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

Good afternoon -- oh, so good late morning still to everybody. This is Tim Horan, the cloud and communications analyst at Oppenheimer. It's my pleasure to have what I consider the dream team for wireless all here today, basically, most of the senior management team here with T-Mobile. We have the CTO, Neville; the CFO, Peter; and the CMO, Matt. And just so everyone knows, we do have the ability to ask questions online here with the Wall Street Webcasting, and I already got a bunch of questions, which I will do my best to weave in, but I will basically get to, as much as I can, everyone's question here online. And I personally call this a dream team because I think T-Mobile has done more to kind of improve the wireless networks and competition and service than any other company here over the last 6, 7 years. And particularly, Neville Ray, frankly, is one of my heroes in the industry. I think he's the best wireless engineer on the planet and the best wireless network operator. And it's a real pleasure to have him on the call today because I really think he is the key man to getting this network integrated. And without the network, which is the foundation of a wireless business, nothing else is going to work. Not to say that Peter and Matt's job aren't really, really important also. So we're going to spend a lot of this call here talking to Neville. But before we get there, I want to hand it over to Peter kind of to give his disclaimers. And maybe just give a brief summary on the quarter, Peter, and possibly where we are with the organizational integration of the companies.

Yes. Well, thank you so much for having us, Tim. And I completely agree. I view my job as enabling Neville. And if I do that, successful. But yes, let me get started.

No pressure here, guys. No pressure. No pressure.

So let me get that fun legal disclaimer out of the way. Today, we will make some forward-looking statements during this conversation, including comments about the expected benefits from the merger with Sprint. Such statements involve a number of significant risks and uncertainties, including the risk factors set forth in our SEC filings. We cannot comment on Auction 105 due to the quiet period that has started. So excellent. All right. That's all out of the way. So Tim, let me just give a brief overview of the quarter. And then maybe I'll hand it over a little bit to Matt, just to talk about operationally what's happening, churn, trajectories and how we see the second half of the year developing. But boy, I mean, what a journey we've been on, right, in this significantly difficult environment. And I know you expect this all from us, and we just deliver every single time, but we hit the ground running and delivered as we always do, right? So let's look at just some of the things that we've accomplished since the merger happened. We led the industry yet again in postpaid and total branded net adds, 1.1 million and 1.2 million. And for those keeping score, that's 3x AT&T and Verizon combined, right? And that includes we took an accrual associated with disconnects for the FCC pledge. Financially, we delivered $13.2 billion in service revenue, exclusive of Boost, which was in disc ops; and $7 billion in adjusted EBITDA. You saw us pull forward -- come out with an 8-K pull-forward cost to achieve to accelerate certain synergy capture, both around organizational design as well as store rationalization. You saw us do the SoftBank share sale, so with unprecedented market dynamics as we deliver that $20 billion. And it also returned us to a governance structure that's been super successful for us in the past. We understand and we can support each other really well. We closed the DISH transaction on July 1. I mean what an accomplishment right there. And I know Matt will want to talk a little bit more about this. We unveiled our latest Un-carrier move, Scam Shield, pooling and dragging the industry yet again into improving customer experience. And right before earnings, as if that wasn't enough, we went ahead in unified brands and came to the New T-Mobile. And now all customers can be served from all stores. So I mean, just an amazing set of experiences. Maybe before I get further into revenue trajectories and the integration and those questions, I mean, maybe, Matt, if you could talk a little bit about both Scam Shield and how you see the second half developing, I think that would be excellent.

Yes. Great. Thanks, Peter. Just to pile on a little bit to what Peter said, one of the -- we would say, one of the great things about the deal taking a little bit longer to close than anyone had anticipated is we have more time to plan. And you saw that get unveiled in the first quarter together as one company operated. We had a lot of discipline, a lot of great execution at very uncertain times. We started the quarter taking care of our customers and our employees and staying safe. But we remain competitive throughout, and we continue to push forward both on driving share gains in the marketplace, as Peter talked about, but also bringing these 2 companies together and unlocking the synergies and putting things in the ground to move us forward. When Peter talks about where we're headed and where we're going, this is a case of building momentum. We've seen the market start to recover. We've seen continued execution going forward, and we've seen great results. So we're going to continue to see that going forward as we drive share gains in the areas that we've talked about and get to work on integrating these companies, getting the network build, which I'm sure Neville is going to talk a lot about, and making sure our new Sprint customers are fully experiencing the benefits of T-Mobile. One of those is Scam Shield. In the quarter, we launched our first-ever Un-carrier move that covers all customers: Metro by T-Mobile, Sprint customers and T-Mobile customers. That's just one example because I know there's a lot of questions about our Un-carrier move is going to continue or stop. They're going to keep going. And we saw that with Scam Shield, where we gave a great offering to help something that was very relevant in the COVID times to consumers. And that's a full suite of protections to help them with scam and robocalls.

