T-Mobile US Inc (TMUS)

Share Buyback Strategy
Q: What's the plan for share buybacks going forward?
A: T-Mobile reevaluated its buyback strategy after the unexpected rise in share price. They are now executing more consistently in the marketplace and have been active in buybacks since the strategic change, while being thoughtful about various factors. -

EBITDA Guidance Increase
Q: What's driving the EBITDA guidance increase for the year?
A: The guidance increase is due to higher net adds, with raised forecasts for total postpaid and postpaid phone adds. A noncash spectrum swap gain of about $137 million also contributed, offset by a higher ACP decline and hurricane costs, resulting in a net increase in guidance. -

Future 6G Costs
Q: How do you view potential 6G cycle costs and impact on growth?
A: While it's premature, T-Mobile is optimistic about long-term trends. The next cycle may be more efficient due to advancements like AI RAN, potentially reducing deployment costs compared to prior cycles. They aim to drive future technologies that benefit T-Mobile customers. -

Pricing Strategy Balance
Q: With industry price increases sticking, will you focus more on pricing over volume growth?
A: T-Mobile emphasizes value, leading to leading service revenue growth. While they keep up with industry trends, they're cautious about risking their value proposition. Any future changes will align with their commitment to superior value for customers. -

Spectrum Strategy Updates
Q: What's the update on spectrum trading and plans for additional spectrum?
A: T-Mobile values spectrum for short, mid, and long term. They traded the 3.45 GHz spectrum as it's not part of their current plan and are satisfied with the outcome. The 800 MHz auction concluded without a qualifying bid, providing optionality to deploy or monetize it. -

U.S. Cellular Deal Progress
Q: How is the U.S. Cellular deal progressing?
A: The process is going well, with expected closure in 2025. Regulatory reviews are underway, and T-Mobile believes the deal will benefit consumers by leading to lower pricing and better coverage for all customers. -

Postpaid Net Add Guidance
Q: Is the [3 million] postpaid phone net add target conservative?
A: The approximate [3 million] target accounts for significant activity in the last months of Q4. While T-Mobile aims to outperform, they're cautious as the biggest months are ahead. Current quarter-to-date trends are strong and on plan. -

Consumer Wireless Outlook
Q: Are you concerned about a deceleration in consumer wireless gross adds?
A: T-Mobile doesn't see notable indicators of changes in consumer behavior or macroeconomic concerns. The essential nature of their service makes them less sensitive to such trends, and customers continue to pay at traditional norms. -

Handset Upgrade Cycle
Q: How are you preparing for a potential AI-driven handset upgrade cycle?
A: Current upgrade rates are low as customers' needs are met with existing devices. If there's a robust upgrade cycle, T-Mobile is well-positioned to win, having consistently won when there's increased switching due to new devices. They expect to benefit from future cycles. -

Fixed Wireless Trends
Q: With consistent - quarterly net adds, is your [12 million] aspiration achievable?
A: T-Mobile is confident in their fixed wireless product's potential. While current run rates require gross adds to grow to meet the [12 million] aspiration by 2028, they see strong customer satisfaction and competitive speeds matching cable providers. -

ARPU Growth Drivers
Q: Is the ARPU upside due to mix or price rise?
A: ARPU growth is driven by expanding customer relationships, including 5G home broadband and connected devices. Rate plan optimization was a minor factor; the 3% ARPA increase is mainly due to core customer expansion. -

Wholesale Revenue Outlook
Q: What's the outlook for wholesale revenue given ACP and Mint Mobile impacts?
A: T-Mobile expects wholesale and other service revenue to reach a trough in 2025, with underlying growth in wholesale partnerships. The ACP decline is expected towards the higher end of the $350 million to $450 million range previously given, and the transition of TracFone to Verizon continues. -

Network Upgrade Plans
Q: Can you comment on wireless network upgrade plans for next year?
A: T-Mobile uses a customer-driven coverage approach, utilizing AI to prioritize upgrades based on customer experience and business data. This allows efficient capital allocation, focusing on areas where customers value their build most, rather than broad priorities. -

SMRA Market Growth
Q: Update on penetration in SMRA markets?
A: T-Mobile is pleased with growth in smaller markets and rural areas, representing 40% of the market. Q3 exceeded Q2, which was their highest win share quarter ever, demonstrating strong customer advocacy and switching gains. -

Business Vertical Expansion
Q: Update on growth within the business vertical?
A: T-Mobile has beaten competitors in postpaid net adds and churn, seeing profitable growth across all segments. Significant customer wins include American Airlines, Lowe's, and several government and education entities, contributing to rising customer lifetime values. -

Digitalization Upside
Q: Can you quantify potential cost improvements from digitalization efforts?
A: T-Mobile outlined an ambitious plan at Capital Markets Day, signaling a 2027 core adjusted EBITDA about $10 billion above 2023 levels. Much of this is driven by revenue growth from digitalization, operational improvements, and preventing customer problems. Full achievement of KPIs may provide upside beyond guidance. -

DT Ownership Increase
Q: What's your understanding of DT's plans to increase T-Mobile ownership?
A: Deutsche Telekom mentioned wanting to increase their stake, but timing and method are up to them. Governance and board structure remain consistent, and they've been supportive of T-Mobile's strategy. -

AT&T Fiber Wholesale
Q: Would leveraging AT&T's wholesale fiber network make sense for you?
A: While the future is hard to predict, T-Mobile is open to all future constructs. They're excited about their own fiber plans and intend to compete vigorously, aiming to be first to fiber in their markets. -

Direct-to-Device Challenges
Q: Do challenges to your PCS spectrum use with Starlink pose a headwind?
A: T-Mobile doesn't see barriers to progress with their direct-to-device service. They're moving forward with beta testing, having successfully tested during hurricanes, and believe this is fundamentally good, proceeding despite FCC processes. -

ARPU Strength
Q: Postpaid phone ARPU is up more than expected; can you explain the strength?
A: T-Mobile now expects about 75 basis points year-over-year ARPU increase, slightly higher than the previously expected 0.5%. However, ARPU is mix-driven, so they focus on ARPA, which shows continued strength, leading to an increased guidance of 3% year-over-year growth. -