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

Well, thanks, and good afternoon, and welcome back to Citi's Global TMT West Conference. For those of you I haven't had an opportunity to meet, I'm Mike Rollins, and I cover the communication services and infrastructure sectors for Citi Research. We do, just for your reference, have disclosures available on the conference registration site. And I'd like to welcome, from T-Mobile, CEO, Mike Sievert; CFO, Peter Osvaldik; and President of Technology, Neville Ray. Thank you all for joining us today. Happy New Year, and I'm going to turn it over to Peter for some disclosures.

Excellent. Thanks a lot, Mike. Let me get this out of the way. So today, we'll make some forward-looking statements that are subject to a number of significant risks and uncertainties, including those included in our filings with the SEC. And obviously, we will not comment directly or indirectly on the FCC's ongoing auction C-band spectrum or the post-auction market structure. And with that, I'll hand it back over to you. Thank you for placating me.

Thanks. Well, I'll turn it over to Mike and to you, Peter, and to Neville. You've had some announcements today. So I welcome the opportunity to learn a little bit more about what you released after the close and give us your take on the initial 4Q results that you presented and some of the 5G coverage goals that you discussed in those 8-K and press releases.

Of course. Well, first of all, Mike, thanks for having us. It's great to see you again. And I'm sorry, it's not in Las Vegas. I guess I'm also sorry it's not on -- exactly on a slow news day. So thanks for your patience and taking a minute out from everything going on to talk about the wireless industry with us. Wow, we just -- we couldn't resist letting the world know how we did in Q4 a little while ago. And as you made reference, we announced today our preliminary subscriber results for the full year and for Q4 and we just blew it away. I'm so proud of the team. Overall, in 2020, we delivered 5.5 million new postpaid accounts, the highest in company history in 2020. And that means 1.6 million of them in Q4 alone, 824,000 postpaid phone accounts. And so that's just obviously exciting, and it's building momentum for T-Mobile. And despite so many challenges that I know you're going to ask us about, the world is crazy this year and there's so much headwind and tailwind, but T-Mobile is persisting. We're outgrowing everyone in this industry consistently, and that's what we're judged on. That's what the world expects of us. They want us to outgrow the competition, set the pace in this industry. They want us to translate that into enterprise value creation by outpacing synergy targets, both in terms of time and in terms of quantity, and they want us to set this company up for long-term success. And one of the things that I'm most proud about that we announced just less than an hour ago was that we smashed our 2020 network goals. Look, everything about our aspirations depends upon our network targets being exceeded. Synergies flow from our network goals. So do our ability to take share from AT&T and Verizon. And we set, just last quarter, we told the world that while sitting on about 35 million POPs covered by the highest capacity form of 5G, our Ultra Capacity 5G, we said that, by the end of the year, we would surpass 100 million. It was the most audacious goal we've ever set, and Mike, we smashed it. Neville and team accomplished something that's never been accomplished before. Not only do we have 280 million people covered by 5G, more than 4x the square mileage of Verizon, but in addition, the highest capacity variant of 5G that we call Ultra Capacity 5G, now 106 million people covered, on our way to 200 million by the end of this year. It's historic, and it's unprecedented. And it sets the stage for our aspirations to come.

It gives us a lot to talk about. So maybe just starting with the success that you had on postpaid phone net adds. We've heard comments about a smaller switcher pool in the quarter. There seem to be a lot of 5G phone promotions. What led to the strength of postpaid phone net adds in terms of exceeding the second half guidance that you previously laid out? And were there certain things in terms of share gains that are articulated through porting ratios or certain verticals where you found incremental success?

Well, thanks for asking that, Mike. I'm so proud of the team. There are certainly plenty of pressures. One of them is a muted switching environment. As the premise of your question suggests, right now, churn is low. Stores are closed or if they're not closed, people don't really want to be in stores as much. Traffic's way down. And so all throughout 2020, we've seen this dynamic that the overall switching environment has been muted, and despite that, we've been able to deliver impressive results. First of all, we have an incredible value. News is sinking in about our emerging network leadership and both enterprises and consumers are responding to that. That's obviously a huge tailwind for us as we continue to lay track on network superiority going forward. But every quarter, there's a balance. And we either go after switching, which is very expensive in period but more lucrative overall, or we sell into our base, which is now the #2 base in the industry at 102 million subscribers and growing. And we did a lot of that this quarter because there was a lot of opportunity with Sprint customers that didn't have as many lines. And one of the dynamics that we're seeing is postpaid is growing at the expense of prepaid in the market. So overall growth is rational, but postpaid has been outpacing. And so you see extended families doing things like getting family members postpaid lines that maybe used to be on separate prepaid accounts. And so those family lines are growing. And then bottom line is we continue to put pressure on the industry and go after share-taking opportunities with AT&T, Verizon and big cable and the whole rest of the industry. So it's a mixture of things, but overall, despite the pressures created by this very temporary COVID situation that we do see a light at the end of the tunnel around, the team found a way to deliver. And that's what we do time and time again at T-Mobile.