Matt, just on that regard, the robocalls, what percentage do you think you -- have you implemented that now? And what percentage are you eliminating?

Yes. We've seen great pickup in that. We effectively -- so we've got built in our network capabilities. Neville's team's got AI and machine learning to really -- it's the only carrier and solution that's built into the network to block and prevent these robocalls. And when you have Scam Block turned on, which we've seen a 1,700% increase in customers turning down on much, is a great thing. That's what we're trying to do here is to help them Americans and consumers know that they can take control of these calls. When it's turned on, I won't say you get no scam calls, but it goes from a lot to hardly any. And you've got an app right there to go see how many are getting blocked. And we also gave free caller ID as well through this. That's also another innovation. And it's another example of what we do, is we take something that the other carriers charge money for and give it to free to consumers. And we've seen a massive uptick on that as well.

Great. And so Peter, just on -- can you just talk a little bit about what you've done so far with the integration? And I know it's very early, but where are you, I guess, at the organizational structure at this point and the systems integrations?

Yes. So let me start with organizational structure, and I know Neville can touch in on just all the massive momentum that we've had already on the network. But yes, you saw us pull forward a couple of things, right, and one of those being organizational structure. And that's something that we initially expected to take maybe 12 or 18 months. But as we actually have access to everything and jumped right in there, we said, "Look, it's important for both efficiency, effectiveness that we create role clarity for people, right?" And that was our responsibility to do. As always, right, we jumped right in there. We took care of it. And while we thought it would take 12 to 18 months as a process, that pretty much effectively will wrap up here in Q3. Now that's just one piece of it, right? And don't forget as part of this evolution, we're also going to be as Un-carrier doubling down on a lot of areas on jobs. And we kicked off our Un-carrier Jobs Initiative. That's going to add 5,000 new positions here coming up shortly. So it's a net positive move. But of course, the creation of clarity just helps us to run that much quicker from an integration perspective. And similar things you saw on the store rationalization, move up all of that. And those are synergies we'll already start capturing in the second half of the year. So really important from that perspective. And on the network side, certainly, Neville, I'll hand it over to you just in a second here. But I think one important thing to note is we're already capturing synergies from an avoided build perspective, right? So certainly, there's a lot of DCOM savings that come in the back half of this integration process, but you also have a lot of avoided build sites that are already occurring and generating synergies. So Neville, you want to chat a little bit about just the progress that you've already made, which has just been amazing.

Yes. Thanks, Peter, and thanks, Tim. Appreciate the kind words at the beginning. See if I can live up to one for you, Tim. So -- but Matt said this already. The irony in the deal taking longer to approve is that we had more time to plan, and we had more time to close for -- more time to prepare for the close and the combination. And so we came out of the block super fast. April seems a long time ago already. But even on April 1, we were starting to bring the benefit of the combination of these 2 companies together. And I'll just say at the outset, Tim, I couldn't be happier with our progress. If you'd asked me back in April, "Would we be in a position that we now are in August?" I would have said, probably unlikely with a pandemic around us and everybody trying to understand how to work. And would we be in a position to continue to upgrade sites and do work on our sell-side facilities, all the things that we need to do for integration and 5G rollout? And it was pretty uncertain. The good news is that we've been able to accelerate our activity during that period. And so I look at the last month -- last 4 months of July, and I've referenced this stat during earnings, I mean, every week, we were starting radio upgrades on 700 sites in a week. So that's thousands in a month. That rate was about 600 in the prior month in June. And even last week, when we had the hurricane and storms ripping through the Northeast, we just barely missed 700. The team did an extraordinary job still building in many parts of the country, obviously, that were unaffected by the storms but still building in the Northeast. And so what does that all mean? I mean, for me, this deal always brought us 2 just incredible opportunities, I mean, as we combine these companies. The first one was to achieve the synergies that Peter referenced. And just on network alone, that synergy run rate is $4 billion. That's our pre-deal estimate. So that's an annual run rate of $4 billion as we effectively collapsed 2 sets of fixed assets into one. I mean I think most folks can understand the network economics on that piece. So we have that prize. The second prize is that this is kind of finally the time of 5G. And every dollar that we're investing in this network is accelerating our path to synergies while at the same time accelerating, what I will claim is, our leadership in 5G today. We're out there with a network which is reaching 250 million people across the U.S., 1.3 million square miles we updated in earnings, is the most advanced with the stand-alone architecture. And that's just the low-band piece. We're now adding to that material depth of spectrum with Sprint's rich 2.5-gigahertz spectrum that we started to roll out April 1. And so I'm delighted with our progress. And we have 2 huge prizes. I absolutely want to maintain our leadership in the market on 5G. I think there's been enough of the broken promises from Verizon and AT&T. We're not about trying to tell you your LTE network is a 5G network. We know who did that. We're not out there trying to tell you the kind of irrelevant hotspot coverage is a meaningful wireless 5G network. You know the Verizon story. We're out there putting a breadth of coverage down, and we will continue and accelerate our pace to add material depth to that network with the mid-band story. And our spectrum position is one to be envious of across the industry. I mean I can't have a bad day now, Tim. I wake up in the morning, there's a smile on my face because I finally got a great set of spectrum assets. And I've been battling away on this network for the best part, one way or another, for 25 years, and we've never had the size and scale of this opportunity: the 5G story, a massive synergy pool and this great opportunity now to leverage these huge spectrum assets we have. So...

