T-Mobile US, Inc. (TMUS) Earnings Call Transcript & Summary

Guys, disclosures available at the registration desk. Thank you for joining us for our next keynote. For those joining us via webcast, I'm Mike Rollins, and I cover the communications services and infrastructure categories here for Citi Research. And I'd like to welcome back the T-Mobile team to the conference which, as I look back at past agendas, this has become your recurring slot at the conference, so.

We like being the lunch entertainment, Mike. Yes.

And our audience appreciates that. So joining us, to my far left is Mike Sievert, President and CEO (sic) [ COO ] and future CEO of T-Mobile, starting on May 1. We've got Neville Ray, President, Technology; and Braxton Carter, Chief Financial Officer. Thank you all for joining us today.

Always a pleasure to be here.

Well, usually, we'll start off with a strategy question. However, you did put out a press release this morning. So before we maybe get to the high-level strategy and discussion, maybe you want to talk about the subscriber release that you had today? And maybe just you can expand on what drove the success of the -- whether you look at the phone net adds or the gross add performance that you reported?

Sure. I think most people probably had a chance to see them. It was just another fantastic quarter for us. And I'm so proud of the team that, for 7 quarters since this deal with Sprint has been pending, can you imagine, it's been 7 quarters now, we've reported since announcing the deal. We have continued to post over and over and over again all-time records for T-Mobile. Record financial performance, the best subscriber and revenue growth in the industry. Yet again, this quarter, it was 1.4 million branded net adds. We have 68 million branded net adds, now 86 million total subscribers. So it was a strong, strong quarter for us. More than 1 million of those being postpaid phones, the most coveted ones in the industry. So again, it's a great demonstration of the fact that our team is firing on all cylinders. We're able to simultaneously pursue this prize of combining with Sprint while delivering in the near term. And we told the market we would do that, but a lot of people had raised eyebrows a while back. AT&T and Verizon were telling everybody we'd spend the next 2 years distracted, and I think we've been able to show how we execute, and it's something we're really pleased with.

Let me add to that. Wait until you see the rest of the quarter. In 7 years, we've never not hit or exceeded our guidance, and we have no intentions whatsoever of reversing that trend. Just a beautiful quarter from every aspect, and we're definitely looking forward to reporting it. The 1 thing I could improve on, I wish churn was a little bit higher, and that may seem counterintuitive. And when we see everybody report for the year, we all know there's some seasonality to churn. But the hallmark of this quarter was a more competitive environment with more switching going on. And that's why you saw a 5% increase in our gross adds, and that reverses a trend from the balance of the year. And when you have the higher switching pool, i.e., churn's going up across the board, it is much more cost-effective for us to grow and scale this business, and hence, the big surprise, significantly exceeding consensus. And I'm sure we'll get into our outlook for the next year in phone super cycles. But remember, we're the challenger. It's easy math. The more switching, the more efficiently and effectively we could grow, and this was a wonderful quarter from our standpoint.

So just to clarify, when you say you want more churn, you want more churn in the industry?

In the industry. But that's by definition going to happen. Remember, we are already best-in-class, beating both AT&T and Verizon in postpaid phone churn. What happens with us, I think, we're the first people out. We do this every year for your conference so we can have full, transparent discussions. But we're really, really excited about a higher switching pool and the outlook for that during the next couple of years, and this quarter was a good example of it.

So let's maybe zoom out for a moment and get back to the sort of outlook for 2020. What are the strategic and operating priorities for this coming year?

