T-Mobile US, Inc. (TMUS) 2023 UBS Global Media & Communications Conference (Transcript)

Financial Data and Key Metrics Changes - T-Mobile's service revenues increased nearly 4% year-over-year, with postpaid service revenues up 6%, indicating strong value creation [10] - EBITDA rose 12% year-over-year for T-Mobile in Q3, and cash flow is on track for a 75% year-over-year performance, nearly doubling [10][72] - The company is experiencing its greatest growth quarters in history, with a focus on translating market share into cash flow production for shareholders [4][10] Business Line Data and Key Metrics Changes - T-Mobile has taken roughly 40% share of overall postpaid net additions over the last two quarters, including competition from cable providers [16] - The company reports that over 60% of new customers are choosing higher-value plans, indicating a successful shift towards premium offerings [18] - The churn rate has decreased significantly, with T-Mobile achieving the lowest churn in the industry during Q2 and the lowest churn ever for a Q3 in its history [28][33] Market Data and Key Metrics Changes - The competitive landscape remains healthy and vibrant, with customers benefiting from faster service and increased data usage at stable monthly revenue per customer [7][8] - T-Mobile has become the share-taking leader in smaller markets and rural areas, achieving a 16.5% share and aiming for 20% by 2025 [68][69] Company Strategy and Development Direction - The company's strategy for 2024 focuses on continuing to take market share, translating that into cash flow, and making smart investments for future growth [4][10] - T-Mobile is committed to leveraging its 5G network to enhance customer experience and drive higher data usage, which is seen as a competitive advantage [21][38] - The company is exploring opportunities in fixed wireless and fiber, with a focus on capital-efficient growth strategies [56][62] Management's Comments on Operating Environment and Future Outlook - Management views the current competitive environment as beneficial for both the industry and consumers, with no early signs of stress in growth [8] - The company is optimistic about its ability to maintain low churn rates while managing upgrade costs effectively [26][33] - T-Mobile's leadership believes there is significant room for further growth in customer value and market penetration, particularly in rural areas [32][68] Other Important Information - T-Mobile has authorized a $19 billion tranche of shareholder returns, including its first-ever dividend, reflecting strong cash production [72] - The company has successfully deployed mid-band 5G, covering 300 million people ahead of schedule, which is expected to provide a long-term competitive advantage [42][44] Q&A Session Summary Question: What are the company's priorities for 2024? - The company aims to take market share, convert that into cash flow, and make smart investments for future growth [4] Question: How is T-Mobile positioned for holiday promotions? - T-Mobile's performance aligns with expectations, and the company anticipates 3 million postpaid phone net additions this year [10] Question: How does competition from cable affect T-Mobile's model? - Management views cable competition as part of the normal run rate and does not see it affecting T-Mobile's pricing or subscriber growth [16] Question: What is the outlook for ARPU and pricing power? - T-Mobile sees potential for further growth in ARPU as more customers choose higher-value plans [18][22] Question: How is the company managing upgrade costs and churn? - T-Mobile has achieved low churn rates while managing higher costs per upgrade, indicating a strategic focus on customer retention [26][28] Question: What is the status of T-Mobile's fixed wireless and fiber initiatives? - The company is on track with its fixed wireless strategy and is exploring opportunities in fiber, with a focus on capital-efficient growth [56][62]