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

All right. For important disclosures, please see the Morgan Stanley research disclosure website at morganstanley.com/researchdisclosures. If you have any questions, please reach out to your Morgan Stanley sales representative. And we are really excited to welcome back to the conference, T-Mobile, EVP and CFO, Peter Osvaldik.

Thank you so much. Great to be here. Let me do my obligatory statements too. There you go. The text will be later. So I guess it's up there, so we're good to go.

All right. Good. We're covered. Okay. Great. Great. Well, thanks for coming, Peter. Great to see you.

Thank you for having us.

So actually, we're in San Francisco back in September, right? I think it was the last time I saw you. You laid out sort of a long-term growth plan for the company. Why don't we start off with that outlook, whether anything has changed since September that you want to highlight? But really, what gives you guys the confidence that you can kind of grow at those levels in an industry that's competitive and maturing?

Yes, that was a very exciting time for us to lay out that new multiyear plan with Capital Markets Day. And honestly, what happened is we closed the year even stronger than we anticipated. The momentum continues with T-Mobile. I think you saw the Q4 results by many, many measures, 2024 was the greatest growth year in T-Mobile's history and that long and storied history 2024 was it. In fact, we had the most customers join T-Mobile in 2024. And of course, a lot of financial metrics. We hit a lot of new record highs. And so what really happens in September in the strength of Q4 and how we delivered 2024, really gave us the confidence to actually increase some of the expectations for 2025. And one of those being service revenue, where at the time of Capital Markets Day we anticipated, another year of strong 4% service revenue growth and we increased that to 5% service revenue growth. And commensurate with that, with the momentum we saw, we also issued our highest ever beginning of the year total postpaid net additions guidance. So that's really been the beginning of it. The reason why to believe and what's really driving that is the same things that have been underpinning the growth story for multiple years now. It starts with, I know we say this rather simply, but the best value or the best network and the best experiences create a structural advantage for T-Mobile that we've been taking advantage of. And you couple those things with uniquely underpenetrated market segments, whether that's in smaller markets, rural areas, T-Mobile for business, now Top 100, which is a new growth driver that we didn't anticipate 4 years ago when we started this merger, but have seen great momentum there on the back of network strength. And of course, what we've done with new businesses like fixed broadband, that's a business that went from nothing to 6.4 million subscribers at the end of 2024, and it's a fabulous contributor. So those same underpinnings are the tailwinds that will drive this business growth for many years to come and why we're comfortable in this environment. And by the way, maybe I'll take a pause because I don't believe it's a maturing industry. There really is on a lot of fronts, the industry as a whole is growing TAM. With the advent of -- certainly our leadership from a technology and network perspective, you're seeing replacement products for WiFi. You're seeing whole new categories come to fruition. So beyond that all important -- very important postpaid phone metric we all look at, there's a lot of other growth potential in the industry as well that gets us very excited. And so that's why I kind of take exception for the maturing industry. We've increased service revenue guidance. So probably not.

Fair enough. Let's talk about 2025. So you've got guidance for 5% service revenue growth. $5.5 million to $6 million postpaid net adds. Anything you'd like to update us on today about the year ahead? Or any comment about how Q1 is sort of shaping up particularly competitively?

Yes. Again, we issued this guide at the end of January. We're very confident in the guidance, both from the highest ever beginning of the year, postpaid net additions guidance and a subset of that being postpaid phone but also that all important increase in service revenue. And so a lot of times I get questions around what can you break down that 5% for me? And maybe I can do that in how I think about Q1 and the individual metrics of it. Prepaid service revenue, I'd anticipate very similar patterns to what we've seen the last couple of years in terms of Q4 to Q1. So it continues to be a very strong contributor to our business. But similar patterns in terms of sequential change Q4 to Q1, I would expect. Wholesale and service revenue is one we've talked about for a while, and we've talked about 2025 really being the trough and the long anticipated trough, both with ACP going away, but also with the DISH, MVNO revenue and TracFone as Verizon integrates TracFone. Underpinning those things, there is a great growth story with things like Google and other smaller providers. So we see 2025 kind of being the trough, as we explained at Capital Markets Day and growth thereafter. So Q1 there is probably $650 million-ish for that kind of line item of wholesale and other service revenue, which encompasses a few things. And so that means in the guide of a 5% service revenue, it's that all important postpaid service revenue metric that continues to be a really strong growth driver for us, and that's both volume as well as rate related. Outside of that, probably the only Q1 shaping thing, I always like to do is income taxes, we're very comfortable from a 24% to 26% range for the year. It looks like 26% for Q1 and typically you see some variability there. But everything else is intact. So we couldn't be more excited, honestly, around the guide, again, issuing this -- at the end of January, issuing the highest ever beginning of the year, postpaid net addition guide, all buoyed to buy those structural advantages in underpenetrated markets.

