T-Mobile US Inc at Wells Fargo TMT Summit Summary

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

Question: Eric Luebchow - Wells Fargo Securities, LLC - Analyst : <_ALACRA_META_ABSTRACT>So Jon, maybe to kick it off, we're right in the heart of a very competitive holiday season. We just had Black Friday, we've had new phone launches with a new iPhone a couple of months ago and some holiday promotions. So maybe you could just update us on the state of the competitive market in Q4, how things are tracking, it looked to us like a lot of the carriers had pretty similar promotional offers in the market in early Q4 from previous years, but maybe you could update us on that. Jonathan Freier - T-Mobile US Inc - President - Consumer Group Yeah. It's great to be here with you, too, Eric, and thanks for having us. This business is such a great business. When you think about how the industry is growing its overall service revenues, how it's growing its EBITDAs and how that's converting into free cash, and customers are winning more than ever. When you look at the value that customers are getting now on better networks than ever. And this Black Friday weekend was my 31st Black Friday weekend in this business. And what's consistent about the Black Friday weekend is, it's always intense promotionally, and that's generally the season where you see the most intense promotions that are happening in the marketplace. And this was no different. 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 : Okay. Great. And kind of coupling that with another topic that we've seen more recently is just a historically low upgrade rate environment. throughout the course of the year, we've seen upgrade rates down across the industry, obviously, helping retention efforts at a lot of the carriers. But with the new iPhone release, some of the new AI functionality that we're seeing introduced, do you think we're set for a bigger year of upgrades or more switching activity as you look into 2025? Jonathan Freier - T-Mobile US Inc - President - Consumer Group It's hard to know. It's hard to know where upgrades are going. And to your point, that we've seen these kind of record low upgrade rates across the entire industry. That's not a phenomenon that's exclusive to us. You're seeing that across the entire industry. And that's a testament, in my view, to Apple and Samsung and Google making such great devices that are lasting longer and customers are keeping them longer. And then what's specific to us is that 80% of our postpaid customers have a 5G device. So when you're looking at the experience difference from one model to the next model, there might not be as much of a difference, given that the base already has 80% to 5G devices. So we're seeing that upgrade growth being lower. It's hard to know. Now what we saw during the early days of the iPhone 16 launch is we saw our sales up on a year-over-year basis. But for us, switching was up, gross adds were up, overall demand was up, during that period of time. And so when you look at the overall upgrade rates, yes, lower, but overall sales were up given the demand and the switching that's coming into our business versus others.

Question: Eric Luebchow - Wells Fargo Securities, LLC - Analyst : And just to follow up on that, Cathy, I know at your Capital Markets Day, you did give some guidance measures for 2025, service revenue, ARPA, EBITDA, CapEx, you didn't talk about free cash flow. So maybe you could provide any color on how we should think about free cash flow trajectory into 2025?

