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

[Presentation] Hey, everybody. Well, thanks so much for joining us today. I love Un-carrier days because these are the days that we get to share with the world the things we've been working on to change wireless for good. I'm here at our headquarters in Bellevue, Washington. And I'm joined by Edwige Robinson in Downers Grove, Illinois; and by Jon Freier in Manhattan, Kansas, and they're going to help me break down the news today. And we have 3 big things to share with you today. Today's Un-carrier news has literally been years in the making because, as you know, 3 years ago this month, we announced plans to merge with Sprint. And at that time, way back in 2018, we talked about our vision for a faster, more inclusive future, something we called 5GforAll. With the unique combination of our resources, we said we could truly build something remarkable, a network like no other in history. A 5G network for all, that spans all across this country, especially in smaller markets and rural areas where choice and competition has been sorely lacking in both wireless and broadband. A network that's the foundation of everything. We're here to share with you today. Now I think everybody watching knows that there has been so much talk and hype and honestly, very mixed results when it comes to the big wireless companies, and all the bluster around 5G. The other guys have been excitedly promising our transformed 5G future for years, and their customers have, frankly, gotten a little bit bored waiting. But for T-Mobile customers, 5G is here. It's nationwide, and it's amazing today. Early adopters are blown away by its speeds and performance. But here's the thing. Most Americans can't take advantage of 5G because they don't have a 5G phone, and that's something the other big carriers would rather you ignore. Despite all their bluster and hype, the record-shattering amounts of money they've spent on radio spectrum, the billions spent to shout at you about 5G on all those TV ads and all the breathless talk of the 5G future, there is this simple fact. At last count, 92% of Americans can't use 5G because they don't have a 5G phone. Well, we're going to fix that today. And we're doing it the Un-carrier way. Not a dollar's off promotion or a short-term gimmick because today, we're launching the great American free 5G phone upgrade. Today, we're upgrading America to 5G, and of course, we're doing it for free. So welcome to the free 5G phone upgrade and get ready to be connected with speeds and network capacity and app performance on your mobile phone like never before. We're giving every single person in this country a free trade-up to an awesome Samsung Galaxy 5G smartphone. You heard me right, every single person, new and existing postpaid customers can get a free 5G smartphone and it's brand new, it's a Galaxy A32 from Samsung, 5G. All you have to do is trade in an old phone. And no, not just the last year's model. Literally, any mobile phone, still using a Razr, a Sidekick, whatever that suitcase phone was, a flip phone, bat phone, doesn't matter. As long as it's in working condition, you can trade up to a brand-new 5G smartphone and guess what? It's on us. It's the great American free 5G phone upgrade. And it's free because we want every single American to see what they've been missing, now that T-Mobile has the largest and fastest and most available 5G network with mind-blowing speed and capacity. That opens up all kinds of new capabilities from better video calling, 4K, high-def media, more responsive gaming, blazing fast mobile hotspot service and all kinds of new apps and experiences that are still on the way. And that's just our first piece of news because the thing is, it's not just the phone that's preventing Americans from enjoying 5G access. Because once you have a 5G phone, you typically also need a 5G plan. And that's where the carriers really get you. Here's one of their dirty little secrets. Even if you're part of the small percent of people who already have a 5G phone, you may not have full 5G access because your plan with the other providers actually limits it. AT&T has 7 different plans, 4 of them with no 5G access at all. Verizon has 11 different plans, 7 of them with 0 or only some 5G access. They slice and dice 5G into a ton of different flavors on different plans, just so they can upsell customers into their most expensive plans in order to have access to their full 5G network? Well, guess what? We're taking on that problem, too, because we're also launching the great unlimited trade-up today. And we're giving everyone with a limited or shared data bucket plan from Verizon or AT&T who switches to T-Mobile, an unlimited 5G plan with access to our entire 5G network at the same or better price than the other guys' limited postpaid plans with limited 5G access at AT&T and Verizon guaranteed, not $0.01 more for unlimited and real 5G. And you get our full 5G network, ultra capacity 5G, an extended range 5G. We didn't just build the biggest and fastest 5G network only to slice it and dice it or to have it held back by data limits. That's why we're also unlimiting all existing Sprint and T-Mobile customers who are still on any limited plans out there. If you're already with T-Mobile or Sprint, the great unlimited trade-up applies to you as well. Most of you don't have to do a thing, just enjoy full unlimited service. So you can take advantage of your 5G access starting on April 18. No extra charge on your current plan. So welcome to the Magenta family Sprint customers. This is who the Un-carrier is and how we do things. Listen, this is why this is important. Did you know that right now nearly 60 million people are still stuck on those limited and shared data bucket plans with AT&T and Verizon, most of them without full 5G access. Do you believe that? 60 million people. Verizon actually spoke about this to Wall Street last month. See, if you're on a limited or shared data bucket plan, they're worried that you're paying too little. And they told Wall Street their big plan is to get you to pay more. If you stay with them, they said, they'll try to move you into higher-priced premium plans to get 5G, and you could pay 32% more for that. That's literally part of their growth strategy, moving you to way more expensive plans just to get what everyone should already have by now, unlimited 5G access on the full T-Mobile network. Well, at T-Mobile, we've got a plan for the carriers' customers too. Unlimited 5G for the whole family on the nation's biggest, fastest and most available 5G network, and you won't pay $0.01 more than the carriers' limited plans. And listen, this great unlimited trade-up offer and the free 5G phone upgrade aren't short-term promotions. They are here to stay all year long. This is the year of 5G. While the phone might change, we'll continue to offer a free 5G phone with trade-in throughout this year to ensure that everybody has the chance to upgrade and to ensure that America leads the way in the 5G era. We built the largest, fastest, highest capacity 5G network in America for a reason. It's for the millions of hard-working people out there who deserve more from the wireless industry. We build it because we saw how Verizon and AT&T used their leadership in the 4G era to write the rules for that time. And those rules were awful. But they're not the leading networks anymore. Verizon and AT&T are a good 2 years behind us in the 5G race, and they won't catch up anytime soon, if ever. And that means that now T-Mobile is writing the rules the way they should be written. The way the Un-carrier does wireless. We're giving everyone the ability to upgrade to 5G real, full, no BS, 5G without paying more. A trade-up to a 5G phone on us, and no extra charge for full access to our 5G network guaranteed, even if you're on a limited or shared data plan. And all of that is just the start of our news for today. Next up, we're here to upgrade America's homes to 5G also. I'm proud to announce that we're launching T-Mobile Home Internet today, and we're going big. Today, on our first day of commercial availability after our pilot programs, more than 30 million homes are now eligible. Let me put that into context for you. That's almost 1 in 5 American households available today. And that makes T-Mobile one of America's largest ISPs by service area. Now Verizon says they won't even reach that many homes in their fixed 5G wireless for nearly 2 more years. In fact, here is a list of cities and towns where T-Mobile Home Internet is already available. [Presentation]

