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

[Presentation] Thanks, guys. Well, as you can see, we're here today to talk about broadband. T-Mobile launched into home broadband last year around this time. And today, we're taking the next big step to fix this broken industry and take on the Internet providers that have failed customers for so long. Today, we're bringing the Un-carrier to broadband with Internet Freedom. And this couldn't be more important. Over the last couple of years, we've all seen how vital broadband really is and how lousy the old Internet providers really are. Today's Un-carrier move tackles pain points that have plagued the customers for years, pain points so ingrained in the way this industry works, we've just come to accept them as normal. But that ends now. Up first, freedom to switch. We're making it easier than ever to switch. Broadband customers are stuck. Switching almost never happens. I mean think about it, Internet providers rank dead last in customer satisfaction out of all industries, year-after-year. People want to switch. They just can't. That's because there's almost no choice in this category. Tens of millions of households still have no choice for high-speed broadband, no competition whatsoever. It's still a home-by-home, business-by-business monopoly for far too many across this country. But even if you do have a choice, you don't even think about switching because the Internet providers make it such a nightmare. First, they've got you locked in a contract. So you pay a penalty if you want to leave. And right now, Americans are on the hook for more than $1 billion in early termination fees from their Internet providers. Second, if you do switch, think about that process. You've got to wait for your installation window sometime between now and next February, drill holes in your walls to get everything set up then spend the next week resetting all your connected devices for your new Internet provider, all of that before you even know if it's going to work for you. Today, we're ending all of that, and making it easier than ever to break free from your Internet provider for good. Here's how: With Freedom to Switch, we're going to let you cheat on your Internet provider. We're launching Test Drive for Home Internet. Listen, we're so confident in our network, if your address qualifies, we'll let you try it worry-free for 15 days. If it works, you're good to go. Welcome to the Un-carrier. And if not, return the gateway and owe absolutely nothing. It's 100% on us. It is so easy to set up and use. It just takes a few minutes. We'll ship you a gateway, our app will tell you the best place to put it, plug it into a power outlet, follow a few prompts and you're up and running within minutes. You can even keep your old service while you give us a try. This is the way broadband should be. On top of that, we're making it easy to break up with your Internet provider by getting rid of those early termination fees. We're doing it the same way we did it in wireless, by paying those ETFs for you up to $500. So when you're ready to break up, you can cut the cord and cut the contract at no cost because we're paying the bill. We're doing all of this because at T-Mobile, we want to be the broadband provider you choose, not the one you're stuck with. We don't want you to just sign up, we want you to be happy. We want you to love T-Mobile, and that is what Freedom to Switch is all about. Next, let's talk about money. Because broadband is not cheap, so we're giving customers massive savings and the ability to lock it in forever. Listen, right now, prices all around us are going up for everything. The average household is paying more for groceries and gas, housing costs, and yes, broadband, too. Internet providers are notorious for exploding prices. The oldest trick in the Big Internet playbook, they lure you in with a short-term deal and then jack up the rates before your contract is even up. On average, Internet providers increase prices more than 30% when the promotion expires. But even worse than all the price hikes are all the bogus fees, fees for everything, fees for activation, installation, equipment. There's even a fee if you want to install it yourself. They actually charge you for your own labor. And get this, there's even a WiFi fee, just in case you want to use your home broadband for WiFi. This stuff is crazy. In 2020, Internet providers made $9 billion just in monthly fees, not even for the service, $9 billion in fees. T-Mobile Home Internet already has no taxes or fees, and it's just $50 a month. And now with Internet Freedom, your price is locked in forever. Starting now, our Internet plans come with Price Lock. So only you can change what you pay for broadband. Your price is locked in. You aren't. This is the only price lock of its kind. You aren't locked in for just 1 or 2 years, you're locked in for as long as you're a customer on this plan, with your gateway device included. So you can keep that price year-after-year without bogus fees, bill shock or any of the old Internet provider BS. We want our customers to know that while prices around them are all going up, their T-Mobile bill won't be one of them. It might even go the other direction. Because the next thing I have to announce can help customers save even more when they have both wireless and Home Internet. It's a way to save $900 every year just on Home Internet and lock in that savings with Price Lock. Here's how. Almost everybody out there already has a family plan. So you know how it works. The cost per line gets better the more lines you have. Now we're bringing that idea to Home Internet, making it just another line you can add to your wireless plan. So now when you add T-Mobile Home Internet to a Magenta MAX family plan, it's treated like another line. So a family pays just $30 per month for home broadband. Let me say that again. You only pay $30 a month for broadband. That's $30 and 0 cents, no taxes or fees, no gotchas. And that's not for 1 year or 2 years, that price is locked in for as long as you stay on your plan with Price Lock. That means you save up to $900 a year on Home Internet, plus you get all of the value in Magenta MAX, which saves a family up to 20% versus Verizon and AT&T's comparable plans and comes packed with over $1,200 in added value every year. With Internet Freedom, you can say goodbye to Big Cable for good and save money. A lot of it. And with Price Lock, you can rest easy that the price won't go up. Helping them save money is one way we thank our customers, but it's not the only way, not even by a long shot. The last part of today's move is all about bringing thankings to broadband, so broadband customers can finally feel appreciated. The old Internet providers never thank you for your business. They treat you like a number, not a person. At T-Mobile, we love our customers. And a big way we appreciate customers is by saying thank you with free stuff and exclusive deals available only to our customers. And now, all of our broadband customers can get T-Mobile Tuesdays, too, even if they don't use T-Mobile for wireless. That means they get free stuff and discounts from brands they love every single week. And here's some big news. We've orchestrated one of our biggest thankings ever, starting next week, just for our Home Internet customers. I wanted to make sure that when we brought Tuesdays to Home Internet, we did something big to welcome them. It's the thanking of all thankings. So here's what we're doing. First, we're giving you a free TV streaming device of your choice, up to $50, for all Home Internet customers with any voice plan. Look, you can pay Comcast $7 a month for a cable box, every month for the rest of your life, or you can get a free Chromecast, Fire Stick, Roku, or $50 off any other streaming device of your choice, like the awesome Apple TV. Next, and this is a big one, we're giving half off YouTube TV for a full year when you have Home Internet and Magenta MAX. That means you'll save nearly $400 on the already awesome YouTube TV price, and you get a great alternative to cable. YouTube TV has live TV, sports, local news, more than 85 channels, plus unlimited DVR space for a fraction of Big Cable's price. Together, that's a free streaming device and the lowest price on YouTube TV anywhere. Plus Netflix, Apple TV Plus, Paramount Plus. It all makes breaking up with Big Cable a no-brainer, so you can cut the cord for good. And it's all available starting next Tuesday and every Tuesday, all summer long. When we say thank you, we don't mess around. And that is how we are Un-carriering broadband. With Internet Freedom, we are giving broadband customers Freedom to Switch so they can test drive T-Mobile Home Internet worry-free. And when they're ready to switch, they can break their old contract and not worry at all about those nasty early termination fees. Second, we're locking in those massive savings with Price Lock. And also, we're making Home Internet work just like another line you add to your Magenta MAX wireless plan. So you get it for just $30 a month locked in. That is unprecedented. And finally, we're showing broadband customers what it's like to finally feel appreciated with exclusive thankings every single week with T-Mobile Tuesdays. And our biggest Tuesdays thanking ever starting next Tuesday, with a free TV streaming device of your choice and half off YouTube TV for a full year, over $400 in customer appreciation, the way only the Un-carrier does it. Listen, we're so focused on this industry because this stuff matters. Broadband is essential. Millions of people, entire towns, now have more choice and competition than before, thanks to T-Mobile Home Internet, like the people of New Castle, Virginia. It's made a huge difference for that small town and many others. Take a look at this video. And then after that, Callie Field will be here to share one final part of today's news. Because believe it or not, we're not quite done. [Presentation]