If I can ask Peter about the underlying economics for the customer acquisition and retention in the quarter, there are some additional add-a-line contributions or a different mix of the subscribers coming in. Should the investors be mindful of any influences on whether it's some of the KPIs, the ARPUs or service revenue growth or EBITDA performance? Recognizing you didn't disclose the dollars and cents in the release, but just at a high level, how should investors think about that?

Yes. That's a great question, Mike. And yes, we didn't release the financials, but good try on getting it out of us already. So as Mike said, right, there's always a balance in period. And what we saw this year was such a muted switching environment, and that persisted, to a degree, into Q4. And we think that's temporary. We're looking forward to the time as the country begins opening up and you see that switcher pool growing. But as Mike mentioned, there is different economic situation that happens in period, right? As you do more into the base, and again, that opportunity with the Sprint legacy base was great for us, that's going to be a little less intensive from a promotional perspective. So as we think about how does 2021 shape up, you will see a little bit of selling pressure, right, the S in SG&A, but it does create ultimately way more ultimate value creation as we get new accounts and new subscribers from that switching pool. So that's really what you should look at. At any time, of course, that you add an incremental line, there's a lot of customer lifetime value creation and maybe at a lower ARPU because that third, fourth, fifth line is at a lower ARPU generally but tremendous value creation for the business. So I'd focus in on EBITDA comparatives in 2021. As more switching comes into play, we'll be slightly pressured by this. But remember, we've got a lot of that funded through synergy value creation. So that's what I look at, Mike. I think that's the best way to think about it.

I want to get to that question of synergy, but before we do, I want to bring our audience into our conversation and bring back the live surveys that have been the tradition at our conference. And so the first live survey, I'll just read it. So for those that don't have access to the actual survey that will pop up for those dialing directly into our site, how many postpaid phone net subscribers will T-Mobile add in 2021? And so we gave a choice of 1.5 million or less, 1.6 million to 2 million, 2.1 million to 2.5 million, 2.5 million to 3.0 million or more than 3.0 million. And just for reference, and Peter, you can correct me if I don't have this right, I think that you added 1.51 million in the second half of 2020 postpaid phone net adds.

Go.

Great. So while our audience enters in their choice of what they think you're going to do next year, let's talk a little bit about that synergy topic, where you've set out a milestone to do $1.2 billion in 2020 and to double that in '21. But it seems like, based on the pace of improvement over 2020, shouldn't you significantly exceed that doubling goal based on the course and speed and in just thinking about the annualization as you move through the quarters?

Yes. Well, let me reflect back just for a second on just how exciting 2020 was and that guide to give you $1.2 billion. Again, we haven't released financials. That's the guidance we put out there. But remember, it was this team and the execution to really outpace what our original plans was, taking advantage of some of the closures that we had due to COVID and accelerating a lot of synergies where possible to give us a tailwind. But recall, the vast majority of the synergies come from network; and if you think about the network, there's 3 steps fundamentally in the process. One is to create capacity and build out the anchor network. Two is then to begin migrating that customer traffic and ultimately, the customer billing as well because, recall, we disaggregated those 2 things and that allows us maximum flexibility to reduce customer churn from pressure points. So as you do that, then ultimately, you get into decommissioning of the cell sites themselves. And so really, the milestones to look at now and to think about is what is happening from a network build perspective, which Neville, I'm sure, will get into and you saw some of the amazing things. We just absolutely smashed it versus our year-end goal. And what we're doing out there and what Neville's team is building and the pace is absolutely amazing. But then you think about what's happening from a traffic perspective and Neville will get into some of that, and that's one thing to look at from a milestone perspective. But remember, as we get through, ultimately, that last step is decommissioning. And so not necessarily will you see synergy attainment be very linear. And it will be lumpy. It's going to come -- from a network perspective, the decommissioning is going to be very much at the tail end of this process. And so that's why you can't think of just the linear extrapolation in terms of 2020 to 2021. But I can tell you one thing. This team has its eye on the prize, and there is no way, and we are so excited to continue to deliver faster and bigger on the synergy promises of this merger.