That's a lot of cities. Hundreds of cities and towns, in fact. All right. You don't have to read all that. I'll come back to how you can find out if your home is covered later. But listen, we can launch big because we've built the network, and we've been piloting home Internet for over a year to really nail the customer experience. And the feedback has been amazing. In fact, our pilot customers give us a Net Promoter Score that's 104 points higher than their previous ISP because our service is so simple and fast and straightforward. In fact, customers joining T-Mobile Home Internet will get average speeds in excess of 100 megabits per second. Take a look. [Presentation]

And with Netflix on Us and great offerings from our TVision initiative like YouTube TV, Filo and more, millions of American families can save hundreds of dollars each year with T-Mobile. And that's so important. Huge savings every year for wireless home Internet and TV. And the best part, you can cut the cord with the cableopoly for good. We can make these big 5G moves today because of the tireless work of our network engineers. That team has been absolutely crushing it in the rollout of 5G from the moment we closed our merger. And you know what else, of those 30 million eligible homes, nearly 10 million are in rural areas and small towns. Why? Because from the beginning, one of our most important goals has been to ensure that small town America isn't left behind in this generation of wireless. 5GforAll spans nearly every part of this country, small towns as well as big cities, rural areas as well as the suburbs. The unfortunate truth is that from the beginning of the digital age, connectivity for rural America has been an afterthought. We live in an age when so much of what we do in our lives from work and school to basic communication and entertainment depends on a fast, reliable Internet connection. Yet more than 1/4 of Americans who live in small towns have no way to get broadband at home or for their business. That's more than 15 million people. And it's not just about access. Nearly 40% of rural Americans who have broadband live in areas with only a single Internet provider, and they get what they get. No options and no alternatives. And we all know what happens in a 1-company town for broadband or wireless, you pay higher prices for slower connections. And as a special bonus, you get terrible customer service on top. Take a look. [Presentation]

