T-Mobile(TMUS)2023-07-28 00:27Financial Data and Key Metrics Changes - T-Mobile reported a year-over-year increase of over 5% in postpaid service revenue, driven by growth in postpaid accounts and average revenue per account (ARPA) [14] - Core adjusted EBITDA grew by 11% year-over-year, with a margin increase of over 300 basis points [14] - Free cash flow increased by 64% year-over-year, with the highest free cash flow to service revenue margin relative to peers [15] Business Line Data and Key Metrics Changes - T-Mobile achieved 1.6 million postpaid net additions, including 760,000 postpaid phone net adds, the highest in eight years [10] - The company reported record performance in T-Mobile for Business, with the best-ever phone net adds and lowest phone churn [10] - High-speed Internet customers increased by 509,000, with continued growth in gross adds since the product launch [12] Market Data and Key Metrics Changes - T-Mobile's share of switchers in the top 100 markets increased both sequentially and year-over-year, indicating strong competitive positioning [11] - The company captured a win share of switchers in smaller markets and rural areas, achieving upper 30s percentages [11] - T-Mobile's network performance led to median download speeds more than double that of the closest competitor, reinforcing its market leadership [7] Company Strategy and Development Direction - T-Mobile's strategy focuses on building the best network and enhancing customer experience, which has resulted in industry-leading growth and customer retention [4][5] - The company aims to expand its market share in underpenetrated areas, with a goal of achieving 20% share by 2025 [11] - T-Mobile continues to innovate with offerings like Phone Freedom and Go5G Plus, which have resonated well with customers [8][9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to maintain momentum, citing strong customer growth and financial performance [13] - The competitive landscape remains vibrant, with healthy competition driving better value and network improvements for customers [7] - Management raised guidance for total postpaid net customer additions to between 5.6 million and 5.9 million for the year [16] Other Important Information - T-Mobile completed the sale of its wireline assets to Cogent, which impacted Q2 results and is expected to have a full run rate impact starting in Q3 [19] - The company is on track to achieve approximately $7.5 billion in merger synergies for 2023, ahead of schedule [17] Q&A Session All Questions and Answers Question: Why did T-Mobile decide to reduce the buyback slightly? - Management clarified that the reduction is not a downtick but a programmatic view based on the remaining funds and time for the buyback program [23] Question: Any update on the spectrum option that DISH holds? - Management indicated that DISH has requested additional time to decide on exercising their option, and discussions are ongoing [28] Question: Would T-Mobile have an appetite for more mid-band spectrum? - Management confirmed that they are always on the lookout for opportunities to add capacity to their network, including mid-band spectrum [30] Question: How is T-Mobile thinking about the evolution of upgrades in the second half of the year? - Management noted that historically, the second half tends to have higher upgrade rates, especially with new product introductions [40] Question: What is the current status of fixed wireless broadband churn? - Management stated that churn has decreased for customers who have been with T-Mobile for a longer tenure, aligning with expectations [42] Question: How does T-Mobile view competition from cable providers? - Management highlighted improvements in porting ratios against cable and noted that T-Mobile continues to perform well despite increased competition [46]