And it seems like just one other point on synergy opportunity. The churn, if I think about pro forma math from what it would have been 4Q a year ago if you had combined all the numbers together to what it is now, it seems like the decline was about -- if I'm looking at this right, about 40 basis points. How's that comparing with your expectations? And can that drive churn improvement, incremental synergies in 2021?

I'll jump in. It's just a source of really great strength. It's the best year-over-year churn improvement in the industry, we think. Certainly, it was last quarter. And if you look at our overall performance, it's almost flat to what stand-alone T-Mobile was a year ago; and that's despite folding in Sprint that was churning at more than 2% a year ago. And it's just a testament to what Sprint customers are experiencing, a better network, a lot of their traffic being broadcast now onto the T-Mobile network. Customer service experiences that are delighting them, in fact, more than triple the Net Promoter Score among Sprint customers that we've interacted with. It's just -- and it's just the start. We're absolutely at the beginning of it. And so look, we've been through this journey before. Legacy T-Mobile went from being the highest churning brand in the industry to one of the lowest, tied with Verizon, beating AT&T for stand-alone T-Mobile. And so now we're going to work that same journey using the same playbook with that base of Sprint customers and surprise and delight them and unlock the enterprise value creation of churn improvement. Can't guide on it. Can't tell you exactly how fast it'll come. It's a function of so much in this integration, and integrations are complex. But we know what we're doing. Our team is executing and we're focused on those Sprint customers and making sure that they see nothing but upside from this new T-Mobile opportunity.

Neville, if you can unpack the network evolution that you just announced in terms of the 5G coverage, I think you -- I think Mike mentioned 106 million people now covered with the Ultra Capacity 5G. Can you explain what that means from the customer experience, so what a T-Mobile customer will experience now on 5G and Ultra Capacity 5G versus what their 4G experience might have been 6 months or a year ago?

Yes. So let me start, Mike. I mean, obviously, we're just incredibly excited about the progress that we've made in really what, from a standing start, April 1, 9 months. And to roll out this network at the pace that we've achieved in the COVID environment, everything else, bringing 2 teams together, I'm just incredibly proud of the achievements the team have delivered to date. And so you think about our journey rolling out 5G at a tremendous pace, and I love to think and talk about 2 things, Mike. The breadth of coverage, Mike mentioned 280 million people, almost the entire country when you think about it, in terms of POPs, close, covered with our 5G service. 1.6 million square miles of 5G that's out there today and so that's 1 million square miles more than either AT&T or Verizon. And so that's a tremendous, tremendous progress. We made real progress on that front this year. And that services to your question about speeds and performance. The speeds on that 5G layer across that 280 million POPs are about double our LTE averages in the industry today. So real strong improvement and enhancement. And that's in stark contrast to some of that low-band footprint that our competition has put out. Mean you probably saw one of the leading media folks that writes about the industry. What they told Verizon customers to do with that 5G before the end of the year was actually to turn it off because it was worse than their LTE performance. That's not what's happening to T-Mobile across that huge geography. Then you come in on the really exciting piece, the ultra-high capacity 5G mid-band layer, which is primarily being delivered by our 2.5-gigahertz spectrum that came through with the Sprint transaction. And to get 106 million covered POPs inside 9 months is remarkable. But the great news is, for me, that's just the first 100 million. We're targeting 200 million nationwide by the end of this year. Before our competition has even started, I mean, the opportunity and the experience we're driving into our base is remarkable. So speeds on that ultra-high capacity layer approaching 300 megabits per second. And think about LTE in the 40 megabit per second range today. So a 7 to 8x multiple, that's what folks are getting on that ultra-high capacity 5G layer from T-Mobile, covering 106 million people. That's 50x, 50x what Verizon has put out there, Mike, in terms of a high capacity 5G service. And that's not my math. That's another analyst house that came up with that math, about 2 million covered POPs for Verizon with their Ultra Wideband, 50x. So across thousands of cities now, major urban and metro environments and now moving into rural America, we're providing a tremendous uplift, a really generational shift in experience and performance with that mid-band layer on top of that great 5G coverage layer that we pushed out and is already doubling speeds on LTE. So I'm just super pumped by the progress we've made. And this is -- Mike said it in the release today. This is 5G leadership. We've been waiting a long time for that to arrive in the U.S. And it's now here, and it's from T-Mobile.