Well, Neville, I think when you and I first started talking almost seems like over 15 years ago, I think you probably had close to 30 megahertz you were working on in many, many markets. So -- and you did like miracles with that amount of spectrum that you have. I think to go from 30 to over 300, you just -- you're like a kid in a candy store, I'm sure.

I wish I was more of the kid, Tim, but it's okay.

So what exactly are you doing at these sites? When you go to a site, you have to upgrade the -- light up the 2.5. What are you exactly doing?

Yes. So it's a combination of things. I mean we have 2 programs -- well, there's multiple programs. But the first piece that we're not slowing down on is the rollout of the 600 megahertz. So there's tens of thousands of sites that, that program has already reached. But I know you're aware, Tim, we have FCC commitments to take this 5G network truly nationwide, coast to coast. So that 600-megahertz build is ongoing. And that's -- I won't give credit to the team, but that's a relatively straightforward upgrade. We have 700 megahertz on a lot of those sites. So we change out a radio for a dual-mode, dual-band capability. We can do that on most of the antennas. So that -- the team is just -- they have a factory running, and they knock those sites out week in, week out without fail. So I'm trying to get that to a very steady state, and that program continues on through '21. Then the new program is the 2.5-gigahertz upgrades and adding that wealth of spectrum that came from Sprint. And Tim, as you referenced, I mean, we're over 319 megahertz of spectrum now as in sub-6. We have a lot of millimeter -- I can't even say it, millimeter wave spectrum, too, more than actually AT&T does at this point in time. But that 319 megahertz, that's 3x Verizon's holdings approximately. And in the mid-band, which is super important on 5G now, that's kind of 4x Verizon's position. So we have a lot of spectrum that we can roll out. We've already started rolling that piece out. And on the sites, we're going in and basically upgrading, putting new 2.5-gigahertz radios onto the T-Mobile network sites. There's obviously -- there's backhaul upgrades, power upgrades. The work is meaningful. This isn't 2 guys come along with a set of antennas and prop them on a site. But the work can be done in just under kind of 10 business days. It's kind of 5 to 10 business days, depending on the complexity of the site, but it's relatively straightforward work for us. And it's an important point, Tim, because I'm not building -- people think like we're up against like building new steel, stacking 200-foot towers or monopoles. I'm not, right? I'm hanging radios, and I'm adding antennas onto generally existing infrastructure, be that towers or be that rooftop structures across the U.S. So the good news is I've got a great team. They're firing on all cylinders. I've never had this level of production in terms of radio upgrades and programs running through the team. We want to go a little faster on pace as we move through the balance of this quarter. And then my goal is to really try and maintain that kind of -- this kind of steady-state concept. You know this industry well, Tim, it's like all these hockey stick-shaped curves from everybody. Spectrum comes along, massive charge to roll it out. 6 months of activity, everybody goes home. It's very, very tough for supply chain, crews and resources and our own teams to manage. And I'm getting to the point now where I can hit a great run rate that has the expenditure, budget and CapEx that Peter is comfortable with as we take the business forward and we run at steady state through the next 2.5 to 3 years. This is a massive network transformation. It's not something that's going to be done in a year. I really want to break the back of the 2.5-gig deployment in key urban areas and metros in '21. But we're off to just a great start this year.