So I'm also here to let you know that we're going to make sure that small town America is not left behind anymore, thanks to the unprecedented scale and coverage of the nation's largest, fastest 5G network. When we save 5GforAll, we mean small towns and rural areas and out beyond the suburbs of the bigger cities. And we've got even more news to share on what we're doing to help connect all of America later on in this event. So hold on tight for that. But first, it's my pleasure to introduce Edwige Robinson, our Senior Vice President of Field Engineering in the central region, coming to you from Downers Grove, Illinois to tell you more about the network that's behind everything we're announcing today because it's the network that makes it all possible. Over to you, Edwige.

Thanks, Mike. I'm so excited to be part of this great day. And you are right, our network really is the story behind today's news. And in my job, I get to see the impact that network has every day on our customer. At T-Mobile, we've wanted to serve rural community, but we just didn't have the scale of a spectrum to provide the coverage small town need and a small town deserve. That was before Sprint and T-Mobile merged. Now we can finally do what we have aspired to do for so long, revolutionize connectivity in small town, just like we did for those in city and suburb across the country. We are going big for small town, Un-carrier big by launching rural America biggest 5G network. Out of 1.6 million square miles our 5G network covers, 1.45 million of them are in rural and small town America. That's nearly 5x more than Verizon and over twice as many as AT&T. That is what we mean by 5GforAll. But it's not just big and fast, our 5G is also reliable. Just this week, independent research firm umlaut released a new report showing that T-Mobile's largest and fastest 5G network is now also the most reliable 5G in the U.S. Largest, fastest and now the most reliable, too. Yet another reason why T-Mobile is the leader in 5G. And we are not just bringing a great 5G network to most part of America. We are bringing everything the Un-carrier offers. Too many of our real friends and neighbors are locked into plans that come with slow speed, high bill, data cap and outages fees. At T-Mobile, we eliminated those things for urban and suburban customers years ago. Rural America, now it's your turn. Time to get unlimited data, no outages and tax or fee included in most of our plans. Not to mention free stuff every Tuesday. And Scam Shield for protection against unwanted calls on the network that's 30% better at stopping unwanted calls. To tell you about how T-Mobile is investing to unleash the power of 5G in local communities, here's Jon Freier.