Mike, some of these things that Neville just said sort of showcase the inherent advantage of our model. What Neville just said was we're at over 100 million going to 200 million by the end of this year on ultra-high capacity. And he said that Verizon, in the entire 2 years they've been at this, have managed to accomplish 2 million. Just do the math. That means in 2021, we will do more covered POPs on Ultra Capacity 5G per week than Verizon has done in the entire 2 years they've been at this. That's where we are. That's the advantage of our model. That's network leadership that translates to real advantages for enterprises and consumers.

Neville, 2 other additional questions on this. The first 1 is, as you think about that progression of getting you that 106 million today versus getting to that 200 million, how are the investment and the activities to get there different? Or are they similar? Is it the same type of blocking and tackling versus you have to go to new sites or you've been upgrading sites? Just trying to think about the execution of that. And then secondly, can you share with us when the Sprint network could be fully shut down?

Yes. So let's take the second piece first. I mean we've talked about, and Peter referenced this, our process is to get this network built first and foremost, right? So get the capacity there so that we can migrate the Sprint customer base across. And then we can start this decommissioning process, and that's not going to happen overnight, Mike. I mean the good news on the build -- and I primarily talked the last second there about our 5G build. I want folks to understand that when we're building and upgrading these sites and adding that wonderful 2.5-gigahertz spectrum to these sites, we're also adding LTE as well as 5G. And so that's building the capacity that we need to support that customer migration. So build first LTE and 5G on the anchor network. Migration, we can come back to that and then decomm. So it's going to take us some time, several years, right, to work through that entire process. But that, we are absolutely ahead of the schedule that we put in place when we were doing deal advocacy, say, a year ago. And then to your question about where are we in the process, and I think you were trying to highlight is there execution risk in what we're at here. And this is the great piece of the story. We spent the last 9 months of the -- of 2020 building a network factory that can produce sites and site upgrades and this wonderful 5G experience at a tremendous pace. I mean we were hitting 1,000 sites a week being upgraded. And that is absolutely our plan to work through not just '21 but '22. So we have built a factory with the supply chain, with the resources, with the capabilities, all of the engineering, all of the radio gear. Everything we need, we worked steadily through 2020 to build that ramp and that pace and that capability so we can move into '21 and just start hitting this thing. Now that's a point in time. So we're in production mode on this fabulous network that's going to get built across the entire country that we committed to do. And absolutely, that's going to happen. Our competition, they've not even started, Mike. They have no idea, the factory and the process and the resources and the vendor support that we put in place. We've built a powerful network machine, which is now running at a tremendous pace. And we were ramping and building that energy and excitement and capability into the business as we moved through 2020. In '21, now we execute at that steady pace. And so incredibly confident about the ability to build out the network, build that capacity for migration, build out that superiority on 5G. All of those things are now in our sites because of all the hard work that we executed in 2020.

As a number of cities have experienced a second wave of the pandemic, has that created any challenges for you that you had to navigate through over the last couple of months or create new challenges for 2021?

Of course. It's just -- it's terrible what's going on. And we had thought that things were easing off over the summer. We ramped up really fully operational from a retail standpoint. As we sit here, we have several hundred stores closed, about 300 stores. And that was the case in Q4, and it's factored into the results that you saw. There are places where jurisdictions have caused us to close down because there are actual stay-at-home orders, like last spring, in place and other reasons in other places. And so it's a shame what's happening. I just -- I know I've said this twice already, Mike, but if you'll indulge me, I'm just so proud of the team. Our team has done a tremendous job figuring out how to serve customers in this environment, virtually, hands-free, contactless but also at our stores, keeping them safe and operational, by and large, across the board. And it's one of the reasons why we're able to so proudly announce these results today, is that our incredible team has done just incredible work to serve our customers in this environment. But yes, it's very real. It was certainly the case in Q4. But there's a light at the end of the tunnel. And my personal opinion about vaccine production is such that we're in the tough part right now where it looks like it's going slowly and a little bit of chaos. It's a little like last spring trying to get your hands on hand sanitizer or toilet paper or masks. But suddenly, supply outpaced demand, and you could -- it was widely available. It flipped quickly. And I think it would be a mistake to extrapolate the current slow rate of initial rollouts of the vaccine to conclude that it would be that slow through '21. I'm personally an optimist on this. I think we're going to see widespread vaccination by the middle of the year and that a lot of the dynamics that are affecting this market, including the very muted switching environment that's been a headwind, those will abate through '21.