Well, I have like 30 questions online for you. But I guess -- so how many cell sites are you going to actually -- it sounds like you're going to get to about 1,000 per week here. How many cell -- or sorry, per month. How many cell sites do you actually have to upgrade in total?

Well, the run rate is to get to about 1,000. I'd like to get to at least 800 a week, Tim, that's the number, right? We're doing 700 a week right now. I want to get that, if I can, to about 800, thousands hyper aggressive. But the program -- I mean the 2.5-gig rollout over a multiyear period because we're taking this into not just metro America, but we're taking this into rural America, too. We have huge ambitions. Matt -- I'll toss this to Matt, if I can, in a minute. But I mean, we have a huge ambition to really go penetrate the broadband business and to become a great supplier of broadband capability in rural America, where, if we're honest with ourselves, choices are just goddamn awful today, price-wise, performance-wise. And so a big part of the program is rolling out 2.5-gig into rural towns and cities. So the actual total number of sites that needs to get upgraded, Tim, is in the mid-50,000s over the period. But our commitments with the FCC are we have a measuring milestone at 3 years, and then we have one at 6 years from close. And so I don't want to be still banging out radio upgrades 6 years from now. But over the next 3 to 4 years, I mean, we're going to be super busy working those upgrades.

But it sounds like, at this pace, you can be done within 2 years of the upgrades.

Well, there's 2.5 -- and the 2 pieces to remember, Tim, that volume of upgrades is not just the 2.5 sites. That's -- I'm doing 600 radio upgrades and 2.5 upgrades. So you have to count for both. So yes, I wish I could get -- I'd love to get everything done, and I know Peter and Matt would love me to be done by Christmas because then we just go destroy the competition if we can get this all done. But believe me, by the end of this year, I mean, we will have a multi-thousand-site 2.5-gig network on top of that low-band 5G. And you could ask me what does that mean. I mean, right now, Tim, on the low band, I get tired of some of the BS from my competition, right? They're all now doing what we're doing. They've adapted their strategies to roll out low band. And they had a whole campaign to say, "Well, low-band 5G doesn't do anything." Our speeds on 5G in the low band, they're kind of double the average industry speeds in LTE today, so 40 to kind of 80 megabits per second. And you can say, "Well, that's not a big deal." Well, it took the industry 5 years to double LTE speeds to 40 megs, 5 years. And we've doubled speeds with low-band 5G in like 5 months, maybe 6. And so everybody seems to have these crazy short memories. Yes, it's not gigabit per second speeds, but it's incremental and meaningful, and it's hitting rural America. So that stuff is making a difference already for our customers.

And what do you think the practical speeds are where you upgrade the 2.5, both for upload and download?

Well, we're already seeing on the download speeds, Tim, on average, we've -- in the markets where we're rolling out 2.5 right now, on average, we've migrated about 60 megahertz of the 2.5 spectrum. The unit's TDD, so we can put more into the downloading. Average speeds are around about 300 megabits per second today in those clusters and under those sites. So that's an 8 to 10x, depending on where you are compared to LTE today. That's really meaningful. We'll add more spectrum to those sites as well as adding more sites as we move through the balance of the year, at least probably another 20-megahertz carrier. So speeds will be in the 400 megabit per second range on average as we close out 2020. So that's a clear 10x speed variable compared to LTE. And you can argue all day long. I mean if you painted this false picture that there's going to be multi-gigabit speeds across the U.S., the 3-plus million square miles of it is a fantasy, right? It's going to take decades and decades for that to happen. But if you can go and build a network, which is broad mobility and that speed capability, indoors as well as outdoors, that's a massive change. The industry hasn't seen anything like that. So that's the mission that we're on: number one, get that 5G network out there for mobility. I would like to go to Matt quickly and just say the second opportunity, Tim, is on home broadband. And that's a massive opportunity for this company, not -- we've got some work underway now. But as we move into '21 and '22 and '23, that's a completely new growth vector for the company. Matt?

Right before we turn it to Matt because I've had 3 questions on the same topic. You've been incredibly efficient with your CapEx spending over the years versus your peers. But the question is you're still spending a lot less than what AT&T and Verizon are doing, who seem to be doing a lot more. Just any color you can give around that.

