loyal such was question, sure That

David Miller

right. All

John Legere

do timelines up. they The look of sort like line

Mike Sievert

I is Craig Moffett hear Okay. Operator? that back.

Operator

sir. Yes,

Moffett. Craig from question next Our

Craig Moffett

the dropped, think and penalty liability? fraudulent, as accounts might how by $X.X per about fraudulent could up if it -- inquiry large to a have and was that FTC Sprint anything be that there if of merger you fact in wireless be how Sprint. I SEC, found in sadly. disposition might anyway much and that to to Verizon new call affect in which the I line about the significant account learned be ask could $X,XXX about lifeline wanted at per billion. Have found a the is or is number a of as to

John Legere

Yes.

going think, to Craig, comment to to that on ongoing not what have investigation say I'm I'm not company's yet. is going I another that's closed

Craig Moffett

a Can in the the -- you affect liability way? that would any event hypothetical as merger there a the say it just in in is

John Legere

Yes.

think comment not to I Apologize that. going on I'm this topic. for

Craig Moffett

enough. Okay, fair

Mike Sievert

Okay. Operator?

Operator

take question We'll next Venkateshwar of our you. Barclays. Kannan Thank from

Kannan Venkateshwar

strategy, a go-to-market a I Verizon with action when the announced we deal around first, the look course been Disney+. guess lot has there couple, I of Thank this you. at video. mean XG bundling recently

you deals and Viacom. a have with QB guys and you signed deal with think I Netflix,

a into about on how you fits thinking overall your when broadly could about XG and you with of video think just your expand strategy, plans it, as that the layer you're strategy? three So forward part going how

you a from a there to question outside there to are renegotiate secondly, thinking comes I the deal something about just the perspective, other that deal? Thank cause you. asked, Sprint we're Craig when that price of from price mean, would perspective is it the And variables

John Legere

start comment things. substance and video. upfront just one offers isn't the I about I brought the discussion that can lifetime glad Netflix. by Let's do Mike saying year I'm substantive same. same because Length of the absolutely would would first Disney a isn't a value of I'll -- couple start I you isn't give that a mean, more is offer of versus and a there certainly, of for same, the comparison no then the

good at But creating I this it's the Mermaid Un-carrier journey, be be something last Little copy that the and job where XX all throughout And competitors make authentic, horrific out copy nonetheless, vice Verizon. it the makes of of nine something a our with we you to people president Verizon checked watch a than did going cartoons the looked this Disney, of difference By and week Disney at one. on Netflix, how it. see And permanent, us So think seen our paste job to I other great wireless But success will we're not it's know, over Verizon way, exactly time decisions. a it. poor don't like we've took to a about flattering you I something something don't that's statement bold, we do looks doing and people's This it. Disney+ think copying a service. then a about scramble did isn't is a something statement last big And what lives. a such saw certainly

Mike Sievert

Or by me. just

John Legere

that and and a consumption. video in they moves live video a start see moves, have what one Since they us, our there. are so made -- working. ago, our customers And Un-carrier it's a famous that that to we'll does subscriptions, in understand happens But our our that it we love have of most terrifically something And believe been and and Netflix shows moves their mobile it's on their to in successful. Yes. half people as us, indicate copy we year it for their role

has with the be and to partnership See, them. by emboldened at the a Meg with the excited and led We steps we're us as premise strategy. Quibi, initiative of very the we your partnered next formed strategic about Whitman, in Jeffrey question, Katzenberg, announced by think that

plenty partnership, there on going faced got video, this in an And a and them of because great a helping the world mobile-focused. You have they itself. really opportunities, choices. that mentioned of role as them helping our OTT authenticate, beginning be them helping in this and is our play Netflix strategy that for And with helping right in Netflix exciting pay it's T video that shown choose, on world the consumers It's to based us us you vision more one. Viacom but value. trust think brand confusing are we through we they're from It's choices taking bringing a here. see and to we've changing, strategy area great them their on great And customers make us with

Mike Sievert

that issues if if those. issues And we do we'll these transaction the probably really the we close that work any way. been they've have but will have been first part, pop us final this any time, handling couple new report work as of and items important partners to that Yes. working have these come to a things But I not We've T-Mobile. great cooperative line across And the with need partner, are Sprint. any deadlines, together being the say finish questions. get we on But up A together, partner invasive, I'm are in you'll expect sure those. on and there we discussions kind didn't and a fairness them of solve the these these we'll anything of in diligently any up, of of with with announce, some associated hear. that's these are certainly and And for to you a long create be second answer really and side-by-side issues a not items to working to that would that of on publicly. very to

Kannan Venkateshwar

Thank you.