Hi, everyone. I love seeing the impact that 5G Home Internet is having on towns like New Castle. I'm here to talk about the last part of today's news. I'm here to talk business because the crazy thing is, as bad as Internet providers treat consumers, it's even worse for businesses. Internet providers think they can slap business on something and charge more for it. Get this. Businesses pay $55 more per month for Comcast 100 megabit service than consumers. It's the same service. They just give businesses a static IP address and a giant price hike because they called it Comcast Business Internet. It makes no sense. And if you have multiple locations nationwide, just imagine what it's like navigating this patchwork of providers. They're all regional players. Nobody can help you nationwide. You have to navigate different contracts, different prices, different equipment, different service level agreements, different customer care teams with different practices across all of them. It's a nightmare and it's expensive. There's huge cost to all of that complexity. Well, today, we're making it simple. That's what the Un-carrier does. We simplify what the others complexify. We're launching new Business Internet plans that make our fixed wireless service available anywhere in T-Mobile's wireless footprint so we can cover your locations from coast-to-coast. That makes T-Mobile the first and only nationwide Internet option for businesses with our 5G fixed wireless. The average small and remote office uses an estimated 80 to 140 gigs a month. So in these areas, where we don't yet offer unlimited data for Business Internet, we're launching new plans with 100 and 300 gigs of data, more than enough to serve their needs. So we can connect all of your branches, your small remote offices. Wherever our wireless signal reaches, we've got you covered with one provider, one SLA, one awesome customer support team. And the best part, it's the same price as our home broadband service. And on top of that, I've got an amazing deal to announce for small businesses, too. Now small businesses who sign up for Business Internet can get a free tablet plan with unlimited 5G data. We know tablets have become an essential tool for workers on the go. With 5G, people can use their connected tablet virtually anywhere in the field, on a factory floor or in a boardroom. And now small businesses with Internet can get a free tablet plan on us so they can get work done from anywhere. And that's our news for businesses today. Now let's pass it back to Mike.