Let's take a look at the results of the first survey question that we asked. So for those that can't see the results, 32%, 2.5 million to 3 million. And this is postpaid phone net adds for 2021; 28%, 2.1 million to 2.5 million; 20%, more than 30 million (sic) [ 3.0 million ]; 17%, 1.6 million to 2.0 million; and 3% at 1.5 million or less. So Mike, I welcome your reaction.

Well, that's -- I appreciate that. And that's all the time we have for today. I need to go get sell in some rate plans. So we'll see you next year.

Well played. I think now we have to add 15 minutes to our time today.

Yes. We're not going to guide you today, but I appreciate you asking everybody that. We are planning, when we release our full financials, to give you a picture of not only '21 but a multiyear view as well, so we're excited about all that.

If we could turn that question a little bit. In the past, you've talked about a bunch of micro verticals that you've been focused on, whether it's the over 55, the military. You talked about the business segment. How do you think about the progress that you're making in some of these verticals that you've been targeting to improve your share? Where is there more opportunity? Where are you seeing good momentum? Maybe you can unpack where some of the growth continues to come from.

Yes. I'd love to. I'm a little hesitant to give too much because it's -- there's some secret sauce in here, but we've been really transparent with you about the pockets of opportunity. Small town rural, you mentioned. It's 1/3 of the country. It's a huge -- this isn't -- I'm not talking about little towns in little states. I'm talking about all of the towns in all of the states that aren't the major cities. And it adds up to 1/3 of the population and we're significantly underrepresented because of our historic position on network and brand. And now we have an opportunity. And so it's so exciting. We've got the team rallied around this. And it starts with the network production that Neville just talked about not just on 5G, which addresses part of the population but on LTE as well, which addresses the entire embedded base. And so that's huge. Enterprise and not just our historical position of being a price cop that allows you to maybe get a little leverage so that you can get your AT&T deal repriced but to take the whole thing, to get into those RFPs and win them end to end like we've been doing. That's one of the reasons why we posted these results. You noticed an all-time record on postpaid other this year in 2020. That's an example of the reason why we're exceeding, is performance in enterprise and public sector. So that's terrific. So prime suburban families, prime credit suburban families, another great opportunity. Although we've been at it for 3 or 4 years, over 55 and military, another place where we're still underrepresented. So lots and lots of opportunity. And that's terrific because, as the #2 provider, we also intend to be the growth leader. And in order to do that, we have to be able to go successfully penetrate places where we've historically lagged, defend our strengths and that means we have to have an incredible value proposition. And that's why it's so important that we are able to simultaneously be the value leader in this industry and increasingly, the network leader at the same time. No one's ever been able to do those things. You combine that with the secret sauce of the Un-carrier, delivering the best experiences from the best team reliably, that's a winning formula. And you see how that's translating to results. Even in periods of muted switching and other headwinds like 2020, we were able to deliver the highest postpaid net add performance in our history in 2020. It gives us a lot of optimism looking forward.

We're going to introduce another survey question, which is when do you expect T-Mobile to reactivate meaningful share repurchases, and the choices are: 2022, '23, '24, '25 or expect dividends instead of future share repurchases with the excess cash. So we'll go to the polls on that. But while we do, can you frame the opportunity to potentially migrate your customers to higher spending tiers? And what's the opportunity? What could be the catalyst for that? And does the 5G and the 5G ultra wideband or speeds play a role in that potential migration?

