T-Mobile US Inc Q3 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Simon Flannery - Morgan Stanley - Analyst : Great, thank you very much. Good evening. I wonder, Mike, if you could just talk to the buyback or Peter, the pacing of that. It sounds like you were very active in the last few weeks but less so in Q3. I remember last quarter, you've been active in June. Was that the grid was that Capital Markets Day? What's the thought about this and your -- how you think about the rest of this because obviously, it's been sort of stop/start for a little while here. And then, Peter, maybe just help us on wholesale. You've messaged that there would be impacts there from ongoing secular factors from ACP, from Mint Mobile, just help us level set as we see this down to the sort of $700 million a quarter level. Is there still some more to go there? How should we think about that going forward? Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.

Question: Simon Flannery - Morgan Stanley - Analyst : Great, thanks a lot.

Question: John Hodulik - UBS Equities - Analyst : Hey, thank you. Maybe two, if I could, guys. First on spectrum, there's been some -- you guys have made some moves in the market. It looks like you're trading some of your 3.45 for -- some 2.5. Just so any thoughts on the strategy there? Obviously, Verizon buying some spectrum from USM, are you guys also in the market for additional spectrum at the right price? And maybe an update on the 800 megahertz spectrum that's one topic that didn't come up at your Capital Markets Day. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.

Question: John Hodulik - UBS Equities - Analyst : Yes.

Question: David Barden - BofA Global Research - Analyst : Hey, guys. Thank so much. So I guess to start, I guess, would be for Mike. You were in Germany at the DT CMD, where they kind of elaborated on the hope that they would see that their interest -- ownership interest in T-Mobile would rise. I think they said to the high 50% range from the current levels. Can you elaborate a little bit on your understanding of how that timing might work because that will impact how the mechanics of the buyback on the float work, and it could magnify that effect and make it much more beneficial for the US investors? And then the second question, if I could. Maybe, Peter, your 3 million postpaid phone net kind of target for the year implies about 100,000 reduction in year-over-year nets in fourth quarter versus flat year over year in the third quarter. Is that just being conservative or is there something else to watch out for? Thank you.

Question: David Barden - BofA Global Research - Analyst : Perfect, thank you guys.

Question: Michael Rollins - CITI - Analyst : Thanks, and good afternoon. Two questions, if I could. First, curious if you could give us an update on the journey for deepening penetration in the SMRA markets as well as within the business vertical? And then secondly, with respect to postpaid phone ARPU, it looks like it was up, I think, 1.8% year over year. And if I remember correctly, just from some of the discussions in the past, the base case expectation for the back half of the year may have been up 1%. I'm just curious if you could unpack the strength in ARPU? And is there something to take from this strength as we look at future quarters? Thanks.

Question: Jonathan Chaplin - New Street Research LLP - Analyst : Thanks. Two; one for Ulf on the 800 megahertz again. We've seen some challenges to your request to use PCS spectrum for the direct-to-device service with Starlink. Wondering if you think those challenges posed a real sort of headwind you're being able to use that spectrum and whether 800 megahertz might be an alternative? And then, Mike, a question for you. AT&T said something that totally shocked us today that at some point, they think they could open their network, their fiber network to wholesale. I'd love to get perspectives on that. Would it make sense for you guys if they did that to leverage their wholesale network to self-bundled products? Thanks.

Question: Craig Moffett - MoffettNathanson - Analyst : Sure, thank you. First, let me embarrass Cathy by wishing her a happy birthday today.

Question: Craig Moffett - MoffettNathanson - Analyst : I know you're not going to forgive me for that, Cathy. Let me ask the obligatory question about upgrade rates because you, like your peers, continue to see very, very low upgrade rates on handsets. My guess is the kind of the debate about whether we're going to see a big handset upgrade rate this year is largely already settled. But as you look out to next year and what at least the handset makers have said is expected to be a more robust AI-driven upgrade cycle, how do you think about that? How do you prepare for it? And how do you -- as a share gain or how do you potentially benefit from it?

Question: Craig Moffett - MoffettNathanson - Analyst : Thank you.

Question: James Schneider - Goldman Sachs & Company, Inc. - Analyst : Good afternoon. Thank you for taking my question. I was wondering if you could maybe comment on your plans for network upgrades on the wireless side for next year. Maybe talk about the relative prioritization of your 3 gigahertz-plus 5G upgrades as well as how much you plan on doing in terms of rural and markets outside of the Tier 1 against any other priorities you may have? Thank you.

Question: James Schneider - Goldman Sachs & Company, Inc. - Analyst : That's very helpful color. Thank you. And then just as a quick follow-up. Can you maybe comment on whether you see anything in either your macro indicators or your underlying consumer data that have you at all concerned that we are about to see a significant deceleration in the overall kind of gross add environment in the consumer wireless space? Thank you.

Question: James Schneider - Goldman Sachs & Company, Inc. - Analyst : Thanks. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.

Question: Peter Supino - Wolfe Research - Analyst : Hi, and thank you. A question that's a bit longer term in nature on spectrum costs. Your stock valuation multiple expansion shows a lot of market confidence in your growth outlook. And if you put your investor hat on, may you'd agree that the other key value driver is the cost of that growth. And so, I want to ask you about a distant but potentially expensive issue, the 6G cycle. 4G and 5G costs, each of the major MNOs, tens of billions of dollars, your 5G solution with Sprint was quite elegant. I'm wondering if you'd share your view on that and whether anything about your business today sets up the long run for a different level of spectrum and RAN costs than we saw for the 4G and 5G cycles? Thanks.

Question: Sam McHugh - BNP Paribas Securities Corp. North America - Analyst : Yeah. Maybe just a follow-up on that in some ways. It's good to hear about like the consumer benefits that your scale through the Sprint deal brought. How is engagement going with different parties on the UScellular deal ever as much you could add on that? And then a second, just quick follow-up on the ARPU growth. I know ARPU, not ARPA. But in terms of the upside surprise, is that more of a mix effect of the gross adds or is it the price rise that's landed better than maybe you anticipated? Thanks very much.

Question: Sam McHugh - BNP Paribas Securities Corp. North America - Analyst : Great, thank you.

Question: Kannan Venkateshwar - Barclays Capital Inc. - Analyst : Thank you. Maybe one on pricing. Mike, when you look at pricing across the industry right now, it just seems like it's taking much better than expected. I mean, churn is not as high when these price increases are taken and we've seen multiple price increases, of course, from your peers. Does that make you think that the value gap is maybe bigger in wireless and maybe this becomes a recurring opportunity? And related to that, when you think about your volume growth, you're over-indexing versus the rest of the industry by a significant amount. And that's obviously great from a share perspective, but it does come with its own cost in the form of working capital and equipment margin rise and so on. So is it a thought that if prices are getting better, then maybe the balance can shift a little bit more towards price and drive the rest of the P&L and cash flow in a slightly different direction? Thanks. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.

Question: Eric Luebchow - Wells Fargo Securities, LLC - Analyst : Great. Appreciate you squeezing me in. So I just wanted to maybe touch on the high HSI or fixed wireless business. Obviously, you updated your guide at Capital Markets Day [$12 million] aspiration. And I know we talked about it implies a modest decel in net adds if we straight line it, but you've been pretty consistent at this [$400,000] quarterly run rate. So does that still feel like an achievable number near term? And maybe, any other color you could provide on kind of how gross adds versus churn have trended? And then any geographical splits kind of between urban versus suburban versus rural areas where you rolled it out? Thank you.