Thanks, Callie. This is a big day for all of us. And it's a big day for the millions of people out there who've simply had it with their old Internet providers. It's clear that customers are hungry for an alternative. In our first year in this business, T-Mobile is already the fastest-growing broadband provider in the country. And that's all before today's Un-carrier move. That success is happening for one big reason: this network, America's largest and fastest 5G network. It's 30% larger than AT&T's and nearly 4x larger than Verizon's. This network is why we've been able to grow this service so quickly, connecting more than 1 million homes and covering more than 40 million eligible households all across America, all of them covered by 5G. But we're not just providing a better option, we're creating more competition and making this entire ridiculous industry change. Having the Un-carrier as a competitor is every ISP's worst nightmare because we will force them to do better, to be better for their customers, and everybody wins when that happens. That's how T-Mobile changed wireless for good. We made big bold moves and forced competitors to respond. And wireless customers everywhere are better for it. Satisfaction is up more than 10% across all providers since we launched the Un-carrier movement. And IDC analysts estimated that our Un-carrier moves put $11 billion back in consumers' pockets. $11 billion because we forced the entire industry to change. And that's the kind of transformation we're bringing to broadband with today's news. And as you know, we won't stop. We'll be right back for some live Q&A. So I'll see you in a minute. [Presentation]

Hey, everybody. We're back live. Well, first of all, let me just say, happy Star Wars day. May the fourth be with you all. I changed my shirt just for you, and we're here to celebrate that as well as today's news. Although Callie and I didn't mention it earlier, we're coming to you live from Miami, Florida. We're actually in town with all of our top performers, celebrating their incredible achievements in 2021, the greatest growth year in the history of our company, and their achievements in Q1 '22, the greatest Q1 growth quarter in the history of our company as measured by things like postpaid net adds and net new accounts, et cetera. And it's so much fun to celebrate their incredible work here in Miami. We're in this overly air-conditioned room, and I'm joined -- you already saw Callie and I both earlier, but we're also joined by Jon Freier, President of our Consumer Group; Mike Katz, our Chief Marketing Officer; Ulf Ewaldsson, our Chief Network Officer. By the way, Neville Ray is home sick today and says hello to everybody. And the lawyers want me to say one thing before we open it up. They wanted me to note that we may make forward-looking statements that involve risks and uncertainties. And as always, you can find a comprehensive list of risk factors in our SEC filings and a reconciliation of any non-GAAP financial results discussed compared to our GAAP results, which can be found in the Quarterly Results section of our Investor Relations website. So operator, thanks for joining the call, and let's take the first question.

[Operator Instructions] We'll go to John Hodulik with UBS.

Two quick ones, if I could. First on the availability, I think you guys just went from 30 million to 40 million homes that have -- can get the fixed wireless product. How do you expect that to evolve? And then maybe on the network side, speeds you guys are seeing now and how you expect that to evolve as you get the 2.5 and other bands fully deployed?

Okay. So yes, we announced in a while back that we moved from 30 million to 40 million availability. And what that means is we've taken every address in this country and we've rated them based on the available capacity of our network. And we are now approving 40 million addresses if people apply for Home Internet or Business Internet service with us. And that's fantastic that we're able to do that. And we have a really unique approach on how we think about homes passed. It's very different from how a wireline company does it, which is based on the available capacity of our 5G network, the highest capacity 5G network that's ever been built. And so what we're able to do is look at the normative usage of mobile customers, both with the share taking we expect to happen as well as mobile usage growth that we expect to continue to grow exponentially. And we forecast all that into the future, and we find places where we know we have now and will have ongoing lots of excess capacity from the built network. Now we have 110 megahertz deployed to 5G right now. That's more than AT&T and Verizon combined in the Sub-6 spectrum. And so it obviously allows us to have this massive capacity, and we just manage this really carefully. What happens is that, that results in incredible speeds. Nationwide, to your second question, cable companies right now are seeing average speeds of around 160 megabits per second. Our nationwide average is 140. When you look at our top 75% of our customers, the vast majority of them, it matches cable essentially with about 165. So it's really interesting that this is a competitive service, priced much lower, much easier to use, but a competitive service that is already resulting in Net Promoter Scores 3x higher than cable companies. And maybe, Ulf, since we're in the middle of this massive build-out, the biggest build-out that's ever happened in this country for 5G, you can tell a little bit about what we can all expect going forward.

