T Mobile 3Q15 Earnings Call Notes

More in common with tech companies

“We are a mobile internet company and we’d like to disrupt things. So I think we have a lot more in common with the tech companies of Silicon Valley that are traded here on the NASDAQ.”

$1.9B in adjusted EBITDA, 487m in adjusted free cash flow

“adjusted EBITDA came in at $1.9 billion, up 42% year-over-year. The adjusted EBITDA margin expanded from 24% in the third quarter of last year to 30% this year. I am particularly pleased that we generated meaningful positive free cash flow this quarter. Free cash flow was $411 million or $487 million adjusting…”

Upcoming broadcast auction will be transformational for our company

“the upcoming broadcast incentive auction this is going to be transformational for our company. We’ve talked about the benefits of low band spectrum. Customer retention, better in building penetration in the major geographical areas geographical expansion of the much more economical rate. And we are prepared to be as always disciplined but aggressive in the upcoming auction.”

We think we have plenty of buying power and don’t intend to access the equity markets

“Consistent with all of our prior disclosure sale, we believe that we have more than adequate cushion from a leverage ratio standpoint with no adverse consequence to our existing bondholders or corporate rating to fully fund whatever we need to do in the upcoming broadcast incentive auction. And we currently have no intend to access the market from in equity standpoint or any equity linked security.”

We’ve met with the rating agencies to confirm that

“So we’ve met with all the major rating agencies, have confirmed that position and I’m really pleased to announce that we just put on Bloomberg yesterday we’re kicking off a process to issue secured debt in T-Mobile US for the first time”

Sprint is doing a good job

“I would expect Sprint to post some positive phone results this quarter I think they’ve been doing a good job. But I’ll just point out that this was nine quarters in a row that the postpaid porting against Sprint is 2:1 or greater and that’s the trend right now.”

Deploying low band is a huge lift for the business

“the change in the network over the last 12 months to 18 months with the advent of low band and the pace at which we’ve been able to both clear and then deploy that spectrum is a huge, huge lift for the business.”

We’ve dobled our LTE footprint

“The cool piece for us is the geographic expansion. We’ve more than doubled our LTE footprint year-to-date by the end of the year we’ll have added a million square miles of LTE coverage across the US. So the pace and the reach of our LTE network John referenced fastest growing as well as the fastest it was pretty remarkable. And of course we’re doing it ourselves. We built this footprint as T-Mobile not true acquisition or a combination of rural carriers.”

The next 6-12 months will be fascinating from an industry structure standpoint

“This is one of several industry structure question that I find fascinating things that are going to make the next 6 to 12 months just a really fascinating time period”

There will be dark horses showing up to the auction. There aren’t going to just be 4 wireless carriers

“I do expect some dark horses to show up. And I think the dark horses showing up is nothing more than clarity for what we all are expecting is in industry that I’ve said many times that if the world believes that has all content will find its way to the internet and all internet will be viewed mobily. If we really believe that that structure will be managed by four wireless carriers vertically integrating and reverse and horizontally moving into the rest of these industry. It’s crazy.”

Verizon Go90 TV isn’t going to cut it

So you think about what Verizon just did with Go90 launching a curated video service that nobody asked for coming out in week one number 220 app in the Apple Store and then shrinking after four weeks to 1,065 that’s clearly not going to fly and it’s not going to be their bridge to profitability in 2017. ”

Comcast is dipping its toe in too

“And I think we saw Comcast discussed this morning tipping its toe in and using some optimality it may have to look at Wi-Fi on a MVNO basis and I think these are all just everybody looking at where they may go.”

Our strength is that we have the best brand right now

“The benefit that T-Mobile has right now is that we have the fastest growing brand and the fastest growing business with generating good cash flow we have a very strong business standalone but we are also a fascinating component in that continuum because we do control all the growth in the best brand in the mobile piece and as you look forward two to three years we will be far more thoughtful about how things move forward.”

People like Comcast probably want owner economics, not just MVNO

“It’s a tough model. There are owner economics and I certainly think that if anybody has significant scale they would want owner economics. I am pretty sure that in the long term strategy of a player like Comcast they didn’t have a strategic board meeting and say hey, let us be an MVNO they are thinking of what’s happening with their business and what’s the natural evolution and they have a put option on the table, they have an old historical agreement that probably neither them but Verizon thought about using, why not use it.”

Hard to imagine a future in which Comcast is an MVNO through verizon

“could you ever see a long term future where being an MVNO through Verizon is the strategy that Comcast will use for mobility without owner economic et cetera. I find that hard to believe”

Adding 1m square miles of coverage. There’s 3.2m square miles in the entire country

“we’re adding this year 1 million square miles of coverage. You think about that and this is a country with something like 3.2 million square miles in the entire country. ”

Praising Sprint for a second time

“I think we’ve caused a competition to invest in your network and get speed and let’s this maybe the second time this call and history may be made that I give Sprint credit is the bottom of the pack is moving up.”

Everyone is investing except for Dish

“all wireless carriers are investing heavily in their networks that is except by the way for their big wireless holder spectrum dish who has been given a lot of waver by the FCC on utilization of some of the spectrum for satellite so there could be used to create a competitive environment in the U.S. and so far it has put to work exactly no amount of that spectrum”