Thanks, Edwige. Wow, what a day. I'm coming to you from the greatest city in the world, Manhattan, Kansas. Listen, I grew up in rural America in the vast oil fields of West Texas. Whether it's a small town in West Texas, a small town right here in Kansas or anywhere else in America, I just love small towns. I love their unique spirit. And I love how residents take pride in their communities. I have seen firsthand how technology can create jobs and foster opportunities so people can live and work in the towns that they love. I also know about the economic challenges that many rural Americans are struggling with. In order for small towns to thrive, affordable, high-quality 5G wireless and broadband internet services are essential. But we also know it will take more than just better infrastructure. It will take a long-term commitment to the people and local businesses that are the real heart and soul of small town America. I'm proud to say that our goal at T-Mobile is to be your hometown network and to be a part of your community for the long term. So as part of today's announcements, I'm excited to announce hometown jobs. Our plan to create 7,500 new jobs in rural communities. Over the next 2 years, we will open up hundreds of new stores in small towns across America. These stores will create 5,000 new jobs, along with thousands more for the people who build, furnish and maintain them. But as much as we'd like to, it would be very difficult to open up a store in every town, so we're doing what the Un-carrier does best. We're creating a new model to disrupt the status quo. We call this program Hometown Experts. Hometown Experts are the official T-Mobile representative in your community, like a one-person store but without the physical building. They can do everything a brick-and-mortar store does, like getting people connected to T-Mobile's 5G network with their smartphones, getting connected to 5G home Internet and helping customers with any other needs that they may have. Our mission at T-Mobile is to be the best in the world at connecting customers to their world. And now with Hometown Experts, we will be able to do exactly that in thousands of smaller towns throughout America. Not only does this bring a more personalized wireless experience to many more places, it's a massive job creator, too. We plan to hire and train 2,500 Hometown Experts in 2,500 small towns over the next 2 years. And we're getting started today, right now, as our first 1,000 new Hometown Expert jobs have already been posted. Just go online to apply. I'm so excited to see what kind of an impact these hard working entrepreneurs can have in their hometowns and on T-Mobile over the coming years. Now before I hand it back to Mike, I have one more announcement to share with you. Today, we're also announcing T-Mobile Hometown Grants, a new program to support rural communities across the country. Over the next 5 years, we'll grant $25 million to fund local community revitalization projects. Maybe the local theater needs a refresh or there's a need for a farmers' market pavilion or a new playground equipment for the town park, we're here to help. We expect to award 100 grants a year to jump-start stalled projects and get new ones off the ground in small towns all across America. I can't wait to see how these grants spark innovation, ingenuity and hard work that have always been the hallmark of our small towns and the bedrock of America. Now to wrap things up, back to Mike Sievert.

Well, as you can tell, all of us at the Un-carrier are incredibly excited by the impact that 5G is going to have. And that's why we're making sure it's available to as many people as possible. So I know we've thrown a lot at you today, and I want to give you a quick recap of our news and how we're leveling the field for customers in 3 big ways. First, we're making 5G available to all Americans with the launch of the free 5G phone upgrade. You bring your old phone, we upgrade it to a 5G device for free, new and existing customers alike. And if you're coming from a limited or shared data plan with the other guys, you get full 5G unlimited at T-Mobile and won't pay $0.01 more than they charge for limited access because it's time to move past having to decide between limited access or higher prices. Second, we're launching T-Mobile Home Internet to 30 million homes, 10 million of which are in often underserved small towns and rural areas, and it's available starting today. You can see if your home's included at t-mobile.com or stop into one of our T-Mobile stores where we're safely open for business. And third, we're creating thousands of jobs in rural communities, opening hundreds of new stores across the country and providing $25 million in grants, investing in the communities we serve. We merged with Sprint because we recognized that together, we'd have the resources to build a 5G network to serve all of America, including those who've been neglected for far too long. We've been dreaming about the day when we would announce these big steps. Little did we know that the timing would be perfect. Because just as we're making 5G available across vast swaths of rural America, many people are seeking out those exact places right now to live, work and play. And they need fast, reliable and affordable network connections for their phones and their homes. More than 80% of businesses say that some employees will continue to work remotely at least part of the time after the pandemic. And a recent Gallup survey found that nearly half of adults want to live in a smaller town. We're already seeing the first signs of a major demographic shift as people begin to migrate to smaller cities that have a strong digital infrastructure. The pandemic has only made it clear that a strong, fast, wide-reaching network is more essential than ever. Now it doesn't always matter where you live, but it does matter how you're connected. The time is now. But Verizon is years behind. AT&T, too. Cable, they're enjoying their monopoly. But T-Mobile's ready to kick start this new era of connectivity and competition. Today's news is big, but we're just getting started. And we know there will be a little more demand initially than we can serve. So as we complete our network build-out and bring broadband to more homes and as we develop larger supplies of our home Internet gateways, I encourage customers to get in touch with us online at t-mobile.com or at one of our stores. And we'll stick with you until we can bring the lower prices and better service of 5G home Internet to you. Thanks for your excitement and for your patience as we lead this industry to a better place because we will continue building, growing and expanding this already-leading 5G network at a blazing pace. And we'll continue forcing positive change in this industry and fighting for consumers. That's what the Un-carrier does. That's what we've always done. And this is important because this time, it's about fighting for and serving communities that have been underserved for far too long. This is what T-Mobile means by 5GforAll. So happy launch day, everybody, and thanks for joining us. [Presentation]