Yes, as Mike said, just a fantastic frequency asset. And the combination of that asset with our rollout pace, which is we're doing a thousands upgrades on a weekly basis of towers across the nation, we ended up last year with 210 million population covered with Ultra Capacity. We're going to increase that this year to 260 million POPs covered with Ultra Capacity. And a lot of that is also going into rural America, making this a service that is game-changing in many, many parts of the country. And we will just go at it. We're just keep increasing our pace and building out.

So I mean it's amazing, John, if you think about where we sit today as of the last earnings call, 225 million, up from 200 million end of last year, 260 million by the end of this year and then 300 million people covered by Ultra Capacity is our goal by the end of next year. But what's interesting is also the spectrum dedicated to 5G, John, continues to expand. And so right now, we have Sub-6 about 110 megahertz dedicated. Our target is to get that nationwide to around 200 megahertz. So think about 200 megahertz deployed to 300 million people. And so where we sit today, being able to approve 40 million households, you can see that we're just getting started in terms of deploying the massive capacity potential of this American leading 5G network. Okay?

We'll take our next question from Avi Greengart with Techspontinental (sic) [ Techsponential ].

Avi Greengart from Techsponential. In most T-Mobile subscriber homes, when you get home, your phone switches to WiFi, taking the load off the wireless network for data and sometimes voice. In the T-Mobile double play household, it's all going to be cellular all the time. So how are you accounting for that and ensuring that it doesn't overload the cellular network?

Yes. I mean basically, we're looking, when we approve these households, we're looking at total usage on the network during the peak hours, right to the very premise of your question. And of course, we have to look at it that way. And it's fascinating. You're right. I mean right now, a lot of traffic gets offloaded at those hours onto WiFi networks, freeing up capacity for our mobile network to be able to take that up. And so what we do is analyze not just every cell tower, but every sector of every cell tower for the available capacity. And in places where there's not only capacity today at those busy hours in the evening, but where, as I mentioned to John, we forecast capacity to continue indefinitely, that's where we approve an applicant for home broadband service, applicants that right now would be approved if they ask at 40 million U.S. addresses.

We'll take our next one from Maribel Lopez with Lopez Research LLC.

You actually answered the original question, but I do have another one. One is about the business tablet service. If they already have tablet plans with you, can they still -- does that just switch over and you end up getting a free tablet service? And then the other one is about for consumers. Can they actually do the whole process of ordering this online? Or are they going to have to speak to a contact center agent?

Okay. Terrific. Well, first of all, I'll hand it to Callie on the tablet. But I'll point out one thing just as we hand that over because it goes to Avi's points as well. One of the things that's fascinating about business accounts, and the big news that Callie announced a few minutes ago, was that we are taking business nationwide to every single address served by our 5G network. And that's because, Avi, to your point, businesses not only use way less data even if they're WebEx-ing and Zoom-ing all day, because that's not a very consumptive app at the end of the day compared to watching Netflix in 4K, but they also use the network at different times of the day. And so this is a breakthrough that Callie just announced to be able to offer a business Internet service nationwide every single place that's reached by our 5G network. So the tablet promotion that you announced at the end, how does that work?

Yes. So for every Business Internet customer, you can get a free tablet plan on us. So you would need to have a Business Internet line and then we would offer you the tablet plan. So that's a great, incredible deal for our Business Internet customers.

Final question is an easy one. Can you buy it all...

Is there any kind of...

Oh, sorry, go ahead and finish the question, Maribel.

I was just going to ask, is there any kind of quality of service or any other thing you noted that they just charge you more but don't really give you any other quality of service? And I'm just assuming that all the services are the same, whether or not you're consumer or business, or is there any prioritization?

Well, I love that question. One of the biggest things out there that is, I think, a borderline scam is the idea of Internet companies continuing to sell you higher and higher tiers of service, 1 gigabit speeds, 2 gigabit speeds, when, a, they don't deliver that typically; and b, most people don't want it. It's a scheme to try to get you to pay more money. And it's happening all across this country right now. As I said, cable speeds average nationwide like 160 megabits per second. And so a lot of people are very disappointed when they sign up for these tiers. They pay a lot more money. And sometimes, they get it and sometimes they don't. And that's a real disappointment. All of our services work on a consistent level across all of our broadband services. And so what that means is that the traffic is -- we approve it in places where we don't have to worry about prioritization because we know the capacity is there. And all the broadband users across Home Internet are on the same priority level on the network. By the way, you did ask a minute ago about online. The short answer is easy. Right now, you actually do have to talk to one of our experts to get signed up. It's a very quick and easy transaction. But obviously, we're working towards getting it to be completely digital, and that will be coming soon.

We'll go next to Scott Moritz with Bloomberg.

Curious, the Internet product seems to be pretty popular already. I'm curious why you've picked this time to start a kind of heavy promotion to get -- bump up those numbers. And also, are you changing your guidance for 7 million customers -- 7 million to 8 million customers?