That's pretty simple. I mean it's get this integration with Sprint underway in a very significant way. It's get off to the races in building the world's best 5G network, and it's turned those 2 things into great operating performance for the business and lay a foundation of growth under the context of the new company. We've been so clear for so long that this combination is about enabling a higher level of competition. It's about more competitive intensity, lower prices, better products and a more successful company financially. And there's no reason to wait. Because when you're building a very high-capacity network, you've got some capacity now, but you're building the highest capacity network this market has ever seen. That means in a sense, the cavalry's coming. And if the cavalry's coming, you can -- you execute now, because as Braxton's saying, our opportunity to grow is a function of churn. Churn's about 1% in this market. That means 1% of customers are available every month. You don't wait around. When the cavalry's coming, you're building that high-capacity network that Neville's leading, you get after it. And so that means go take some share. And a lot of those opportunities we've been talking about just become more significant opportunities in the combination scenario. So it's integration and synergy unlock. It's building the world's best 5G network, which is so closely associated with those synergies. And it's execute our operating plan and go take share from AT&T, Verizon, Big Cable and others.

Let's go to the live survey, get our audience involved. Go to the -- sorry, we'll get back to this one in a moment. If you go to the next question, please.

Look at the power you have, Mike. That's incredible. You made it go away. That part is for the conflict.

I love these surveys. Every year, I just can't wait to see the results.

It's the main reason Braxton comes back, your innovation around this.

So you guys do have remote controls, you're welcome to vote.

Can we vote? No, he'll fail to track our answers.

I told our whole full team in the front here to vote early and often, so I gave them all remotes.

We'll do with the next question of what the audience thinks your answers would be to this. So will Sprint and T-Mobile complete their merger? Yes, without additional concessions or divestitures? Yes, with additional concessions and/or divestitures, or no. And the survey says: 37%, yes, without additional concessions, divestitures; 30%, with; and 33%, no.

Come on. That's kind of boring, though. That's like a weather man telling you there's a 50% chance of rain. Should I bring the umbrella or not?

The good news is, it's a consensus. Yes, it's 73rd. I call it 73rd.

Come on, you can do better than that.

So tell us about the -- can you tell us about the court case? Or tell us how you think this could play out? Is there still time to settle? How do you think the court could get to a ruling, will come out with this? What can you share?

Yes. I'll start, I mean, and then you guys jump in. First of all, this may sound a little solicitous, but I just want to say I'm really proud of our team. Our team -- and by that, I mean, the internal and external lawyers at T-Mobile, Sprint, SoftBank and DT, have done a tremendous job making our case. And we know we have the case. We have the right case. Right is on our side. And as I said a minute ago, this merger will result in a more competitive market with lower prices, better products. And that will happen right away, not down the road. And I think our team did a phenomenal job making that case and backing it with facts. But we just have to see where it all shakes out. From a process standpoint, I think, most of you know, we made filings today or are making filings today and then the closing arguments are next week on Wednesday. And both sides will get a chance to summarize how they think the facts should be interpreted by the law. And we're very anxious to see the judge's verdict, and we feel confident that right's on our side.

Just -- so there's room to settle?

Well, of course. It's never off the table. I will say that through the process, we've been clear right from the beginning. And you saw it in our performance. You saw it with the settlement with the FCC. Again with the DOJ, we have 19 states that have spoken out either through settlements or other -- or their own rationale for the merger. And then some of those states were litigants in the beginning, and they settled with us. So all along, we've been an open book about what we'd be willing to do and that we were willing to negotiate. And yes, we're here. We're here at the end. And nothing's changed in our open book. And I will say, we've been very clear all along as to what we're willing to do and what we're not willing to do, keeping the value of this company and the opportunity in front of us for all of our stakeholders very clear. And so far, there hasn't been a settlement. But you never say never.

And maybe changing gears to 5G. Over the last couple of days, I can't remember exactly when, believe I saw an advertisement of T-Mobile with a national 5G map. Can you talk about, from each of your perspectives, maybe Neville, starting with you, what are you seeing? And what should customers expect from the technology of 5G that you are deploying and how this will evolve. And Mike, from your perspective, what's the go-to-market look like? Are we going to see a super cycle? And Braxton, how does T-Mobile get paid for 5G?