That's very helpful. It's interesting that we've had all of your competitors essentially present already, and we're kind of wrapping up our -- at least the telecom side of the conference with T-Mobile. We talked a lot about conversions, which I know you guys get asked about all the time. It's been talked about by AT&T and Verizon and Comcast and Charter as sort of a key growth driver for them. What's your perspective on how much convergence matters in the marketplace and whether it does or does not impact T-Mobile's ability to kind of continue to lead the industry in growth?

Yes. Our view is rooted in the reality of the U.S. market. And the first reality for everyone to know is for over the last 5 years 85% of people have had the ability to bundle if they wanted to. They could select wireless service from their wireline provider, and that hasn't played out. If we look at some of the subsets you've seen, obviously, our results in those 5-year periods as well. But if you double-click down in there and look at, for example, competitors' fiber markets, our share of households and our penetration in competitors' fiber markets is actually higher than in nonfiber markets. And similarly, if you look at the multiyear growth for us, we've grown our penetration at a very similar rate in those fiber markets as well as nonfiber markets. So it hasn't impacted the growth because, frankly, the convergence story and thesis has been here for 5 years. In the U.S. in particular, it is really the wireless sale that we found to be the most considered purchase. And of course, you hear competitors talking about, well, the bundle lowers churn, every bundled product lowers churn. I mean we see that whether you're talking about, for example, a family plan. That's really been the convergence that's happened in the U.S. as you've gotten families together with the leader in that, whether it's other products, could be fixed wireless, could be tablets, frankly, the more you bundle, the better you see from a churn perspective. But given what we've experienced for the last 5 years, the growth we've delivered and what we're seeing in those underlying markets, it's been here. There's no issue with that. That said, in and of itself, fiber can be a great business from a convergence perspective, but just a great business, which is why you've seen us dive into some of the JV arrangements are still pending, but we're very excited about it.

Yes. I definitely want to talk about the fiber stuff and the JVs in a minute. But let's talk about the big business, the wireless business and your growth opportunities there. So starting with top 100, as you mentioned earlier, if we were to look at the markets where T-Mobile is #1 today, are there similar characteristics across those markets that might inform sort of the degree of difficulty or opportunity to take the markets that you're #2 or #3 up to #1?

Yes, there really isn't something distinct that would mean, well, we have to approach that differently than we have. And in fact, if you disaggregate the top 100, and we've kind of talk about them in 3 separate cohorts, right, where we're #1, where we're #2 and #3. In a lot of cases, actually the #3 is bear remarkable resemblance to smaller markets in rural areas. So the way we've gotten to be #1 in that cohort of #1 is first, network. I mean, we were historically much more network-centric in dense urban environments. That was how you grew and value leadership. What we've seen and why we see top 100 as a growth driver now is as we continue to have this leadership perspective from a network point of view. And as consumer equities catch up with the reality of what the network actually is in our 2-year leadership and we continue to build in a very strategic way using our consumer or customer-driven coverage model, which we can talk about as well, making sure that every dollar of investment in the network goes in the places where it benefits customers the most, creates the most value for them. So it's all about just applying the same formula that made us #1 -- in the #1 market to #2 and the #3 and in fact, the same way we do in smaller markets and rural areas. And in Q4, we grew our share of households in all 3 of those categories of top 100. So it's absolutely working. It's going to continue to be a tailwind for us and not just the way we've approached top 100 before, but because you have people, who we call network seekers. They are the cohort of customers who value network quality above all else are willing to pay a premium. And those are ones we're seeing come to T-Mobile as the reality of the network leadership starts and continues to grow in consumers' minds. Our network equities continue to grow. Our competitors continue to decline, and that's something, once again, that will continue to be a tailwind and growth for us in the future.