No, we're not changing that guidance. What I told you at earnings was we see it very much on track with the success that we've been seeing in this space. And all the expectations that we have for this move were fully embedded in the postpaid numbers that we guided, 5.3 million to 5.8 million for this year at the earnings call. And we're doing this right now because it's time to address these pain points. And as I said at earnings, this is a priority for us. This is a business we're serious about. We're going to do everything in our power to go get those 7 million to 8 million or more users. And we're going to smash pain points in this industry. And Scott, you've been following the story on the wireless side since the beginning. You know what happened when we came into wireless, with the mindset that it's a stupid, broken, arrogant industry that needs to have its pain points smashed as only the Un-carrier can do. That's the tenacity that we're coming into this market. We know we can solve problems for millions of consumers. And look, we're talking today during a time, as I said in my remarks, when Americans are suffering from the highest inflation rates of our adult lifetimes. I mean, that's crazy. And all across this industry, they're hearing about surprise rate plans, exploding bundles, price hikes coming out of nowhere, getting slammed, and it's time for the Un-carrier to step up and do what we do best. And that's what today's announcements are all about.

Second question, if I have a chance.

You bet.

So speaking of inflation, some of your peers are complaining they're being crushed by rising wages and et cetera, raising their, one, AT&T obviously is about to raise prices or has already. Where do you stand on prices coming up for wireless customers?

Well, as I said at the earnings time, our business, compared to a lot of industries, is relatively protected from a lot of the pressures of inflation because a big part of our cost structure is wrapped up in long-term contracts around things like tower leases, equipment contracts with our major vendors like Ericsson and Nokia, backhaul contracts, et cetera. And so we're more insulated than some industries from the pressures that the economy is seeing in inflation. But more importantly, we see this inflationary moment and the economic strain it's putting on Americans as an opportunity for us to stand up and serve more Americans. This company, as the Un-carrier, has always been famous for delivering an incredible value. And we're doing that today in broadband to a greater extent than ever with a set of announcements that we just shared, but we've been doing it for years on the wireless side. And it's very important. It's obviously very differentiated. AT&T came out this week with surprise price hikes for a bunch of their customers, because of course they did. They're AT&T. And what we are is the Un-carrier. And today, we not only didn't do that, but we announced Price Lock, our famous Un-contract move from the wireless era has made its way into broadband, and Price Lock applies to every broadband customer. So that when you sign up with our service, you know that, that price is something you can count on. And today, Americans need that, frankly, more than they ever have before in our adult lifetimes.

We'll take our next question from Sascha Segan with PCMag.

So I've got 2 questions here. The first one is, so if everyone has the same priority on the network, when we were testing the system, of course, we did see speeds and performance really fluctuate throughout the day based on mobile traffic in the area. Are you working on any ways to segregate home traffic such as network slicing to guarantee a certain amount of network to the home customers? And if so, when do you see that coming about?

Well, we're open to that, Sascha. And as you know, with the only provider so far with a stand-alone 5G core, we have options like that to an extent that our competitors don't. But right now, the way we are approving these services, it's not something that we need to do. And again, we're approving services only in places where we know we can support the demands of customers. And they're telling us that we got it right. Our Net Promoter Scores aren't just 3x higher than cable, they're rising. And the satisfaction rates are great. People are trying this service and then keeping it. And so we're -- this is the kind of thing we have to watch very closely. We're committed to this business and we're committed to the mobile business. And we need to make sure that we design our rollouts in such a way that there's a great experience for everybody. And so far, in the early going, a year into it, we think we're getting that just about right. And as I mentioned in response to John's question at the beginning, as you know, and I think you follow this closely enough that you know this very well, we're only at the very beginnings of deploying this capacity. We have massive amounts of spectrum that aren't yet on 5G. We have lots of LTE customers on spectrum that we can eventually farm over to 5G. I mentioned at earnings that 45% of our customers now have a 5G device and more than half our traffic is on 5G. And what that means is we're at the beginnings of our ability to start to farm capacity onto the 5G site -- side of things. And in addition, we have large swaths that are not yet deployed, such as the C-band purchases that we would expect to be able to deploy second half of next year. Ulf, do you want to add anything to that?

No, just that we can see already also on the average usage in terms of capacity that we're getting the formula right, to your point, Mike. We have about 300 to 400 gigabytes of usage per user, which is very comparable to what you would see in cable. So that kind of testifies that we have got the formula right when it comes to qualifying these households that we do on a sector basis out in our network all the time.

Close to 10% of our customers are using 1 terabyte a month. 400 to 500 -- 300 to 400 is the median number, which is basically spot on to cable, which kind of speaks to this question, so.