So let me start, Mike. I mean obviously, we're excited about the first nationwide launch of 5G, and that's our message on our advertising. It started before the end of the year. And I mean I'm personally very proud of the team and our execution. We accelerated that nationwide 5G launch from 2020 into 2019. And it wasn't just about building the network. It was making sure that we could have the silicon and the phones to work on that network and we successfully launched 2 great phones that are now in market and starting to sell and move. That all said, it's a low-band 5G layer that we've talked about many times. And for me, it's just the beginning. Mike referenced the world-class 5G network. That's what we want to be all about at T-Mobile. Close this transaction, complete that foundational layer on low-band. And then throw in the depths of this mid-band spectrum that we can secure through this combination with Sprint at 2.5 gigahertz. And so the breadth is coming along nicely. The depth is there to come with the transaction. And I want to be sitting here this time next year with you, talking about this tremendous network, which is literally kicking the ass out of AT&T and Verizon, because their plans cannot match what we can do with the combination with Sprint. We're ready to go. When you look at the experience that we can deliver, much faster capability on the phones, much broader reach than some very fragmented 5G strategies from our competition, I don't know how you ever compete with a nationwide map with millimeter wave, for example, which is the Verizon story right now. AT&T chasing our tail as fast as they can to get something up on low-band so they have a story to tell. But we want to be there delivering what we're all about, great mobility in wireless broadband. And so we've made a great start this year with launching that in 600 megahertz. As we combine with Sprint, that opportunity really increases. And the speeds and performance that folks are going to see on our network and on the devices that are coming in large numbers in 2020 is going to be incredibly exciting. And that's how we win, back to the point on churn and driving, switching opportunity in this marketplace. We can really go at that in 2020 and '21.

And back to Braxton's point about how we do what we say in this company. Just a quick commercial for Neville and his team, for anybody out there looking at this synergy plan and wondering what we're going to be able to deliver. This team has done it over and over and over again. You're going as far back as MetroPCS, which is actually a pretty analogous exercise. The team delivered a network integration years in advance, billions more in synergies than were committed. But look at what's just happened. When we spent all that money on 600 megahertz low-band spectrum, which was a big deal for a company of our size, we committed to a multiyear program of clearing that spectrum and then building against it. And we're so far ahead of schedule. Even the aspirations that we laid out at the beginning of '19, as Neville said, we said we'd be nationwide by the middle of '20. And yet, in the fourth quarter, we got there, months and months in advance. So here we sit with a nationwide 5G network ready to go. And simultaneously, the ecosystem has come along. Not only were those 4G LTE radios that Neville and team rolled out completely 5G compatible, now we've turned on that 5G layer with software upgrades. And the handsets are compatible as well because all that ecosystem work was being done simultaneously. So I think the really important prediction for people to have in mind is that in 2020, my personal view is that substantially all of the handsets, so mid-tier and up, will be totally compatible with our 5G strategy around mid-band and low-band. And only some of the handsets available in the marketplace will be compatible with the Verizon strategy that's centered on millimeter wave. And that's just going to make not only '19 as we got started and became the first nationwide 5G network, but it's going to make '20 and '21 very fascinating years.

Braxton, how does T-Mobile get paid? Is it just in market share? Or are there ARPU opportunities from 5G in the mobile side of the rollout?

Let me start with, I saw a really interesting analysis earlier this week that showed over the last 10 years, MetroPCS and TMUS returned 10x to our investors and far outstripped anybody in AT&T, be it media, be it towers, be it any of the other options. We are totally focused on creating value for our customers, our employees and all of our stakeholders. And I think our track record has been superb on that. To answer your question, the base business case on 5G is very simple. It's capacity. 5G is a spectral efficient technology that dramatically increases the capacity of the network, and is compounded, and again, this is kudos to Neville and his team. Incredible foresight. The whole deployment of the 600 megahertz with dual-band radios that were 5G compatible. So you touch the terra once and not twice. A focus over the last 3.5 years on making our fiber backhaul on the whole ran 5G proof, trading massive increases in bandwidth for term extensions with very low-cost curves. Neville has consistently -- I think he's the best CTO in the world, has consistently been ahead of the curve, which drives amazing cost efficiency into what we do. But the capacity standpoint, to allow us to continue to scale and leverage our fixed costs and close that margin gap, which is just leverage over a fixed cost in a highly capital-intensive business, between Verizon, AT&T and T-Mobile, this is a critical, critical piece of it, and it's truly the foundation. I have a picture in my office of Neville. And under, it says, the happiest CTO. And I have always believed that the investment to enable the differentiation that we've created with our network, and then what Mike did early in TMUS, with massive innovation and what John has done in taking a workforce that was down and out and getting everybody super enthused, I mean, the Un-carrier journey has just been incredible. But that capacity increase will more than pay for the investments that we put in.