A similar playbook, it sounds like?

Yes, very similar playbook, absolutely.

How about in the small and medium rural areas? I think that's -- those are places you're newer and you're still growing. I think some markets, you're sub-20% share. Can you talk about the characteristics of those markets that allow you to grow over time? And does the fact that they're just less dense maybe it takes longer, it's a less efficient project from a capital point of view, how would you talk about that?

Definitely not less efficient. It's the same story of let's bring the network to a place. We chose the way we categorize this. So that smaller markets and rural areas is actually everything outside of the top 100 for us, 40% of the U.S. population. So it's a large cohort of customers, including quite large cities from [ 100 and first on down ]. And so we approach it similarly. You build the network to get it to. In the past, we've talked about how do you get the parity and then how do you grow a network to a leadership position in each one of these marketplaces. And then you bring the distribution. And that's what's really continued the growth. And again, if I look at Q4 there, we continue to be the industry switcher leader in smaller markets and rural areas and a lot of runway, to your point about, where we were coming from and the growth that we see. Certainly, in the future, as you see more of our digital aspirations come to life that we've laid out at Capital Markets Day, smaller markets and rural areas is certainly a place where it can create efficiencies, but just as much in top 100 markets.

You guys added over 1 million postpaid accounts last year across consumer and business. When we came out bullish on your stock late last year, you probably get the most pushback on our T-Mobile recommendation. And a lot of it was because of concerns over the industry, which we -- I know you already expressed your view on -- describing it as maturing. But what's your answer to sort of the concern out there that well over 100% penetration with AT&T and Verizon getting better, cable, obviously trying to fight back, other concerns like immigration. What do you tell people about your ability to keep growing, but also, is there an industry assumption underneath that 3-year plan that you laid out last September?

Yes. Of course, we look at scenarios around the industry, but I try not to predict the actual pinpoint industry-level postpaid phone net additions guide. And for a number of reasons, there's a lot of apples to oranges. You have to think about some of those categories, like cable, you called out actually don't disclose the postpaid phone number. It's one number lumped in together with other connected devices in the postpaid space. You've got other competitors maybe including other things in postpaid phones. So it's not apples-to-apples. What I really think about is how do we continue to take these advantages that we have of the best value, the best network, the best experiences with these underpenetrated market segments we just talked about and continue to drive growth. And the most important element in what we look at is what's happening with switchers. That can take away some of the noise of, well, what's in a postpaid phone number or not. What's happening with accounts. And that's a place where, as you mentioned, we just delivered 1.1 million postpaid net account additions for 2024, a tremendously strong indicator. And while postpaid phone nets at an industry level have kind of gone down since 2021, they're still very healthy and growing. Generally, switchers, the number of switchers has gone up. They're kind of, again, take away the noise of what you're looking at there, focusing on what is happening with accounts switchers and then what we're doing there from an ARPA perspective. And we continue to be very confident in the numbers we put out and the guidance we put out and our ability to predict our own company switching and nets, that's what we're hyper-focused on. And again, we have unique advantages that continue to have tailwinds for many years to come.

Yes. You also have a track record of delivering...

Well, it's tremendously important for us as a management team to do what we say. We believe, and particularly a lot of the long investors and new investors, management trust has to be earned. And so yes, our track record is very strong there. Our philosophy hasn't changed in how we approach guidance, which maybe gives you a little bit of confidence around what we just said with the highest ever beginning of the year, postpaid phone net additions, but it's tremendously important for us.

Got it. Maybe 1 more, just and then we'll shift to fixed wireless. So back to the 3-year plan and the service revenue growth outlook. Can you talk a little bit about how you think about account growth, ARPA growth, the drivers of the multiyear service revenue growth guidance?