And then my other question is, we have a lot of readers in exurban and rural areas who are very interested in the service because their Internet options are very bad, but they say that their signal strength kind of needs a boost from just having a small device inside the window. So they're really wondering whether you guys are looking into options for, for instance, exterior panel antennas that would let these people who are in more rural areas capture band 71 signal better.

Yes. I'll say 2 or 3 things about it, and then maybe turn to Jon Freier to give you a little bit of color about what we're hearing from the customers that are signing up in smaller markets and rural areas. But first of all, to the premise of your question, it is one of the reasons why we have dedicated CPEs. So the antenna structures in these CPEs are much more extensive than what you can get in a mobile phone. So people shouldn't judge the signal that they'll get in their house from their mobile phone experience because the antennas are much more extensive. Second, we're at the beginnings of the rollout of our merger-driven network expansion. We've talked for a long time about 10,000 additional sites, macro sites covering vast swaths of this country from low-band right up through our large mid-band holdings. And we're at the very beginnings of that. And so we're reaching now places that -- and we'll continue to expand and reach places with strong signal that used to have little or no signal. And that allows us to compete in rural markets in ways we never could in the first decade of the Un-carrier era. And then finally, to your point, yes, we are open to external antennas and things that can help extend the service for people. And all those things are things that are options for us, and not just theoretical options, but built right into the optionality of the CPEs that we've chosen. So -- but I do want to, since you asked about it, I'll ask Jon to share just a little bit of color of the kind of customer feedback we're getting across the country, but particularly in smaller markets and rural areas.

Yes, you bet. Sascha, yes, the feedback has just been tremendous. I mean when you think about the space and all the pain points in this space, it's incredible. And particularly in rural America, for those of you who spend time in rural America, you know there's really a lack of choice. Your choice is typically, do you want a connection or not. And then when you have a connection, it's inferior. You got a lot of DSL-like speeds, et cetera, out there. And so what people are doing is they're paying more, getting less in rural America in particular. And when you look at how people are living their lives, we can't really live the lives that we live in 2022 without a usable Internet connection in our homes. So when you think about how we work and how we play, how our kids are getting educated now, our customers are loving it. They're loving that, just like this video that you saw in New Castle, Virginia. Those kinds of communities all over the country are just loving what we're doing. And the pain points of this are so intense. When you think about our customers, as we survey them switching from their previous provider to T-Mobile, not only is it 3x cable, but some of our customers are reporting NPS scores of like negative 77, like negative 77 from their previous provider. I mean I've never had a root canal, but if I had a root canal, I don't think I would give that even worse than a negative 50. So that's just the kind of pain that people are having. And we're just so delighted to be able to serve these smaller markets in these rural areas across the country and bring them real choice for their first time in their lives for Internet within their homes.

Okay, operator. And by the way, if you guys want to [indiscernible] screen.

We'll take our next question from Anshel Sag, Moor Insights & Strategy.

So I had a 2-part question. The first question is around Business Internet and kind of how that might look different from the consumer business. I know you guys are pricing it very similarly and you're offering a tablet plan. But is there any plans to kind of offer a slightly more differentiated service for businesses so that they can feel like T-Mobile has comparable business-like services to what others are offering?

Yes. I'll start, and then hand it to Callie. Isn't it a breakthrough though that we aren't gouging businesses with the same service at a higher price like a lot of this industry is doing. And it's just -- to me, it's just remarkable that you look at the pricing schemes of this industry and you see it's like a normal thing to take the exact same service. They throw in something like the ability to do a static IP or something like that, and go, "Well, it's different. And so it's 30% more." And that's just wrong. It's a pain point that we're smashing today with our $50 and zero cents totally unlimited offer exactly like we offer to consumers. But in addition to your premise of your question, you heard Callie announce that we have widely available plans that are on more limited buckets that you can get at any address that our network reaches. Nobody else is able to address that pain point. Maybe you can talk about how that works and what people can expect.

Yes. So thanks, Mike. So let me just reiterate again, we're the first and only nationwide broadband for business. There's no other 5G or wireline providers that can connect businesses all across the country. So if you are a business owner and you have multiple locations across multiple states, we are the only one that's going to be able to give you one contract, one SLA, one piece of equipment and one extraordinary customer care team. That's what we're bringing to life here today. It's solving a major pain point for businesses across the U.S. The other thing, to Mike's point, so many people want to slap business on there and then charge an average of $55 more per month for our business customers. And we just feel like that's absolutely absurd and it doesn't make any sense at all, and we're here to solve it. There's -- I saw a question coming on social as well that was like, "Hey, how many of these Business Internet lines can I have?" And I want to just tell you, "You can have as many as you need. That's what we're here offering for you." And to Mike's point, if your businesses are located, some of them in areas where we don't have truly unlimited -- or I'm sorry, we don't have unlimited, then what we're going to do is offer you a bucketed plan of 100 or 300 gigs. And that way, we can say yes to every single location where you're taking care of your own customers. We're really excited about that. One last thing I'll say, we did release in a press statement today a partnership with Cradlepoint. And so what we're offering is a new 5G router from Cradlepoint, it's going to launch in the coming months, but our businesses will get a cloud-based device management, remote device configuration and monitoring and analytics from T-Mobile. So this is a game changer for businesses that really want to take their Business Internet, get an incredible price, an incredible value and make it simple and have the advantage of our 5G network.