Yes. Mike, I'm glad you asked about that because there are exciting opportunities there. A few minutes ago, Peter talked about some of the potential headwinds when it comes to ARPU going forward, like our success with family plans, et cetera; but I want to make sure people don't misinterpret. There's also a lot of potential tailwinds here and growth opportunity, and you just asked about one of them. Our competitors have been after this for a while of having various forms of unlimited, not very unlimited, somewhat unlimited, super-duper unlimited, et cetera. And there's a little bit of, I think, cynicism that has emerged among consumers. But the truth is while we're honest with ourselves, there's an opportunity there. If we can do it in a way that's true to our brand as the Un-carrier and don't create the kind of confusion that our competitors are creating, but yes, there is an upsell opportunity there. We're not going to miss it. So there's plenty of opportunities. I can't forecast for you our moves, but I can just say the premise of your question, I accept. And yes, look, we were leaders at the beginning of some of these concepts that the others have been emulating, like the idea of bringing highly valuable media into the bundle. We led the way several years ago with Netflix on us, still the most exciting bundled offer in the market because it's Netflix, by far, the leader. And it's not just a bait-and-switch trial for a few months. It's an ongoing evergreen benefit of being with the Un-carrier. That's how we roll. So obviously, we led the way there. Others have successfully emulated. That's what we do as the Un-carrier. We start trends. We change the conversation. We showcase what value looks like and what the next trend is going to be, and then everybody else follows. And you can bet we're going to be doing that again and with an eye towards helping customers to see that there's opportunities for them to deepen their relationship with the Un-carrier. And that means, sure, finding opportunities to move up the curve. I will say that linking media to the higher tiers might turn out to be a mistake for our competitors. For us, our Magenta plans include Netflix On Us because, remember, the margin between those plans isn't that great, and they're chewing up a lot of the margin with those partnership costs. So for us, that's a reason to switch to T-Mobile. I'd like for higher-margin opportunities to be in that delta so that when we get that ARPU, it comes in mostly to the bottom line. And that means how we monetize the network capacity. The highest capacity network in U.S. history, how do we translate that into value for our customers and show them that there's a reason for them to trade up? And I think there's a lot of opportunity there.

Speaking about those bundles, you introduced TVision. Is there some experience or some learnings from that, that you can share? And how should investors think about the positioning and the place of that product in your portfolio over time?

Yes. Of course, there's plenty of opportunity. What we said when we launched it remains true, which is it's neither a massive cost center nor a massive profit center. It's a reason to love T-Mobile and particularly as it relates to our emerging aspirations in home broadband. I've been saying for a long time, while we sequenced this due to the merger, that we would do it when it was time to get after broadband. And now we're getting after broadband, and it's important to be able to have a great TV offer because people often make that decision at the same time. Or said another way, a lack of a TV offer might be friction on switching them away from big cable. So for us to be able to come and say you can have 5G home broadband with terabyte capacities and hundreds of megabits per second and everything you need for a great experience and have a seamless TV experience delivered at the same time at incredible value, that's terrific. So that's why we did TVision. I'm really proud of the product. I use it. The team did a great job on it, and it's going to evolve and get better over time as well like every product does. But we timed it for that reason. The other thing we did was we made it available at disruptive pricing, and therefore, it's available, at least initially only to T-Mobile and Sprint customers. And that just again is another showcase of the value you get with T-Mobile. These are sort of oh-my-God prices on these TV packages and you get that when you're a T-Mobile customer.

Is there an update on the amount of traffic that's now on the T-Mobile network from Sprint customers?

Neville?

I'll take that one. So the last stat we provided, Mike, was for last quarter earnings. We said about 15%. I can confirm for you now that number is north of 20%. And just to give another dimension to that, as I said earlier, a lot of what we were doing in 2020 was building the tools and capabilities not just on the network but across our entire technology stack, how we service and support and sell to our customers. And so building that capability to migrate customers was a big part of the foundational building blocks we have to lay down in 2020. And so the number to date, so if you look at customers that were legacy Sprint who now spend the majority of their time, vast majority of the time on the T-Mobile network, that number is now about just north of 4 million customers. So that's the first time we provided that data point. It's a tremendous start when I think about we had months to get ready to build that capability to cross provision and allow Sprint customers to move on to the T-Mobile network. All of that work, the foundational pieces all put in place in 2020. So may sound like a small number. It's a great number for us because we've just got started, and that traffic volume moving is tremendous. And so really excited about our progress there. Again, 2020, a year of build; and you'll see us, as we move through '21, really ramp up on both of those stats.

If we come back to the survey question, we can take those results. And so the question was -- and I'll read just the answers for our audience who can't see the survey -- when do you expect T-Mobile to reactivate meaningful share repurchases. 44% indicated '23; 30%, '24; 14%, '22; 10%, '25; and 2% expect dividends instead of future share repurchases with excess cash. Curious if there's any reaction on this survey answer. But also what's the preference? Is the preference still for buybacks? Or is there an evolution between the balance of dividends and buybacks as you think about that point where you have excess cash and you're ready to repatriate?

Well, look, the way we think about it and aspirations, as Mike laid out early on, we continue to seek to be a profitable growth company and an engine. And so probably, the way we're thinking about it right now is shareholder remuneration would be in the form of share repurchases. And that affords us the flexibility to continue with that growth engine that we want without being straddled with the dividend for the time being.

