T-Mobile 3Q16 Earnings Call Notes

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T-Mobile US (TMUS) Q3 2016 Results

John Legere

I love the industry dynamics right now

“I’ve got to be honest. I love the industry dynamics right now. Any gains by the number four are not coming at our expense, period. And anything that weakens number one or number two, or loses their focus is great for us. Now meanwhile, we are not the player in this game making questionable economic choices or under investing in the network. You may be easily able to guess who that is. We’re comfortable with the competitive climate and we’re definitely comfortable taking share from the big guys.”

Now have 70m customers

” 2 million net adds in Q3, the 14th consecutive quarter with over 1 million net adds. By the way, averaging 1.9 million net adds per quarter, that brings us to 69.4 million customers. ”

Look at AT&T’s results and you’ll see why they are buying Time Warner

” if you look and you compare and contrast their earnings and what’s happening, for example, with ours, you understand why they are trying to do a vertical integration, which is in effect investing in new businesses and revenue streams as opposed to something with synergies. What yelled loudly in their results was, when you normalize, they lost 354,000 postpaid customers at a time when we’re certainly adding many, many. I would point out a couple of things on that, by the way. You did notice as well that U-verse was way down, DIRECTV was barely growing. So, they’re migrating with significant amounts of capital to try to grow revenue streams. An interesting factoid for you, which is when they announced in Q2 of 2014 the DIRECTV acquisition, they have not added a postpaid phone customer ever since. So one of the things pertinent to T-Mobile is, I would say, the great news is that they’re going to be further defocused than they are now, and the upside opportunity to continue to acquire businesses in this space for us is tremendous.”

John Legere being John Legere

“Yeah, let’s – and Neville is here, and for those of you who don’t have a video, he is sitting in his underwear because a couple of years ago, he promised that if the stock ever approached or pass $50 even for a moment, he would join us in his underwear, which he did shortly today.”

J Braxton Carter

Taking up guidance on customers and EBITDA

“Let me now come to the update of our 2016 guidance. In light of the continued strong customer momentum, we are taking up our target for branded postpaid net customer additions to 3.7 million to 3.9 million, up from the prior target of 3.4 million to 3.8 million. For adjusted EBITDA our new target range is $10.2 billion to $10.4 billion, increasing and narrowing the prior target range of $9.8 billion to $10.1 billion.”

Recall of Galaxy was very unfortunate

“Well, let me handle the recall situation real quickly and then we’ll give it to Neville. A very, very unfortunate situation. This recalled handset was probably one of the best, most popular handsets that we’ve launched in some time. And they were absolutely flying off the shelf. It’s such a shame that we’ve seen those types of issues.”

Michael Sievert

Switching moments are great for T-Mobile

” it’s kind of obvious but switching moments like that are great moments for T-Mobile. We had a big switching moment this quarter. You saw the results and how significantly we grew at the expense of our competitors with a switching moment like iPhone 7. And I want to point there’s huge opportunity for that in next year as well. “