Well, I could be -- I could give you a ton of snack, Tim. I'll try and avoid it, right? But I think it depends who you are and how you grow up, right? I mean all of us, the 3 of us on the screen here, we've all been part of small companies, and there's a real entrepreneurial heart within T-Mobile. And we spend every dollar like it's our own. And that's a mantra in this company. So we're scrappy. We're aggressive. We get a lot for the investments that we make. And you get trained into that in the business when you don't have the wealth of riches that your competition does. And I don't care what anybody says, right? The AT&T and Verizon guys, they don't -- they have a balance sheet, and they don't have that discipline the same way that we do. And it's how we've grown up in the company together. So I look at our capital line. I mean, we're going to go invest in this next 3 years, $40 billion. That's a lot of money, right, Peter? But Peter's -- I got Peter nodding and grinning here. This is good, Tim. This is good. So we're going at it in a way that as a company, we've never done, which is super exciting for us. We've never had this wealth of riches in terms of spectrum, and the balance sheet and resources and the debt capability that Peter and Braxton before have put in place for this company, it's extraordinary. And so one of the -- I just leave the last comment with this. One of the biggest advantages for us, and I touched on it earlier on, is every dollar we're plowing into this network is doing 2 things: it's building capacity, both in LTE and 5G, to support customer migration onto the one network. So we were going to go do that. There's a huge $4 billion door price at the end of this road on synergies. So maniacally focused on that. But here we are, we're right at this point in time where 5G is happening. And so every dollar I can pound into this network is advancing our 5G leadership, too. That kind of like perfect storm the right way, that doesn't happen very often. And I think a lot of the audience that you have and people you're bringing on the call today, Tim, I think they understand that and they see that that's unique for us. AT&T and Verizon are chasing us. Verizon desperately going to be buying spectrum in -- I can't talk about current auction but in future auctions, just to try and level the playing field with us and do something on 5G. No synergy price, right? They got to invest billions of dollars to now catch what T-Mobile can do. And they know the pace at which we're moving. So it's a great story for us. And I am going to now throw it to Matt because I want not to talk a little bit about -- it's not just wireless, Tim. There are other -- why we're so excited about this network that we can build is because there's other major vectors of growth for us as a company that we've really only toyed in today.

Well, then, Matt, I think there's a lot of investor skepticism around fixed wireless and maybe -- both the ability to provision it, but it sounds like you guys are definitely provisioning, and the ability to kind of market it and will customers be skeptical about a fixed wireless product versus a wireline product. So Matt, just love to know how you overcome that skepticism, both for investors and customers.

Yes, Tim. That's great. Just to add on to what Neville said. And if you just look back at over the past 4 or 5 months, one thing that we've been reminded is just how important home Internet is, how important it is to have fast, reliable home Internet connectivity. I mean students are going to school from home. We're all working from home. Many times, there's multiple users on a single connection fighting for connectivity. And you saw some of that in the results, too, when you looked at the marketplace. Generally speaking, the providers that are winning are the ones that are able to provide reliable, fast home Internet connectivity in the marketplace because consumers are seeking that out. So it's been a -- it's a reminder. And it's a great thing for us as a company to be in this position, where Neville is going to be able to build this network with such great, reliable, consistent speeds on spectrum that penetrates homes and works very good indoors to provide this consistent reliable Internet experience to consumers. We've been piloting this for a little while. We've got a market open right now in Grand Rapids, Michigan. We've been selling home Internet on LTE. This isn't even the 5G variety that Neville talked about with the speeds that you're going to see on the back of the 2.5 spectrum. But what we've seen is amazing results. The customers that we've hand-selected to test this product out with, very satisfied. They're using a lot of data, multiple times more than phone data. And the NPS scores, off the charts, very, very high. Consistent experiences for what we'd expect on mobility, where in many cases, we're a market leader in that area. So we're -- out the door, we're actually very confident in a couple of things. One, that the network is going to be able to serve up to 50% of the households in the U.S. with the new alternative, bringing competition to areas of the country where there's no speed and no competition. And you've seen what we've done over the past 7 years, competing in our own space. And when we bring this type of competition and bring this value and reliability of connectivity for high-speed Internet to these households across the U.S., I have no doubt in my mind that consumers are going to adopt our services because it works great, and it's very consistent. So it's coming. Obviously, we've got to follow the network build-out when it comes, and we've got to get the right hardware in place to provide this home Internet service over 5G as we roll it out. So it's going to be a building business. It's not going to be here tomorrow out the gate. But when you look at what Neville said, we've had great success. We've been leading in service revenue growth. And now we have an entire new category to go after over the next 3 to 5 years as we follow the network build and grow and deepen our relationships with our customers and also win new ones as we bring new competition into rural America.