Mike, the thing about -- when you look at this model and just extrapolate it forward, which I know you've done some work on, the cash flow potential of this business is enormous. And it's -- the scale we've achieved now and the ability to unlock synergies and continue to take share and then tackle cost, it's just -- it's an incredible model. And of course, we're going to take a lot of that, and we're going to invest it in value for customers and keep the terminal value of this business going with a superior growth profile. But there's real opportunity for us to be able to take that outsized cash production and translate it into shareholder value. And we don't -- we can't forecast it for you today. We do have plans to do so, so stay tuned. But it's an exciting reason to love the T-Mobile story.

Got one more survey. Wouldn't be complete if we didn't ask an M&A question after the last few years. Of course, we're asking about the Sprint deal. So we thought this year we'd bring back a survey question. Should T-Mobile eventually merge with one or more cable firms in the future? And we made it really simple, yes or no. We'll come back to that in a moment. When you think about the competitive landscape, was there anything that was really surprising to you in terms of the intensity of the 5G handset promotions, the intensity of rate plan bundles or anything that gives you pause or concern about the way customers may ascribe value to the service that they're getting over the next few years?

No. And it's interesting, I get this question a lot, which is isn't this a crazy, intense period of competition. My answer is, yes, it looks about normal to us. The thing -- the dynamic that's not that normal is the muted switching environment, which I've addressed. The majority of that is due to short-term temporary COVID-driven dynamics. A little bit of it's due to some policy shift over at AT&T, so things are going to be really expensive to them from a margin standpoint. But generally speaking, those dynamics are temporary. And so that's the only thing that surprised us. All the device stuff's just stuff you see when there's big phone launches, and same thing with rate plans and so on. You've got a competitive market. You've had a competitive market for a long time, and we love a competitive market.

And investors ask me about what postpaid phone net adds on the industry level looks like, and they look at that to try to think about who's going to get what share of that. Is there anything that you see on an LTM perspective and, as you look forward, that would change the trajectory of industry net adds that's been somewhere between 2 to 3x population growth over the last couple of years?

Well, it's going to depend on so many dynamics. One of it is, if you look at the sum total of postpaid and prepaid, it's been more rational than that assessment. So there has been share taking from post to pre. As I've said, lots of dynamics like a strong economy, meaning more people qualify for postpaid, value proposition enhancements on postpaid like bundled media led by T-Mobile and others causing people to prefer postpaid and therefore, pool family resources and involve extended families that would have otherwise been on prepaid, those kinds of dynamics have unfolded. But there are other dynamics coming. One of them that people don't talk about much is that 5G will certainly be a catalyst for plenty of opportunities at the account level beyond the smartphone. This has always been a dynamic in our business, but it hasn't been that big if we're honest with ourselves. Smartphones have dominated everything, and 5G brings down so many of the barriers that have inhibited beyond-the-smartphone kinds of hardware and software solutions. And so we're very interested in those spaces. Those have opportunity for upside from an account relationship. And one of the things I think is important to start to wrap your head around as you assess this market, you start thinking about it at a household level because, as Peter talked about earlier, there are things out there that could happen. It would be highly shareholder value accretive that might actually bring down the monetization per device. And who cares? As long as the monetization per unit of capacity on our network looks right and the monetization per cost structure looks right and per investment in that new flow of revenues looks right, then it's accretive. And there's a lot of accretive things that we think 5G will help bring along.

We'll take a look at that last survey. We'll get the answers in here. So 60%, no; 40%, yes. What are your thoughts on the opportunities, whether it's alliances, mergers, to do more than what T-Mobile can do? Or do you believe you have all of the necessary assets to prosecute the opportunities to grow, get the margins you're looking for, the free cash flow you're looking for?

Well, first of all, Mike, I have both PTSD and exhaustion from the last one still. So I can't sort of wrap my head around that. As we work that -- we never planned to work on that for 2.5 years, but we worked on it for 2.5 years and for good reason, all the things we had the privilege of talking about on this call. But look, we have this incredible model. We have a pure-play wireless company in a market that's moving to wireless. For years, the broad trend has been so simple. All content and communications of all kinds are leaving their former linear forms and landing on the Internet. And the Internet's going mobile. And here we are as the #2 and best-positioned pure-play mobile company with a team that loves mobile, that executes mobile, that's famous on execution. That's a great place to be, great assets and a great team. So look, we love our model. We think the trends favor our model, and so we'll have to see how all that unfolds.