Question: Eric Luebchow - Wells Fargo Securities, LLC - Analyst : Okay. I appreciate that, Cathy. So I wanted to switch to, obviously, one of the big topics over the last few months, and that's been convergence between wireless and wireline. AT&T this morning had an announcement to reach 50 million homes, Verizon and Frontier, have some announcements on their future fiber footprint. So clearly, your two largest peers are moving in the direction of more fiber Internet bundled with mobile. You guys obviously have some JVs in the market. But does that -- do these announcements at all change your strategic thoughts about the importance of having a broader fiber footprint versus what you've already announced? Jonathan Freier - T-Mobile US Inc - President - Consumer Group They don't. And the reason why is that when you look at convergence, we believe that convergence is here. It's not coming. It's here. And when you think about customers, and more than 80% of customers for the last five years have been able to purchase a mobile product and a broadband product from the same provider. 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 : And some of your peers have talked about how bundling fiber Internet with mobile can lead to better retention, reduce churn. They put some stats out there on that. I mean -- do you see any sign of that whatsoever when you're going up against fiber in terms of switching activity from your peers? And also, you have a very large fixed wireless footprint as well. Are there any retention benefits to bundling a fixed wireless product with a mobile product? Jonathan Freier - T-Mobile US Inc - President - Consumer Group There are. And you've heard us talk a lot about over the years about deepening customer relationships, which is really kind of going beyond the smartphone relationship. So it's not something that is exclusive to a fixed wireless product or a fiber product in our experience, but having multiple connections across the entire account, a smartphone, a tablet, a watch. And again, a fixed wireless product those multiple connections does create stickiness, and that's what we're seeing as well. When we see customers that have a deeper relationship with more products, including fixed wireless access, yes, the churn is lower. But the churn is also lower when they have a tablet or a watch without fixed wireless access. So having a multiple product approach across a customer's account and deepening that relationship absolutely does create retention and stickiness and lowers overall churn. 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 : I wanted to touch on the SMRA markets or the small and rural area markets that you've talked about quite a bit over the last few years. So maybe you could talk about where you stand today on penetration of those markets where you could go in the future? And do you have the network, the distribution in places today where you feel like you can continue to further accelerate share gains in those markets? An update there would be great. Jonathan Freier - T-Mobile US Inc - President - Consumer Group Yeah. When I talk about rural, I feel like I'm about to wind myself up and let a rip here. This is just a growth segment that I've been so excited about and have been championing for a number of years within our company. And back in 2021, we were nowhere in smaller markets and rural areas. We basically had a share position of 13%, and we were nowhere. So that's why we declared at our Capital Markets Day back in March of 2021 of getting to 20% share of household by the end of 2025. We're well on our way to that. And what we recently announced at our Capital Markets Day this year, is that we've proven this overall market, which is 40% of the United States, 140 million people, 50 million households, 40% of the United States. This overall market is now an established, proven growth driver for our company. And so what we're focused on is we're focused on winning switching decisions, unlocking switching decisions and winning the switching decisions. In Q2, April, May and June of this year, that was our highest share of switching, and we were number one in the marketplace across smaller markets, rural areas. It's a record for us. That record quickly fell because in Q3, we beat that, and we had a higher switching in terms of win share of the switchers in the market, and it was our best performance that we've had to date. So that's great news. And that's what we want to continue to be focused on is which -- winning those switching decisions and continuing to drive this overall business. The other thing that I highlighted at the Capital Markets Day is our net promoter scores. We're now 20% higher than the next highest competitor. And we've almost doubled our net promoter scores from when we started this overall effort back in 2021. Why is that important? It's important because net promoter scores is the biggest indicator for ongoing advocacy and loyalty. So what we have to drive is, of course, from our share position, great loyalty, good churn, the whole thing. But much more opportunity and advocacy to get that word of mouth going, particularly in these communities where word of mouth is so important where you use the power of your trusted circle and friends and family and really driving that. This morning, we also announced kind of the conclusion of our Friday Night 5G Lights program that we've been running in rural America over the last several months with a big prize for one of the schools in Oklahoma. And driving those kinds of programs in addition to that and hometown grants is allowing us to speak to the community differently than we would normally do. All that's paying off. And as you can see in our overall results in terms of the actual switching and the results coming from switching and then building that net promoter score that I was talking about just a few moments ago, is what we've got to do to continue to drive years and years of growth. The distribution that we put into place. These are our stores. So we didn't go out and have fly-by-night stores. We went and put our stores, so there are employees in these communities. And then, of course, within rural America for most of rural America, we brought the first 5G network and certainly the first 5G ultra capacity network to rural America. So we're really building some good momentum here, and I think we have years and years of runway ahead of us. 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 : And I think one other thing that we often hear is that kind of perception sometimes lags reality in terms of network performance. And I know for many years, T-Mobile was viewed as a network that worked great in dense urban areas, but was a little bit spottier when you move into these smaller markets. So maybe you could talk about where you're at in terms of network performance in the rural areas, but also improving perception so that people realize, like actually, this is a premium network now sometimes that takes a little longer, right? Jonathan Freier - T-Mobile US Inc - President - Consumer Group Exactly. So -- and we talked about this too at our Capital Markets Day, and I can provide a little bit more color here is that when you look back in 10 to 15 years ago in terms of perception, we were way off. And the reason we are way off on perception is the reality is we were way off. We were a laggard in the 4G LTE era, way behind in terms of the network and the capability. And to your point, we had a good competitive network in the most, the largest markets in the country, but certainly when you got into the suburbs and the ex-urban areas and the rural areas, it fell off dramatically. And so we have a well-earned, reputation. We had a well-earned reputation way back then as -- more value but questionable on the network. And then what we've done the last five years since we closed the acquisition of with Sprint was to be able to build this incredibly powerful network, and we brought 500,000 square miles of coverage in rural America. And what you're seeing from some of the statistics that we have is that when you look at network satisfaction, within our customer base versus AT&T's within their customer base and versus Verizon within their customer base, we were number three back in 2020 and now we're nipping at the heels of being number one in terms of network satisfaction with our own customers versus our competitors'. It's great news, because that's the reality. That's not perception. That's the reality. Then the flip side of that is the perception, okay, across switchers, how are switchers viewing network quality of T-Mobile versus others. We're up nearly 50%, 44% to be exact, up nearly 50% in network satisfaction improvement versus 2020. Our two principal competitors are down over that period of time. So that bodes well for us. And what we can do to continue to drive that. You're seeing messaging around the network. You're seeing utility continuing to improve around the network. But the more that we can do to center our messaging and overall customer outreach and convincing customers that you no longer have to trade off the network experience to get a great value. And by the way, that's the biggest Un-carrier move of all. No longer -- and this is the first time in the history of my time in this business, which is now 30 years, that you don't have to trade off value to get the best network at T-Mobile, you get the best premium 5G network and the best value in this industry. That's the biggest Un-carrier move of all. And I think that's what's really the thesis for driving our results and what you've seen.