Operator

Synesael Colby Cowen. from question next our take of We'll you. Thank

Colby Synesael

Great, thank you.

Just one.

have How focus Some really ARPU, how few big might a through next of And you that's other at look of for ARPU the that? the you. doing different to competitors continues so been and last lift, when years to or growth a it's of Thank come focusing ARPU the over your they or about important on late to which I of plans down. you, through driving offer. come variety fees go able unlimited year be your whether come is

Braxton Carter

Yes.

right past look to as in this at we've stable -- You and the that's talked is And know we're about Colby, generally this way of it's times strategy plus pursuing ARPU. to the numerous minus X%. defined a

going to deliberate X% minus be doing today that like That's minus dilutive into things the for value significant gave when consistent strategy, ramping been just that's profit segment well the what years, ARPU, be a We balance two this than the penetration, a we're our guidance worth really increasing trade-off is -- that we've might generation But drives And the between last we're demonstrated full-year. less MPV to an think years business. the growth that but it's and X%. making. I CLV of here. in profitability over true higher a cash For

If That's be we were a probably that's scale predatory duopoly, yes, what what we'll not we're doing. doing.

this scale a stop. of potential this going continuing not long-term have inorganically, mean and they amazing We to business how it's from philosophy organically stated team, very year. with and the I'm unlock coming and proud pleased are margin I we're to or executed

John Legere

they brand always did. -- Braxton, price we've are as on a duopoly and more in raising consistently we industry, we very why not think are I or are the at in providing believe leisure the made I reason less, ARPU their wireless the

things to do. that we the refer will Some of you not

We will big not go simply and add trickery the taxes ARPUs, to revenues doing. are no fees like aimless guys or raise

with customers role And they're buying in I of look wireless no That's to into forward Pretty cable the players, a that because, clearly here ARPU, that. that Verizon the that sure at think the gouging and they're what on customers and AT&T broadband, decide industry look if losing indiscriminately we more well. Un-carrier competition. we'll But raise it play, they We industry can't of to are. industry game. make is the unchecked like an industry of you that's role if like when when in what doing play what to going focused you this at is happens look and an broadband results as the is have example customers, those industry video just our a you much looks is

probably have think I more. one we Operator, Okay.

Operator

Thank We'll question next Guggenheim from take Mike McCormack of our Partners. you.

Mike McCormack

expect you then operators pretty competitor? as sort guys, cable of we a to seems good tell it in any there Hi, have comment, marketplace just good competitive other it's pretty John, XQ, Verizon for create react them little up How very off engine maybe this Thanks. a I on start turned view quick change like to there; in player pricing them. also you the quarter, that? best an impact guess to can you any point. and the the XQ, results the front, a [indiscernible] thanks. going had bit Do to seems And to a price is on mentioned

John Legere

the they to lot mean saw right. to two, of I you And a or the a point players. some just responded certainly right. Yes. what from market number what then out said, there's well But cable in

Charter was $XXX So net cash had that loss gained million was million. and EBITDA million XXX,XXX on $XXX revenue. additions. free They of loss their But the flow $XXX

able there that's XXX happened because is higher. with their But customer plans are associated thesis to all course, customers, -- so of that So All Optimum right? of in competition. the lack price early of Suddenlink know, on what price they base broadband them. to raise and the targeted wireless. it towards slightly Their And a were too of

early we too think yet. to call. that does have Certainly, New seen So T-Mobile we as a in haven't Sprint with Altice that it's But has well. I partnership the

not factors call, the at height most more Verizon and both Verizon's thing, of it's companies. Altice become cable And deep the to that earnings, wireless in I of too see, the driven partners, the their revenue so dug can Charter far. increase is wholesale, in came significant success One assume into early have their you if probably And by Comcast was a thus of industry. MVNO you from which really probably and

Mike? We item. think seriously. Anymore too tell, got keep eye to Altice, advantages. we'll them – So on certainly We this early interesting ran we've take very on. an competitive some And right it's through quarter. an anything, We but

Mike McCormack

great. That's

John Legere

Okay.

Mike Sievert

thanks, you then. for of with our and much tuning the you full-year Thank to very look next earnings, in. Well, We everyone Operator? Okay. forward in talk we'll quarter end you. to at speaking

Operator

US and T-Mobile XXXX Ladies Call. Quarter concludes the gentlemen, Earnings Third this

Thank any your the have you Investor you Relations Media for you may departments. or If contact participation. further questions

disconnect now may You and have pleasant day. a