Any preview for what investors should expect from your upcoming Analyst Day, time frame or some of the updates that they might receive?

Peter?

Yes. Well, I got to tell you, we're very excited to get analysts out there, and there's a few things that we really plan to do. One is bring more of the leadership team out to really give you a deeper dive into the strategy, some of the growth opportunities that Mike's talked about and where we plan to go as a company. And of course, I know there's a lot of interest around an update around synergies, what the NPV looks like, what cost to achieve looks like and probably most importantly, what does our mid- and long-term outlook look like from a margin perspective, an EBITDA perspective and free cash flow. And that's where really we're excited to get out and tell the story. You've seen us execute to date. You've seen the opportunity, and Mike just described. As we unlock synergies and as we continue with profitable growth to leverage the fixed costs that we have and monetize the network that Neville and team are building at a rapid pace, the opportunity in front of us, that free cash flow generation opportunity, which is the true value creation measure of a company and how that may translate into shareholder remuneration, all those things, we're excited to talk to you about. So stay tuned. We'll announce the date soon and looking forward to having everybody join.

When we get asked about 5G, I think there's 3 buckets that people think about: the enhanced mobile, the fixed wireless broadband and then the IoT and the business-to-business opportunity. Can you frame how you look at the IoT and business-to-business opportunity for T-Mobile?

Of course. Just starting with the enterprise opportunity. It's really fascinating. 5G offers a potential superior solution, and it's playing right into the trends that enterprises have been chasing for years, which is essentially the service-zation of formerly operated services by companies. And you've seen so many things go through a SaaS transformation. And networks can do the same. It's certainly something I would be considering if I was starting a company right now. Should I be building my own corporate networks based on legacy WiFi technology? Or should I be building a network based on more secure dedicated spectrum, higher capacity and superior propagation of 5G technology? And the question's going to come down to can we make it a great value, can we make it simple, can we reach enterprises. And it'll start with the extreme use cases. You've heard so much talked about robotics and factories, et cetera, but it won't surprise me if corporate campuses start to adopt this technology, one connection, very battery efficient, very secure, great propagation and so many other advantages. So look, the idea of a company being able to outsource this on dedicated spectrum with reliable throughput and capacity, to us, that's a great opportunity. And it comes just at a time when we're hitting our pace at having these corner office relationships with enterprises, as I talked about earlier on this call. So that's a terrific opportunity. We'll have to see how it all unfolds. Secondly, IoT, I talked about this, I think, in passing already, which is what I meant by beyond the smartphone. And I have to say this is one of those overused buzzwords, and the sky is not going to be raining with 5G devices anytime soon. But that being said, the technology trends are very clear, which is low-cost modules with fantastic battery life, ultra-high capacity. These are things that open up innovation opportunities that weren't here in the prior era. And we've seen over and over again what they -- what that can create. 4G was a case study in how smartphones suddenly became a life-transforming technology that we've all adopted globally, and there are certainly some of those opportunities in 5G. Our job is to build a high-capacity network that's very friendly to hardware and software innovators so that they can do their thing. Whether they're the biggest companies in the world like Apple, Google, Facebook or whether they're teams in garages that, like in the 4G era, that became the unicorns of Uber and Snapchat and Instagram and Tinder and so many other things have changed the way people live. And so 5G brings along all those opportunities. Our job is to be developer friendly.

To close this out in the final minute, is there anything that you feel is underappreciated by the investment community that you want to highlight or anything else that we should be mindful of over the next 12 months?

I want to make sure people understand it. I think you heard it from us, so I don't think it's underappreciated. This team, look, we love to move quickly. We love to take share. We love to compete. That might make it look like we're growth hungry. And the truth is what you have here at T-Mobile is a disciplined team that understands the price. We understand the balance of growth and profitability. We're absolutely maniacally focused on unlocking the value of this newfound scale of ours and leveraging this superior asset position for superior shareholder value. Right now that looks to us like the best way to do it, is to grow, outpace the market and take share, and we'll keep watching those circumstances. But this team has our eye on the prize, which is to create a machine that has huge cash flow potential for our investors while simultaneously enhancing and changing the lives of our consumers and businesses. And that balance is something that I'm very proud of; and yes, it doesn't always come across in our bombast.

Mike, Peter, Neville, thank you so much for sharing your time with us today. It's great to see you and look forward to doing this in the future but in person. So thank you.

Great. See you soon, Mike.

Thank you, Mike.

Thank you, and thanks for our audience for joining today.