And is 2020 going to be a super cycle for 5G devices to Braxton's earlier pointed about wanting a bigger churn pool. Or is it going to take more time into '21 or beyond to kind of get to that point for the consumer?

I mean I can start. I mean I think, for sure, as Mike has said, there's going to be a plethora of 5G devices, especially in sub-6 coming through 2020. I mean our plan is to drive the ecosystem really hard. We kind of broke them down at the end of last year, because the first devices we launched were FTD 5G, everything up until that point has been TDD. So silicon's now there, Qualcomm brought that forward for us. We were able to launch FTD phones in sub-6. And you can see, I heard this morning, there was one OEM launched a $400 5G sub-6 gigahertz phone today at CES. And so we're seeing price points move away from kind of the crazy expensive $1,400, $1,500 millimeter wave phone, which has a lot of complexity into it, bringing that into the sub-6 range at great price points. Silicon's now there, and so a lot of OEMs are moving into the space, I think. We're not just seeing it in phones. We're seeing some exciting news around laptops. Finally, right? Is this the era where we see every laptop that gets sold has got mobile connectivity embedded in it? Why not? I mean we should have had it for some time. Now it's going to happen in 5G. So there's all these opportunities for not just smartphone ecosystem to move at pace, but for all the different form factors of mobile connectivity and device ecosystem to accelerate. Is it going to be the transformative year in '20? I think for sure, the catalyst and the excitement's going to start moving. '21 is probably going to be bigger. But 2020, it starts for sure. And '19, it kind of started, right? But 2020 is going to be the real year we get out of the blocks as an industry.

Can I add to that with something that might sound flippant first. But I think one answer to, is 2020 going to be a super cycle or not is, it doesn't matter. In many respects, it just doesn't matter. And Braxton mentioned this a minute ago. One of the things we're most pleased about is that our model of how we compete works in periods of increasing competitive intensity, which we like. If there's a super cycle and churn is elevated across the industry, we know that we'll have disproportionate benefit because we're the ones building most rapidly network improvements, which have an offsetting effect on churn. But if churn is elevated in the industry, and it's a more competitively intense period and that's driven by a super cycle, amen. That we've proven over and over that we like those kinds of environments as the net share taker. If it's like the first 3 quarters of 2019, which we're a little bit more subdued, and we saw lengthening upgrade cycles and churn softening and lowering for everybody, we led the way, but churn being in a great spot for everybody. We showed we know how to execute in those environments as well. And in both cases, we're very comfortable. So we'll see what happens. But our model isn't really a function of how competitively intense the market is. And that's because we are the competition. We're the net share takers. And so I'm pleased with how that has worked out. One of the questions we got over and over during those periods of falling churn was, hey, where are your activations? Aren't your activations soft? Isn't that an issue, T-Mobile? And we're just like, we don't need them. We're leading the market down in churn. We have the most rapidly decreasing churn in the market. Why would we spend all that money on activations if we don't need them? And this quarter, it's a more competitively intense period. That means there's -- we're not the only ones facing that churn, we'll be up across the market. And we went out and grabbed the big year-over-year gain in activations to offset a slight increase in our own churn and delivered a fantastic quarter. And it shows you that our model is flexible, and we don't fear competition. Bring it on. We are the competition.