Question: Eric Luebchow - Wells Fargo Securities, LLC - Analyst : One other thing we've seen this past year is that all the carriers have made some pricing adjustments or pricing optimization moves, whatever you want to call them. One of your largest peers has been definitely by far the most aggressive, but it's interesting that we haven't seen a really big uptick in churn from these pricing adjustments that have been made over the last year, and that may be due to some structural factors that we talked about earlier. But maybe you could talk about whether that those moves by your peers give you more of a pricing umbrella to consider future pricing actions? Or do you feel pretty comfortable kind of being the value leader? You can drive better share gains in the market. How do you think about that dynamic? Jonathan Freier - T-Mobile US Inc - President - Consumer Group Yeah. Our strategy is to be the value leader. And that's our covenant as a brand with our customers and that's what we're famous for, and we're going to continue to be the value leader in the marketplace. We're going to defend that position and be the value leader. We haven't taken any decisions in terms of any other pricing actions, but we remain flexible. But there's opportunities that we see, great, we'll explore that. But only if our brand covenant of being the value leader remains intact. That's the most important thing for us because the path to value creation for our company is not necessarily on pricing action, it's on account growth. That's where our service revenue differentiation, the growth that we have in service revenue will come from, not just by jacking and people's prices up but providing great value, being famous for the value leader, and drive an overall switching and account growth in our business. 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 : And I think you've also said that 65% of your new accounts are taking the Go5G plans, if I have that correct? And you have about 30% of your base now on these premium plans. Maybe you could talk about what you attribute that success to? Is it partially that you give the best device promotions for people who take these higher end plans? Or do you sense that customers are finding a lot of value in some of the perks that are embedded in those plans, whether they be Netflix or Apple TV or some of the other add-ons that you have? Jonathan Freier - T-Mobile US Inc - President - Consumer Group Yeah. Go5G Plus and Go5G Next, these premium kind of value-packed plans are our most popular plans in terms of when new accounts are switching to T-Mobile to your point, from an account perspective, 60 -- north of 60%. And it's really because of that. It's because of the incredible value that you get with the streaming services with a differentiated upgrade opportunity over two years versus what our competitors are generally doing at three years. Go5G Next, it's actually one year, so customers who want that flexibility to upgrade every single year, have that option on Go5G Next. But the value that we pack into these devices -- to these plans is really the driver for it. Now also, to your point, we do structure our device promotions across the rate card accordingly. The very best device deals that we give are on Go5G Next to Go5G Plus. And then we still give great deals, but they're just not as discounted of deals on our essentials plans and some of the lower-end starter plans. So that's definitely part of it. But what we see customers really interested in is what we are able to provide with Netflix. What we're able to provide with the Apple TV+. All those kinds of things that we can do, particularly for people. If you guys -- I'm sure everybody has been traveling, airports are packed, what customers want within flight Wi-Fi, everybody staring at their screen on the planes these days. That's making a difference really does make a difference. I'm in the airport a lot and I have my T-Mobile -- T-Mobile people are. We just have our stuff all over the place. We wear our coats for nice investor conferences, but we're just kind of loud and proud. I dressed like from head to toe in Magenta. And people are stopping me all the time to talk to me about T-Mobile and the reason why they love us, one, are great people and our great experience; two, the value; but three, the perks. The perks that they get, particularly when I'm in airports, what they're getting with in-flight WiFi services. They just love it and being a part of it. So we're -- that's our story, and that's kind of how we've driven that success. And like Cathy said just a few moments ago, it's really customers self-selecting into it and craving it and one in the very best expression of 5G with the very best plan in the industry.