Great. And maybe a 2-part question for both Neville and Peter. Neville, could your network support, let's say, DISH's spectrum if they wanted to light it on your network, is there ability to kind of do some share build-outs, maybe not just their spectrum, but other spectrum? And I guess, Peter, is there a way to kind of make that work financially for the company?

Yes. I mean, let me start on the spectrum piece. I mean, obviously, the one, Charlie's spectrum, he has the 600 megahertz, Tim, which we actually did use during the FCC program to support network growth, et cetera, and additional capacity during the pandemic. And you saw how quickly we rolled that out. I mean it was hours, not days. And so modern radio now is able to support -- back to your comment, we used to deploy radio that could support 20 megahertz of bandwidth. The radio on 2.5 can support 200 megahertz of bandwidth, and the 600 radio supports the whole band, right? So it supports the 70 megahertz that was auctioned. So it's relatively easy to do things like that. The AWS and other mid-band spectrum that Charlie has, it kind of depends. He has some spectrum, which is fairly common to us, AT&T and Verizon, then he has some which is not. He has some fairly unique pairings that he created with the old satellite spectrum that he converted to terrestrial. So the answer is somewhat technically, but the biggest issue is business model. And I'll toss this to Peter in a second. But last time I looked him, Charlie's building his own network, right? So that's what he's doing and that's what he's committed to do to the federal government. So I'm expecting that we'll move forward with that build. And we'd see stuff, I think, listening to his earnings the other day, maybe something this year but certainly something in '21.

Before we turn it to Peter, I mean, isn't it much more efficient to share infrastructure? I mean you have a lot of the infrastructure in place. So it still, I think, classifies as a network build, even like this, it would seem to me, if you have the capability?

Yes. I mean I think the radio piece is one piece, Tim. Obviously, after that, you've got to have your network core and everything else, right? So -- but the sell-side piece, there's always been opportunity there, but there's nothing on the slate right now to have something materialize there at this point in time.

Yes. So let me take it, and I also want to just highlight one thing after listening to both Neville and Matt. In terms of the business model, who knows, right? You can -- it's hard for me. We're all hypothesizing here. I'm sure we could find something, but that's not a path, as Neville said, that we see Charlie going down right now. So it's hard to know. But let me take it back to just -- you hear this excitement from Neville in terms of what he's building, the capacity we're creating. Matt shared just there's so much opportunity for this company. And I sit here at the confluence, probably I should be smiling even more than Neville even though it's hard to do sometimes. But here, we're going to have really 2 prizes coming to us. We talked about the massive synergy opportunity that's in front of us, right, and unlocking $43 billion NPV of synergies, $4 billion run rate in the network, a couple of billion in other areas. And I know, like we said, we do owe an update, which we'll get to as we're a little further out than a quarter. But you've got -- that generates massive free cash flow as well, right? And right now, of course, the focus is unlocking the synergy, building the network, investing that $40 billion that we've talked about there, but that leads to massive unlock on the synergy side. And at the same time, the Un-carrier supercharged spirit is here, right? And we've been a service revenue growth leader in the industry, and we have no intention of letting go of that, whether it's in core wireless, whether it's in other areas, like Matt discussed, right, that is what we strive for. So we're going to both unlock massive synergies, massive free cash flow from the deal, but also at the same time, continue our above-industry growth, which we believe leads to ultimate higher value creation. So those are the things that we're pushing for, Tim. It's absolutely -- the scrappy nature is not going away, as Neville talked about. That's where we're really good around. That's where we pile around and then take that and couple it with the best 5G network, right, the best customer experience. I mean you've got really a recipe for success. So I couldn't be more pleased as exciting. At the same time, right, we're coming out of June with a fully funded business plan, a pro forma leverage of 2.4. And you saw us execute on just some amazing deals in the marketplace, both certainly with the reaction to the SoftBank deal; but even in June, where we raised $4 billion at 2.16%. Massive NPV, of course, on that, but also excitement in the marketplace. So we've got the wherewithal to go look at other opportunities. We always, of course, will, but we're heavily focused in on how do we unlock the synergies and how do we unlock this growth.