Yes, it's -- I mean there's a lot of elements to the service revenue growth. But when you're thinking about postpaid, that all important high-value postpaid category, it's a function of both. That's why we continue to aspire to be the switcher leader and the net account and the net postpaid phone leader in this industry from a volume perspective, while simultaneously growing ARPA. And we've done that very successfully. You saw 2024 and Q4 results we issued, which was also an increase to Capital Markets Day we said for 2025, we anticipate ARPA growth to now be 3%. And so to us, it's that equation. And really, when you look at what we've delivered, we think this is exactly the right way to approach it because when you look at the P and you look at the Q and how it comes together for us, whether you look at total service revenue at the company level, whether you look at postpaid service revenue, we're delivering on both of those metrics at a rate that's over 2x our nearest competitor and much more than 2x the next one down out of the 3 of us. So it's the formula that works. All fueled again by what I said around this best value, best network, best experience and the underpenetrated market segment. So that's exactly how we're going to focus on it going forward and that's what yields the outsized results.

Great. Let's shift gears to fixed wireless. Not only a success story for T-Mobile, at least by our math, it was nearly 40% of your wireless service revenue growth last year. This is a big business, an important part of the growth story. How do you seize the opportunity in terms of longer-term subscriber market share, monetization, et cetera?

Well, yes, it's been a great contributor. And what a great way to smartly utilize fallow capacity and monetize it with the network that we're building. We've delivered now, as of the end of 2024, a little over 6 million subscribers. I think what we laid out at our Capital Markets Day is that we have a path to 12 million subscribers by the end of 2028, well on track there. We're very confident in that figure. And of course, that is a great contributor as well to ARPA, the relationship stickiness as well as overall postpaid service revenue growth. So yes, we're very bullish on the business. And you need to step back and look at what's really developed there. Sometimes the question is, well, is that a durable product? Well, look at, one, the growth that the product has enjoyed. Two, if you just look since the beginning, which we didn't launch this too long ago to the end of the year, the average speeds for fixed wireless in our customer base have increased threefold. Customer satisfaction is very high with this product. And it's simple. It comes with the T-Mobile experience, which is why customers love it and why it's a durable product.

You mentioned the fallow spectrum strategy, which you guys have been consistent on describing it that way. How do you think about growth in bandwidth consumption in this cohort? It's a growing group of customers and then consumption per customer is growing. Is there any risk that you end up sort of running out of the "fallow spectrum?" And if some app -- application comes out, we've talked a lot about AI at this conference, really were to inflect consumption up, does that put any of your guidance at risk? Do you think about that at all?

Yes. No, it's probably important just to do a quick primer on what the fallow capacity model for us is, which is we take the entire country and we divide it into hexbins because hexbins sound cool. And they are generally 165 meters. They're smaller in dense urban environments, and we look at for each of those hexbins based on the capacity that we've created and based on our anticipation of continued share taking in the mobile space and based on how we anticipate continued data consumption increases in that mobile space. So it's mobile first, that's the highest value customer. And by the way, we've been remarkably accurate in those predictions around data and data growth. You put all of that projected forward and say, based on all of those criteria, which of these hexbins will you not fill the available capacity in based on mobile phone use, mobile phone growth. And that's where we qualify and sell fixed wireless. And that's why it's -- we are protecting the mobile phone base and the mobile connectivity base at all cost. That gives us enough capacity. Obviously, that capacity is more than 12 million subscribers because you have to -- you're only going to penetrate at a certain level. That's how we get comfortable with this and that's why it's so important to do it with a fallow capacity model because you're protecting against exactly that.

Of course, yes. I think you guys market to about 70 million to 80 million households or have available from a fixed wireless point of view. Can you talk a little bit about how you manage your spectrum and the network to sort of provision to that level? And whether over the long term you think you can expand or want to expand that further?