Question: Eric Luebchow - Wells Fargo Securities, LLC - Analyst : And I think one of the concerns when you launched fixed wireless was that it would have an impact on the mobile network experience. But I think you've talked about at your Capital Markets Day, how not only have your fixed wireless speeds improve, your mobile speeds have improved as well. So maybe you could kind of talk about take that misperception in the market about how it's chewing up excess capacity, how you really are building plenty into the future that you can satisfy both? Jonathan Freier - T-Mobile US Inc - President - Consumer Group Absolutely. You just said it in terms of like what our network team that's led by Ulf, what they've been able to do to create capacity, increase supply for not only the mobile business but also the fixed wireless business and you saw the overall number of customers that we planned. We took that up at the last Capital Markets Day. It's just been incredible. And the technologies these guys are using driving, customer-driven coverage and getting much more surgical and targeted in terms of coverage improvements is unlocking capacity improvements for us to continue to drive this business. So it's been something that has been very, very great for our business today, but also something that we see as an opportunity to continue to create capacity tomorrow.

Question: Eric Luebchow - Wells Fargo Securities, LLC - Analyst : That's great. And one other factor in the customer experience equation is your T-Life app. So maybe you could talk about how that kind of plays into customer engagement, how that helps kind of reduce customer inbound call volumes and improved customer experience. Jonathan Freier - T-Mobile US Inc - President - Consumer Group Yeah. We're basically -- we're taking a large group of applications and consolidating them into the T-Life app, kind of a super app, if you will, to bring all the capability in the T-Life. You probably have already seen -- we've already sunsetted the legacy T-Mobile app from the Apple App Store, the Google Play store. We've already sunsetted that. And now you can only download T-Life. But we've had the T-Life app, we've had a T-Mobile Tuesdays app. We've had a T-Mobile account management app. We've had sync-up product apps, and we're trying to bring all of that into one app. That is going to increasingly be the epicenter of how we do business at T-Mobile, where it's really kind of promoting, empowerment for customers to be able to take care of things when they want to versus when they must in terms of when a store is open or when a call center is available, belonging in terms of really helping them understand all the benefits that they have and then being able to manage their full suite of connections to the network, whether that be their smartphone connection tablet watches high-speed Internet from their home, being able to do all of that within T-Life is our dream. 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 : I think we're running low on time here, but one of the other acquisitions that doesn't get talked about as much is you have a pending acquisition of UScellular, their mobile business, you also acquired some of their spectrum assets. So maybe, first of all, you could maybe talk a little bit about the regulatory process there and how that's looking into next year. We obviously have a change in administration, which might somewhat influence that. But also how it helps you in terms of reach into secondary, tertiary markets, given that's where they typically operate. Jonathan Freier - T-Mobile US Inc - President - Consumer Group Yeah. We're excited about this UScellular transaction. It's still in regulatory review, and we're going to continue to work with UScellular through the regulatory review process. I don't have a specific update on that. But what I'm excited about is that this is one of those rare transactions that's so great for customers. What I mean by that is that UScellular customers will have access to lower prices and more value as a result of this transaction. And then UScellular customers will get an access to a better network as well as the entire customer base of T-Mobile getting access to a better network. And while we've done all kinds of great things in rural America, we have so much more that we can go do. When you think about 40% to 50% of UScellular's assets are in rural America. And there's so much more we can go do when you combine these two networks together. And one of these transactions that's going to bring more competition, more choice, lower prices, more value, and better networks. I'd tell you when I think once you go through this regulatory process and everybody understands the merits of this case, we're confident in the approval of the overall transaction. So something that we're very excited about that we hope to see closed in 2025.

Question: Eric Luebchow - Wells Fargo Securities, LLC - Analyst : Thank you, guys. DISCLAIMER Refinitiv reserves the right to make changes to documents, content, or other information on this web site without obligation to notify any person of such changes. In the conference calls upon which Event Briefs are based, companies may make projections or other forward-looking statements regarding a variety of items. Such forward-looking statements are based upon current expectations and involve risks and uncertainties. Actual results may differ materially from those stated in any forward-looking statement based on a number of important factors and risks, which are more specifically identified in the companies' most recent SEC filings. Although the companies may indicate and believe that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate or incorrect and, therefore, there can be no assurance that the results contemplated in the forward-looking statements will be realized. THE INFORMATION CONTAINED IN EVENT BRIEFS REFLECTS REFINITIV'S SUBJECTIVE CONDENSED PARAPHRASE OF THE APPLICABLE COMPANY'S CONFERENCE CALL AND THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE CONFERENCE CALLS. IN NO WAY DOES REFINITIV OR THE APPLICABLE COMPANY ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY EVENT BRIEF. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S CONFERENCE CALL ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.