If we just -- please.

Yes. So I think it's going to be an evolution. But one other key factor is the extension of the handset life cycle, where we're now at 3-year average ownership in the U.S. and there is an obsolescence factor to these handsets. And I believe we're at the low point in the upgrade cycle. And I think it's going to continue over the next several years as 5G develops. As applications that utilize the full power of 5G develop, we're going to see higher switching, which is a beautiful thing for T-Mobile and new T-Mobile, which will still be a #3 in the marketplace. And we're ready to reap the benefits from that, so. A quick add-on.

Let's get back to our first live survey question, if we could, please. And I know now our audience had plenty of time to think about the answer to this question. How many postpaid phone net subscribers would stand-alone T-Mobile add in 2020? 2 million or less? Over 2 million to 2.5 million? 2.5 million to 3 million? Or over 3 million? Now to just give a little history, because I know you guide historically on total postpaid adds, but it's the phone adds that we're asking about. In '17, you did about 2.8 million. In '18, you did about 3.1 million. And if I looked at your page correctly this morning, I think you did about 3.1 million, again in 2019. So we'll go to our audience and ask what it may be for 2020. So 9%, 2 million or less; 15%, over 2 million to 2.5 million; 37%, 2.5 million to 3 million; 38%, over 3 million. So as you look at to the new year, Cable's now a bigger national presence in their marketing. Verizon's picked up their promotional activity. You're talking a little bit about their churn. As you look into the new year, whether it's -- what's happening on an industry level, or your game plan, how do you think about the response of the survey?

Yes. I think there's no particular need for us to provide guidance when we announce the quarter, so. We'll just ask this crowd. A couple of things. One is the -- we've seen some changes in the dynamic. By the way, our number against that was, just in the fourth quarter, was 1 million. Postpaid phones were 1 million in the fourth quarter. For those of you that said we'd do less than 2 million on the year, just put -- lodge that factoid. There's been some changes. One is, Cable has come in, and they have created a dynamic that's a little bit different than everybody predicted. And it does look like it has come disproportionately from Verizon. And so you've seen Verizon playing much harder than they have in the past. We've observed from our vantage point, both Q3 and Q4, Verizon was really swinging the bat in this market like we haven't seen in some years. And that's a different dynamic. That -- because they are the big gorilla, and they're swinging the bat much harder. We'll see what that looks like financially for them. I don't know, it looks really expensive, the kinds of things that they're doing. But 1 thing I can say is, it's not coming from us. In that same quarter, where they're just swinging the bat like we haven't seen in years, we delivered the performance that we announced this morning. So again, we're confident that our model works and our model resonates with consumers. One thing that I think's really interesting is, we delivered this performance in Q4. In a quarter -- and you mentioned this, Mike, in a quarter, where a big part -- bigger than in the past of our advertising wasn't on in-quarter promotions, which always has a suppressing effect when you decide to allocate some of your marketing to longer-term strategic messages around the quality of our network. The fact that we're leaders in nationwide 5G, that we're -- that the days of us having a disadvantage in network are over, that we're second to none, those kinds of messages. A big portion of our advertising was on that storyline in Q4, and we delivered those 1 million postpaid phones and 1.4 million overall branded nets. And that's something I'm very pleased with, because that's -- sentiment is turning. America's waking up that there's a new network leader and that we're not even done yet. And yet, with the lowest postpaid churn in the market and the most satisfied customers overall, there's -- and we're not done. There's a lot of opportunity there. This market has always forced consumers to pick. Do you want a great deal from a company that will put you first and treat you right? Or do you want the best network? What -- those days are over. You don't have to choose. You can have both. And we haven't unlocked the potential of that yet in terms of how it can translate to commercial results for T-Mobile.

So when you look at what's driving decisions in the market, how do you rank quality perception and experience, handset prices, content bundles? You have Netflix, Verizon has a promotion with Disney+. How do you rank the importance of what's driving maybe both decisions and also retention?