And maybe just switching over to Matt. Is there a lot of opportunity for new niche segments of the market or new products you can bundle together? You guys have done a phenomenal job with this or new Un-carrier offerings over the next few years? Is there still more opportunity?

Oh, yes. There's a lot of opportunity. There's a lot of opportunity to do what we've been doing for the past several years. In many cases, there's nothing new here. The newness is the network. We're now going to be in a position where we're going to have the best 5G network. We already have the best 5G network, and every network is going to be a 5G network in time. And so when you couple our market approach for providing extreme value with having the best network, that's what's new. And we're going to be able to bring that to these segments, where in the past, customers are unwilling to trade off the network for the value proposition that we offer. So when you look at the business plan, we've got a lot of ground to cover and a lot of share to take in the enterprise and public sector space. That's largely been an area of the market that T-Mobile has kind of been more of a consumer-focused offering. That's where we've taken most of our share from. So we've got a lot of great work. And you saw some of that already underway in Q2. We came out of the gate within a month and completed our day 1, which was switching over our market offering to just T-Mobile for the enterprise and public sector space. So we executed very quickly on that. And the other thing we've been talking about couples well with your comment about bundled offerings. And that's an important segment for us, where, largely speaking, we haven't performed as well either and that's in rural America. There's tens of millions of consumers there. And as Neville said, it's taken us longer than the others to get the network in a position to be a winning network in that part of the country. And when you look at the speeds that Neville talked about, you look at our spectrum portfolio and the site build plan, our network is going to be unmatched in rural America. And we're going to be able to offer Internet and wireless together if we choose to as a bundle and provide extreme value and choices to consumers in those areas. That's another topic, another area of focus for us for where we see a lot of opportunity for growth. The question about Un-carrier moves, we're not going to stop until customers are completely satisfied and they believe that T-Mobile has done everything to make wireless as beautiful as it could be for them. And there's plenty more pain points out there to solve. So we're going to keep on that mission as well.

So we have time for one last question, I think. So Peter, I'm going to ask you an important one. I think when you guys filed for the merger, I kind of recall, 3%-, 4%-type revenue growth target. Correct me if I'm wrong. How -- I know you're going to update on kind of some of these metrics. But is there a kind of way to beat that? And if so, how, Peter?

Yes. So yes, it was 2% to 4% longer-term wireless service revenue targets. And I think it was 3% to 5% CAGRs on total revenue, again, longer-term targets. And the way to beat it is utilizing the tools that we just talked about all this time, right, the best network, the best set of assets there, the best value proposition with the best network, right, plus the best customer service, using this capacity to go after new markets, using it to go after areas where we've been underpenetrated in the past, whether that's the enterprise space, new opportunities opening up. I think there's obviously, from my perspective, the world has changed here. And why in the time of COVID, when essential connectivity is so important to people, why wouldn't you look to switch to somebody who provides you the best network and the best value, right? What is that pricing umbrella really getting you at other competitors? So that's another area of opportunity. And we continue to look at all sorts of other ideas. Matt and his team are amazing at doing that. And we're not going to put it all out there yet, but I'm sure Matt will come out with lots of them.

And then very lastly, lastly, even with the synergies, you're kind of still well below Verizon's margins, well, well below. I know you're growing a lot faster, but is there a potential to close that gap over the very long term?

Yes. There's a few things. As you said, there are some structural differences, right, perhaps how we approach backhaul, build versus buy. The other is, yes, we are going to be a growth company, right? That's it. We don't want to return industry-average revenue growth. We think the longer-term value creation is higher in being a higher-revenue growth company. And with that comes investment, right, both investments in terms of the S side, but also investment in terms of what is going to be the densest network to offer the best experience. So I think the other thing you have to ask yourself is, will those high margins continue, right, or will they normalize a little bit, right? But I see us having opportunity to increase, absolutely. Again, I see it as an investment in the long-term value-creation opportunity of the company. But I also see an opportunity to impact that.

Well, thank you so much. I know you were 3 of the most busy people in the industry. And I really, really appreciate your time, and I know investors do, too. And good luck, guys. Thank you.

Tim, it's been a pleasure. Thank you so much for having us. We really appreciate it.

Absolutely. Next year. Bye, guys.

Thank you.

Thanks, Tim. We'll see you.

Bye, Neville. Bye-bye.