Yes. Again, the way we do it is exactly this fallow capacity model I just described. And yes, while you can look at the households that we've laid out there, our supportable household is a subset of that number and then, of course, subscribers is a subset of supportable households. So it's continuing to be very precise from a marketing perspective, even more precise over the coming years as we have better data, better digital marketing capabilities, and we should talk about our announcements this morning of Blis and Vistar because that's an exciting space for us as well. But that's how we manage it. And when you look at the customer base, you asked about usage from that perspective. Look, this continues to be -- it's about 2/3 from the top 100 markets. The majority of them come from cable. The majority of these customers are prime. They're looking for a great product at a great value. The majority of these are our own customers, but it's also been a great way to introduce T-Mobile to new customers and then cross-sell them into the mobile later. So yes, it's a fabulous product and very bullish.

Let's talk about fiber, right? So T-Fiber, we're waiting for these JVs to close, hopefully, sooner rather than later. Can you just talk about the opportunity with T-Fiber? And I don't know if you're willing to talk about it, but how the go-to-market may contrast or compare to what we've been seeing from you in fixed wireless?

Well, I think it will be, one, obviously, there's some aspects of go-to-market with fiber that are perhaps is slightly different. You canvas the neighborhood as you're going to be able to do all the smart things to generate excitement before your actually digging the ditch and tearing up people's yards make them excited about it. But it's also all of the factors that not only did we learn from the fixed broadband product but also from the mobility side of the house. We're very convinced with the broad customer relationships that we have, frankly, the demand we've seen for fixed broadband and because we do it in this fallow capacity model, we have a waitlist of over 1 million customers that aren't in the hexbins or we've already fulfilled that. And so there's a lot of belief in why the thesis is -- we're going to be able to generate stronger returns than a pure financial investor because we have the mechanisms to acquire customers at a lower cost, service customers in the way that we do through wait list, through the brand, through our existing relationships, and that's what makes it so powerful for us.

Why the JV structure? Why is that the right way to approach this from your perspective? And I think there are some provisions long term that maybe you can start consolidating them? How do you think about those options longer term?

Yes. A couple of reasons. One, we wanted to maintain partnerships with the individuals that are great at this. And that's both the management teams at Metronet and Lumos, but also EQT and KKR, who are fabulously experienced in the fiber space. So keep that team that is delivering on tremendous build intact. Secondly, make sure -- and by the way, they wanted to stay in. So that's part of it. They're equally excited about what that company could be. The other is you can lever it at an appropriate level and continue to fund the bill at the paces that they're going at while we take care of the consumer retail side of it. So that's -- yes, there's provisions longer term that would allow us at our option if we choose to, to consolidate them. But this is to us, absolutely the right structure at this point.

I believe that you guys are the exclusive retail partner for these JVs. As you -- once you go to market with T-Fiber, I think there's other versions of these JVs without exclusivity for the retailer. Why does that make sense? Are there economics either you're giving up by being the exclusive distributor? Just talk about that thought process?

Yes. I mean we have wholesale partners that are not JVs where we might not be exclusive some we are. In this case, we are exclusive for the consumer FTTH side of it because we're not giving up economics. Remember, we're 50% owners in the [ InfraCo ] itself. So we share in those economics. But it made a lot of sense so that we can bear the fruit in an exclusive way, all of these brand assets, customer relationships, et cetera, to drive better penetration, faster penetration and lower acquisition and servicing cost.

Is there a scenario where you look to go meaningfully beyond the 12 million to 15 million homes that you guys have sketched out for us through these partners?

Well, I think what we said and we hold true to what we said at year-end is we're very happy with the hand that we have, again, from the position that we have in wireless and our belief based on the actual fact pattern around convergence and that thesis in the U.S. So it's a high bar. Of course, we'll look at other opportunities, but it would probably have to be very similar to what these companies have bought. We've been very diligent before we announce these. It has to be a mechanism for us to generate very attractive IRRs like we have been able to do with these 2 JVs. So we'll continue to look, but I don't see a need from a convergence perspective to go much bigger because, again, of how that played out.

All right. Let's talk about the business market and opportunity for you guys, a big focus area, particularly since the merger. Can you talk a little bit about the size of that business today and sort of the growth opportunity that you guys see?