Nothing matters more than network, and that's why I just made the comments I made. But nothing drives you in the store tomorrow morning like a promotion. And so that's back to that balance that I talked about. And if you wanted to maximize this quarter's results, you would only advertise promotions, but you'd be stealing from tomorrow. And we were able to mix that much more in favor of long-term brand-building messages and yet still deliver the end quarter results, which was sort of my point before.

We'll go to the next survey question. So the what if, T-Mobile is standalone, what should be the top priority? Aggressive share repurchase, spectrum purchases, DISH acquisition, regional consolidation, launching home broadband and TV or pursue a merger with Cable?

You don't get to track what we say, right?

You can disclose.

All of the above?

So we have -- #1 is 12%. Of course, I'll say it because people can't see it online.

This room likes spectrum almost as much as Neville likes it.

I did not vote, for the record.

12% share repurchase; 42%, spectrum; 14%, DISH; 3% regional; 8% competitive home broadband TV; 22%, merger with Cable. How should investors think about a standalone T-Mobile just strategically and from a capital allocation perspective?

Want to start, Braxton?

Yes. So first of all, we're not going to -- that's all theoretical at this point because we are going to bring this transaction out. But as we've said multiple times, if this transaction does not occur, we have a $9 billion of Board-approved buyback that we would immediately reinstitute. We have leveraged less than 2x that. Certainly, our appetite for spectrum will be different than if we're in new T-Mobile. And that's going to be a priority to look at the mid-band. And on the flip side of it, it's going to take a while. We know the C-band's going to be the end of next year, and Neville can talk about CBRS. Maybe there'll be some other options out there. But that's going to be an important part of the perfection of the 5G story. And we have all the foundation of it, but those are 2 extremely important items. Certainly, if there ever was an opportunity for regional consolidation, there's no signs that, that would even be considered at this point. But there'd be some wonderful synergies for all parties that would come out of that. I mean you look at that whole list, there's a lot of aspects of standalone T-Mobile where we'll continue to excel, continue our momentum and continue the game plan. But there's no question that we will create much more value for all of our constituents with a successful deal, and that's what we're 100% focused on.

Neville, how important is mid-band spectrum to the future 5G strategy? Do you have any expectations for C-band or other mid-band spectrum that may be out there in the marketplace over time?

I mean, I think if we kind of just come up from just a U.S. picture, I mean 5G is emerging globally, primarily in the mid-band space. I mean that's where the ecosystem is driving, and low-band. But the heavyweight capacity layer is going to be in mid-band. Hence our focus on the Sprint combination and all the goodness that we can bring. I think the alternatives to that are going to take a material period of time to develop. It's not easy for any of us to -- none of us can come close to manufacturing the level of capacity we can in our combination with Sprint, anything like the price, time frame or whatever it might be. Now there are spectrum opportunities coming. There's always something in the mix. There's a millimeter wave auction ongoing today, so I'll stay clear of the millimeter wave spectrum discussion. But 5G is not fixed with millimeter wave. We know that piece. So the mid-band's important. I think most of the discussion in the industry has been around C-band. The FCC is now looking to move forward with the public auction on C-band, tail end of this year, so an early '21 kind of auction close. And then when the spectrum become available, I think at best 18 months, maybe 2 years from there. So '21, '22, '23. I mean it's a long pole in the tent. In between that, we're all going to have to be busy on refarming mid-band we have, looking at our license spectrum, CBRS kind of marginal opportunities. So there are some things out there. But we're not alone, right, in there. I mean I think the Verizon position is materially worse than anybody's in the industry, AT&T benefiting from some new spectrum they've lit up with FirstNet and some of the stuff. We're benefiting from rolling out that $8 billion worth of 600 megahertz. People seem to forget that there's a lot of new spectrum we're putting in with that layer. So we're not in a terrible position in any manner or form. But it's going to take some time for the U.S. to develop this kind of mid-band 5G story, which is where the rest of the world is maybe in pace. That's why we need this transaction approved, not just for competitive reasons, but to advance and move forward with a meaningful and deliberate 5G strategy here in the U.S.