Awesome.

Great. And you kind of answered my second question, which was about CPE specifically. So I know that on the consumer side, you guys have 2 CPEs. And it sounds like you have the Cradlepoint that's coming later on. So is there going to be a mix of different CPEs for business and consumer? And will there be 2 models for consumers? Or are you guys transitioning to a 1 model?

I'll turn to Mike Katz.

Yes. We do have 2 current models. And that roadmap will continue to expand. We expect to have multiple router options that serve both consumers and businesses. And then based on the business's need, the Cradlepoint router might be a better fit if they're looking to do some more advanced things like creating public-private networks or overlaying some management software. But there will be several different options for both customers and businesses.

And Mike, while we got you, you're on a roll, why don't you jump in because this is also a Twitter conference. And I see that there are questions coming in, and I want to make sure we address them since we only have some minutes left.

Yes, I've seen a couple from Facebook. I'm sorry, my eyes are failing me a little bit. But Facebook, Quest One had a couple of questions. One, how do you know if it's available in your area? If you go to the T-Mobile sites, specifically t-mobile.com/WiFi, you can check eligibility for any address in America and it will tell you right on the site whether your home is approved for unlimited broadband. And then there was a question from the same handle about upload and download speeds. And I know Mike talked a little bit about this upfront. But download speeds on average with T-Mobile Home Broadband, 140 megabits per second. And if you look at the, like Mike said, the top 75% users, over 160, which is right on par with where cable is.

What are the streaming device options we get for the $50, from [ Tiffany Johnson ].

Yes. Really, it's your choice. It's your choice. And if you pick a device like a Roku or a Fire Stick or a Google Chromecast, the rebate covers the entire cost of the device up to $50.

Apple TV, gaming consoles...

Apple TV, gaming consoles. If you've got -- if you stream off of a PlayStation or off of an Xbox, you can redeem those for $50 off those devices as well.

Terrific, Operator, let's go back to the phone.

Yes. We'll take our next phone question from Mike Dano with Light Reading.

I was just wondering about millimeter wave spectrum and whether that is currently supported in the CPE devices, whether it will be supported in the future and whether you guys plan to add millimeter wave to the fixed wireless service. And then also whether -- do you have any plans for using this service to subsidize with government funding? U.S. Cellular has some plans around that. And I'm wondering if T-Mobile has any plans to apply for government subsidies in the future when those become available.

Great. Well, getting to your second question first. Yes, of course. And if there's ways that we can reach neighborhoods that wouldn't be otherwise reached and take advantage of those programs as they eventually come, we will do that. The one that's here now, as you know, is the Affordable Connectivity Program. That's something that we're widely supporting across our business, including here in broadband. But I know you're asking about programs that would help us further deploy and reach neighborhoods that wouldn't otherwise be reached. And look, this is a great way to reach underconnected Americans because the last mile is coming in wirelessly. And that means we can reach people more cost effectively for the taxpayer's dollar or our own capital dollars than an awful lot of ditchdigging can do. So we're very excited about that potential down the road. Your question on millimeter wave. Yes, I mean we have a large holding of millimeter wave, and we're open to using it for home broadband. Everything we talked about today is predicated on our mid-band-centric strategy. So I want to make that clear that everything we've talked about, our 7 million to 8 million, our aspirations, our speeds, all of our work is based on the mid-band, Sub-6 and below centric strategy for 5G. But yes, we're open to it. And we may use our millimeter wave for dedicated deployments, campuses, business usage or, yes, maybe reaching certain neighborhoods, but we haven't taken those decisions yet. Okay. Thanks, Mike. And we got time for 1 or 2 more. So we'll wrap up. We'll go back to the phone.

We'll take our next phone question from [ David Lum ] with CNET.

Just wanted to talk about the Home Internet. What are your current subscribers of people who have added Home Internet to their mobile plans? And how do you expect that to expand with this new Magenta MAX bundle?