Yes. Well, we don't separately report it, but it is -- has been and continues to be on a fabulous growth trajectory. 2024 was not only the highest revenue year for B2B, but also the highest growth year from outperforming everybody else from a business phone nets perspective. And it's not just one category. If you look at enterprise 2024 was their highest growth year. SMB, their year was the highest growth year. Advanced network services under which we encompass, all of the cool new technology-leading features such as slicing, et cetera, they're seeing a lot of momentum. And the latest one, of course, being what happened with T-Priority in the city of New York and how our unique capabilities and our couple of year head start on this just took the preeminent first responder agency for whom FirstNet was built back in the day and they looked at the capabilities of what today's technology at T-Mobile can deliver and selected us. So that's another exciting avenue and growth. And they're on their way as we committed to at Capital Markets Day, to double-digit service revenue CAGR in the business space. So fabulous. They're doing great work. It's great momentum. Very happy.

In the enterprise space, specifically, are there any kind of holes in the product or service portfolio that if you were to fill those really unlock and accelerate that particular segment?

Well, similarly to just this FirstNet example, it is continued leadership in terms of capabilities because years ago, T-Mobile was the procurement stocking horse. That's what we were for businesses. But with capabilities, you can go in and solve CIO's challenges. That's when they'll bring along the postpaid phone business. And of course, for example, in 2025, we'll continue to deliver better self-service capabilities to be enterprise grade and more and more so and deliver what they expect, which continues to unlock new things. But fundamentally, it is we are solving CIO problems in business. That's why we're earning the corner office discussions, and that's why we're earning the business. And that's driven by the capability set that we have that others cannot bring to bear.

Got it. Okay. Let's talk direct to device. You had the Super Bowl ad that at least from this audience was probably the most interesting. And we've got a lot of calls asking about your relationship with Starlink and how this partnership work. Can you talk a little bit about how you 2 are working together to bring direct-to-device to consumers this year?

Yes. Well, first off, it's a long-term exclusive relationship. And at this point in time, we're now over 500 satellites in the air. And we partnered with SpaceX because obviously, they have a unique differentiated capability to not only develop satellites, but also deliver payload into space. I mean, they've delivered more last year than everybody else combined. And when I think about the next B2C satellite co, I believe they have around 5 satellites, and we have now 100x the satellite. So it's a very exciting moment because the proposition, especially in the U.S., is those 500,000 square miles, where there is no terrestrial coverage and the economics don't make sense to bring terrestrial coverage. Can you supplement that with D2C. And for us, the product begins with texting and then later, we'll bring more voice than data. And it's just such an exciting thing, whether it's peace of mind, whether it's true life saving, which we saw both the hurricanes, the L.A. wildfires as we'd open this up and even within the beta itself now, we've seen it. So peace of mind or whether it's for those people that just they go into those 500,000 square miles. My brother and his family are avid kind of mountain climbers and they pay lots of money to have a GPS text thing. And he's like, when can I get this, right? So to me, it's just another way for T-Mobile to demonstrate to customers that we have the best value we connect you everywhere and stimulate not only switching but an ability to continue to self-select up the rate plans, very fabulously excited about this.

I'll take the shot. Any chance you'd share with us sort of the unit economics for this relationship or how the cost work? Is it a wholesale fee or...

Yes. Well, it's definitely -- the arrangement is confidential on both sides of it. But again, obviously, value accretive. And like I said, it's just another differentiator for us. So very excited. Stay tuned. We're in beta broad-based beta, obviously, and then the product commercially launches on July 1.

Yes, yes. Okay. I thought I'd take a shot. All right. Let's talk about advertising, made some -- I guess, some news this morning with a small acquisition Blis. Talk about T-Ads, which is not a small business for you guys, I'm guessing pretty high margin. What is the ad inventory that T-Mobile brings to the market? And what are your long-term ambitions in this business?