Let's go to our last survey question. We thought we'd take the opportunity to ask our audience about the economy, the -- while we wait for that question, we'll go in a different direction for a moment. So when we think about 2020, the last couple of years, you talked about geographic expansion, micro vertical targeting. How much more opportunity is there in both of those camps? How much more expansion from a marketing perspective could you get to? And are there more micro verticals out there that you could go after?

Well, just on geography, we have good network now against 326 million Americans. There's 328 million or so in the population. We now have solid coverage for 326 million, low-band for over 300 million. That's what's deployed already, and it's obviously on constant improvement. We market in 265 million. And a lot of that, 35 million of that, is just recent in the past 2, 2.5 years. So there's still -- there remains plenty of opportunity. And what that means is, if you look at our shares, we continue to have disproportionately low share in the suburban fringe, in rural and small towns and with enterprise. And those are -- remain big opportunities for us. Now they've been feeding our growth. But even though they've been feeding our growth for the last 2.5 years, we continue to have disproportionately low share in suburban fringe, small town, rural and enterprise. And so even before you get into demographic mixes or all kinds of other cuts at it, that's a big opportunity for us still. And we've shown we know how to execute there, because we've been able to post some great results with those -- with some improvements in those areas over the last couple of years.

We able to get that up? Can we do the ad hoc version of this, to pull that up? We're going to call the audible and do the ad hoc survey. Okay. So I'm going to read you these things. I'll read them twice, so we get it right. So in 2020, we will likely see: one, stronger economic growth versus 2019; two, slower but positive economic growth versus 2019; three, a mild recession; four, a deeper recession. So 1, stronger economic growth; 2, slower but positive economic growth; 3, mild recession; 4, deeper recession.

This is just in 2020?

Just in 2020. Just limiting ourselves to 2020, see where the -- our audience kind of feels. And there's going to be a question to follow for you guys, of course, on this. So 1, stronger; 2, slower; 3, mild recession; 4, deeper recession. And our ad hoc survey says: 19%, stronger economic growth; 64%, slower economic growth; 14%, mild recession; 4%, deeper recession.

Does it bother you that this is the only thing that was real consensus on in the room, and it's the thing that nobody ever gets right? No one has ever gotten this right, I mean...

So the question for you guys is, number 1, are you seeing any changes in economic behavior based on customers, credit, et cetera? And it's been a long time since there's been a recession. So how should investors think about recession and risk, on your customer base and on your financial performance?

I can start, but I'd be interested, Braxton, in your thoughts to amplify. Think to your -- to the premise of your question, things have changed a lot since the last recession. Just think about this: The last recession that kind of came to a finish in '09, maybe beginning of '10, smartphones weren't a thing. I mean, holy, what -- smartphones weren't really deeply embedded in scale usage yet. There was plenty of them out there, but think about that. That's amazing. And of course, things have changed now. What that -- today, this is the indispensable connection of our life. And when you are forced to choose through economic circumstances, tough things happen to your personal family budget. That's not going to be something that you're going to turn to early on as a place to save, and that's different from the last time. I would bet that home broadband, linear TV, plenty of other subscriptions, even the OTTs, et cetera, an awful lot of things are going to go before your wireless goes. What you're going to ask is, do I have the right wireless connection? Do I have the best wireless connection? Am I saving money? I think you're going to see optimization, people seeking value. And boy, are we well positioned for that. We are so proud of how we serve people who have difficult economic circumstances. And if more people have difficult economic circumstances, we will be here to serve them with a very high-quality network at fair prices and a company that's committed to them and has always been committed to them. And so I don't go so far as to say it's a huge opportunity. I'll tell you that I think our business is well positioned to be resilient regardless of the economic circumstances.

I want to thank you for your time today. Thanks very much.

It's been a pleasure. Thank you.

Thanks.