Yes, thanks. It's been a mix. I don't know if you want to jump in and talk about what we're seeing, Mike or Jon. But so far, it's been a mix. We've had -- the majority of people are T-Mobile customers. But this has been a great way for us to introduce our T-Mobile franchise to people as well. And we've been disclosing those numbers as we've been going. So to me, this idea of being able to add T-Mobile home broadband to your Magenta MAX plan is an absolute breakthrough. As you know, Magenta MAX is the centerpiece of our strategy because it is the best expression of the best 5G network there's ever been. And our customers love it. They expect great value. They want us to prioritize them and we are giving $30 home broadband, $30 and zero cents to those Magenta MAX customers who are now subscribing at a rate -- I think last quarter, our new customers was over 50% of them came in on Magenta MAX. So this is a really popular plan that as of today is only across about 15%, 1-5 percent of our base. So there's a huge opportunity for us to continue to grow that base. They're some of our happiest customers. And today's news is just one more way of appreciating them and giving them great value.

Yes. I'll just say a couple more things.

It feels like...

I'm sorry, Mike and David, just a couple of more things to add on to that. We are seeing a double-digit percentage of customers who are experiencing T-Mobile for the first time on Home Internet. And Home Internet gives them the opportunity to test the network in one of their most important places for them, at their house. And we're seeing that already translate into people that are expanding their relationships and adding wireless. But one of the things that we're also really excited about with this offer with Magenta MAX is the millions of already T-Mobile wireless customers being able to experience broadband in their home and slamming these pain points that they have with their current broadband provider by bringing them another solution provided by T-Mobile that solves all the issues that we're talking about today. So we think there's a real opportunity with that.

Yes. Real quick follow-up. You guys have an ultra capacity goal of 260 million by the end of 2022. Do you have a similar goal for Home Internet by the end of the year?

Not that we've disclosed. But all of the numbers that we do expect are fully embedded in the guidance we gave for postpaid net additions of 5.3 million to 5.8 million this year. And we're on our way. We've talked about 7 million to 8 million households, which, by the way, it's fascinating when you stop to think about that. That could sound like a lot of numbers. But on the other hand, that's after 5 years a single-digit penetration of this country's opportunity. And so this is a popular service that people are finding their way to and subscribing. We don't need to win everybody in the neighborhood. All we need to do is serve a single-digit percentage of the population by year 5, and we've nailed this aspiration. And we are on our way. So we're going to go one last question. Operator, give us the last caller, please.

Yes. Our final question is from Mark Lowenstein with Mobile Ecosystem.

Congratulations on the announcements today, and I get to have the last question here. So one question is the 40 million households that you're currently addressing, what percentage of those would be in areas that one would term well served by another broadband provider like cable versus underserved or unserved? And how do you see that sort of evolving over time?

Well, I can give you some -- Mark, I can give you a couple of facts from the last disclosure we made and then see if there's anything that Ulf wants to add. But what we said was, of the people signing up, which I know is a little different than your question, we've seen about 40% of them coming from cable. And so that shows you that this is a product that competes both where there's opportunity already and some choice, as well as in greenfield areas. And look, people are finding their way to this product for 1 or 2 reasons, either there's finally a viable broadband service in their area and T-Mobile has showed up with speeds that are way faster than DSL, and we're busting into greenfield markets, and they're signing up for us because there's an awesome new competitive option. Or there are already competitive options and they're signing up because we compete vigorously and at a much lower price. So they're either getting a comparable service for way lower price or they're getting something many times faster than what was available before. And either way, they're finding their way to T-Mobile. But maybe you can give any color on the 40 million homes addressed.

Yes, Mike. Thanks a lot for that. And I will tie back to what Jon Freier said earlier about this great opportunity that we have in small town rural America. Out of the 40 million eligible households that has gone through our careful, sector-by-sector, household-by-household evaluation, about 1/3, 13 million, actually comes from what is defined as rural America. On the plan that we have for the 260 million POP build-out this year, the part of that, that is tied to rural America is about 36 million. So just showing how much focus and how we are spending and rolling out this network to really cover areas where we are getting a lot stronger than we have been in the past.

Terrific. Well, listen, I want to thank the tens of thousands of people who have tuned in to watch this, and I'm sorry we didn't get to all of your questions. I want to make sure that when we do these things, we keep it inside an hour and keep it efficient for you. But I'll just leave you with one final thought, which is I hope we made the point that this Un-carrier move comes at an absolutely essential and critical time for American consumers. If there's anything we've seen over the last couple of years, it's that we provide in our industry the vital connections of people's lives. We've seen how vitally important what we do is, and home broadband and business broadband is a huge part of that, an essential service. And it needs vibrant competition. It needs a champion like the Un-carrier. And right now, with the economic circumstances out there, with inflation at an all-time high in our adult livelihoods, with stress and anxiety on consumers' minds, now is the time for the Un-carrier to stand up. We are so excited to present this Un-carrier move. Thanks for your attention and your interest in us, and happy Un-carrier day, everybody. Cheers.

Ladies and gentlemen, this concludes the call for today's Un-carrier announcement. If you have any further questions, you can contact the media relations team. Thank you for your participation. You may now disconnect, and have a great day.