Well, first, yes, thank you. We made an announcement around the closing of both Blis and Vistar and issued by the way, some guidance increases there. So in addition to what we did at year-end, we're adding $250 million of service revenue, $75 million of EBITDA and $50 million of free cash flow for 2025. Now because of the timing of that, obviously, that's mainly beyond Q1. So it's not a Q1 event, just a little bit in there. But the ambition is to grow it much more significantly. And the reality of why we're in the advertising space and why we believe in this is because, one, we're 1 of the largest advertisers in the country. We acutely understand the pain point that advertisers feel. And there's a few categories I would put it into. One, especially with mobile ad IDs and cookies going away, it becomes more and more difficult outside of the walled gardens definitely to target appropriately. So addressability, targetability. Second is there's a lot of ecosystem that takes a lot of money out of the advertising. We all know this, right? You put you as T-Mobile or other big advertisers or small advertisers put $1 in here the actual working media spend is quite a bit lower. So that creates an opportunity for us. We have, in a very customer-centric privacy-compliant way data that help address this both from as mobile ad IDs and cookies go away, how do we serve to consumers. In the benefit of consumers, your consumers right now, and I bet you, you go into digital and you get ads and you say, well, that's not me, why in the world am I getting targeted with these ads? So consumers are frustrated with the ads, we can benefit consumers with better addressability that helps advertisers and Vistar as another element of this, when you think about out-of-home, out-of-home is growing and Vistar, which is digital out-of-home is a growing subset within there. One of the challenges with digital out of home or out of home, in particular, is, again, addressability and measurement and hence why the CPMs are low. So not only with the deal like Vistar, which is a great business running on its own, can we generate with Blis and Vistar synergies for our own internal advertising being 1 of the largest advertisers, again, we see the acute pain but also establish a business with that data with our acute knowledge to make addressability better to make consumers' lives better in terms of this and also to make money.

So if we were to look at your advertising revenues, is it both selling T-Mobile's own inventory, whether it's in-store or digital and also third parties as you guys are going to get into the service...

It's going to be both. I mean, yes, we have a lot of inventory, whether it's our own retail media network in our stores, whether it's -- we have over 70,000 screens and rideshare devices that we own. There's, of course, T-Ads. And just the amount of consumer interaction we have T Life, sorry, not T-Ads. T Life, everything is T. Even my socks [indiscernible]. But as year-end, as we said, we had over 50 million downloads on the T Life app, which is not only the central vehicle to our digitalization goals, but enables better consumer experiences, personalized experiences, including in the advertising space. So yes, there's a lot of our owned media that we can monetize, and we've been doing this for a while and have seen the benefit. There's third-party inventory that we can help with, and it's all predicated on addressability. So I'm very excited about the business. .

That's great, Peter. Maybe just to wrap up, we'll talk about free cash flow and capital allocation. You guys have laid out a pretty clear framework last September. But talk about how you think about allocating that marginal dollar between the menu that you've laid out, buybacks, acquisitions, deleveraging, other investments? Or how do you guys prioritize and make those decisions on a real-time basis?

Yes. It always starts to us with the umbrella of dynamically where do we want leverage to be. And we laid out 2.5. We're still confident in 2.5. So it starts with what do you want to do from a leverage perspective? And then it goes into what's the highest value creation in terms of investing further into the core business? Are there opportunities there to address it, whether it's smart M&A like you've seen us play and we have a lot of great, highly value-accretive M&A in 2025 that we anticipate closing U.S. Cellular, the JVs, we just saw Vistar and Blis closed today. So that's another mechanism. And then, of course, there's -- if you have no capability there, and you feel confident from a leverage and you feel confident from a growth perspective as we laid out, then there's return to shareholders. And there's a lot of factors that go into that in terms of what's the dividend to share buyback mix, where is the share price sitting but we're very confident in what we laid out there.

Great. Well, Peter, anything you'd like to wrap up with as we hit the 0 on the clock?

No. I mean, thank you for the time. It continues to be, for us, a very exciting time here. Some of you have seen Srini here is joining us as COO to help us bring that tremendous expertise around digitalization during this transformative time with a customer-centric lens. And we're going to continue to take these structural advantages we have, best value, best network, best experience, take the underpenetrated market segments and continue to deliver what we said and have a great growth runway. So very excited.

Great. Well, thank you for coming. Thanks, everybody.

Thank you so much for having us.