T-Mobile US Inc at UBS Global Media and Communications Conference Transcript

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

Question: John Hodulik - UBS - Analyst : Got it. Makes sense. All right. That was a great overview. Maybe we'll eventually get to a lot of those topics. Maybe let's start with the sub growth. You sort of increased expectations for sub growth through '25, you've actually done better than -- certainly than we expected to date. What drove that initial outlook? And what's the sustained performance that you've seen thus far?

Question: John Hodulik - UBS - Analyst : Got it. I don't want to jump the gun here, but as you look out to '26, how are the jump balls? How do you have them shaping up? I agree with you, the way we look at the industry, you had a big cohort coming off these 36-month payment plans last year, how does the cohort in '26 look versus '25? And also, how have you seen CLVs evolve through the year?

Question: John Hodulik - UBS - Analyst : Okay. That's right --

Question: John Hodulik - UBS - Analyst : Got it. I think one of the main concerns among wireless investors is the competitive environment, right? You have a new leadership at Verizon that seems to be more focused on subscriber and I would say, branded market share gains. What do you think the ramifications are for wireless and for T-Mobile as we look out to 2016?

Question: John Hodulik - UBS - Analyst : Including the wholesale you're seeing.

Question: John Hodulik - UBS - Analyst : Got it. Yeah. And we'll come back to the digitalization in the 15 Minutes to Better. You said, Black Friday was pretty much in line with what you've seen in the past. I mean, can you just talk a little bit or put some more color around that? What you saw from competitors, what T-Mobile had in the market, and how that positions you for the holiday selling season?

Question: John Hodulik - UBS - Analyst : Got it. Makes sense. Maybe a couple of more micro questions. If you look back to the third quarter, churn only grew by 3 basis points and upgrades were effectively flat for T-Mobile. And those are very different trends than what we're seeing from your competitors. So how are you achieving this and how is T-Mobile positioned, I guess, across these metrics as we look out to next year?

Question: John Hodulik - UBS - Analyst : Got it. One of the hallmarks that we've seen for T-Mobile over the last several years is just faster service revenue growth than your competitors, but a pretty good gap. Can you unpack some of the drivers of that faster service revenue growth and the sustainability of that premium that you get versus the industry?

Question: John Hodulik - UBS - Analyst : So given that, I guess, the cable style, as you referred to it, which I'll be using in the future, price increases are such a small percentage of the ARPU benefit you've seen or the ARPU trends you're seeing. It sort of suggests to me that those ARPU trends are more sustainable than people might think.

Question: John Hodulik - UBS - Analyst : Right. Another sort of hallmark of the third quarter was despite the strong revenue growth in the subscribers, you had some pressure on margins due to some new spending. Can you just talk about those new spending initiatives? And are they expected to continue into '26?

Question: John Hodulik - UBS - Analyst : That's great. So in terms of the spending, the spending is on the systems and just promoting the app, getting people to understand the power and to create that usage and --

Question: John Hodulik - UBS - Analyst : Right.

Question: John Hodulik - UBS - Analyst : So looking out over the next two years, you said the '26, '27 guidance, we'll get to the point where not only do we see that some of the spending come down, but we'll also start to see the payoff of these digitalization --

Question: John Hodulik - UBS - Analyst : Got it. Great. Maybe let's turn to broadband and first, starting with fixed wireless. Very strong -- frankly, surprisingly strong third quarter numbers in terms of fixed wireless. What drove the acceleration and I know you have a 12 million guide out there, but talk about how much runway you have maybe heading into that and maybe beyond the 12 million guide.

Question: John Hodulik - UBS - Analyst : Great. You mentioned 6G, and I want to sort of move from fixed wireless. But T-Mobile is featured prominently in the NVIDIA and Nokia announcement not too long ago about AI-RAN. Can you talk about the benefits to incorporating AI into your network in the RAN. What does it do for the fixed wireless business? And what could it do for the overall network? And maybe the timing of when we should see that?

Question: John Hodulik - UBS - Analyst : Got it. Just before we move on, I mean, when you talk about improvement in spectral efficiency from 6G/AI-RAN, can you size that as 2 to 3x what you're seeing? Or are we talking dramatic change in the sort of --

Question: John Hodulik - UBS - Analyst : Got it. Okay. All right. Maybe moving on to fiber. Clearly, you have a lot of experience in fiber with your experience in Europe. What are the main learnings from your fiber experience in Europe that can be applied to the US?

Question: John Hodulik - UBS - Analyst : Right. So you have targets out there for 12 million to 15 million homes passed by 2030. Can you give us a sense of where you are now? How that builds over time? And what kind of penetration rates do you expect to see as the strategy matures?

Question: John Hodulik - UBS - Analyst : You have the highest NPS there is --

Question: John Hodulik - UBS - Analyst : So you would imagine great distribution --

Question: John Hodulik - UBS - Analyst : Right. Got it. What are the prospects of doing more fiber-to-the-home JVs? And could you just talk about the the economics you're seeing both in terms of those JVs and just in the broadband -- the fiber business in general?

Question: John Hodulik - UBS - Analyst : Got it. Those comments lead to the question we've been getting a lot. A lot of change happening in the broadband world. We're also seeing a sort of increase in sort of overall deal activity. What's your view and T-Mobile's view on cable? Obviously, the valuations have never been cheaper. Their fundamentals are obviously under some pressure. Are cable assets attractive to T-Mobile as a way to sort of -- I mean, I think you might have already answered it, but gain scale and sort of drive a converged product?

Question: John Hodulik - UBS - Analyst : Okay. That was very clear. We have a little bit of time. Maybe give us an update on the UScellular acquisition. How is the integration going? And anything you can talk about synergy realization?

Question: John Hodulik - UBS - Analyst : Great. All right. And just quickly to wrap up, you've been spending about $10 billion in annual CapEx. Is that a sustainable level? And how should we think of free cash flow over the next several years given all the inputs on the broadband side with the momentum you're seeing in subscriber growth? And just the overall outlook in terms of growth of the metric?

Question: John Hodulik - UBS - Analyst : Great. It's a great way to leave it. Srini, thanks for being here.