T-Mobile 4Q16 Earnings Call Notes

John Legere

Now up to 71m customers

“Our customer growth numbers led the category again with 2.1 million total net adds in Q4; by the way, the 15th consecutive quarter with over 1 million net adds. Maybe even more impressive, for full year 2016, we added 8.2 million customers making 2016 the third year in a row with over 8 million net adds. That brings us by the way to 71.5 million total customers at the close of the year.”

Sprint is trading like an option because people are hoping someone puts them out of their misery

“Now, going into this year too, you’ve now clearly seen some moves that can only be deemed desperation. Sprint, remember these are exploding prices, these are prices that canalize you and then they explode. So what’s happening at Sprint is, last year’s tantalizing appetizer is exploding, so their churn is going up so they’re bringing in a whole new group of people who need to be educated as to what that is. It’s a fake price, on a network that doesn’t work with CapEx that is not being put into it…The stock is trading like an option, because somebody is praying somebody is going to help them out of their misery, so that’s not the competitive environment, that’s them.”

Verizon’s unlimited data plan is an admission that their network advantage is over

“by the way, the thing that you can learn from that is, they finally agree their network advantage is over. Welcome to the game, Verizon. Let’s compete on price, let’s compete on network, and remember that is kind of the scenario where we are. ”

Dish has to do something with their spectrum this year

“And right now, you know that going into this year, you know that DISH needs to do something. Regulatory wise, they have to do something with their spectrum. Sprint is clearly playing the game for next quarter. And that they’ve got good spectrum, but they don’t have a franchise and they are candidate for being a part of a greater organization either through scale or something else.”

Verizon told MVNOs that they’re not going to get onto their rails through MVNOs

” if you think about what happened, the cable industry has been hoping to use MVNOs on Verizon to get economics to do something in the wireless entry point. However, there’s no possible way they’ll get economics to do unlimited, which has now become the industry standard, and that will compel them. And don’t rule out that part of what Verizon did with their unlimited offer is send a message to the cable industry that you’re not going to ride us to what’s going to happen on your entry into wireless.”

After this auction there are going to have to be discussions about what this industry is going to be

” I couldn’t be more excited about the period that’s going to come up when this auction is over, while we continue to do what we just announced and then engage in understanding what the future of this industry is going to be, which is fascinating.”

Expectations are high for the 10th anniversary iPhone

“The 10th anniversary of the iPhone, which again Apple is very tightlipped about innovations they’re bringing to the market, but I think all expectation is that that’s going to be a very significant step up in functionality and form that will certainly drive switching or reinvestment in your certain carrier during the upcoming year.”

Neville Ray

Been adding small cells in prep for 5G

“Densification, we’ve been adding small cells. We’re just about a thousand small cells now. And we’ve been moving very quietly, but very strongly and thousands more will be ready this year. Not because we desperately need to densify, but because we’re getting ready for two important things. One, 5G, but more importantly and in the near-term, the use of 5 gigahertz spectrum for LTE. And so everybody talks about this LTE in unlicensed or LIA. That’s a fact that that will happen in 2017. And we’ll open up new spectrum opportunities in the unlicensed bands for T-Mobile to leverage in 2017, 2018 and on into the 5G space.”

Michael Sievert

More phones work across all networks today

“And lastly, and perhaps, most importantly, we’re seeing something that’s really changed in the industry and doesn’t get discussed enough. And that is a broad compatibility of phones across all four major carriers. Wasn’t true even two years ago. But today, virtually, every super phone out there in the hands of competitive customers is 100% completely compatible with T-Mobile. And that opens up a brand new opportunity to attract people to come over and switch and keep their phone, which means this idea that people keeping their phones longer should inhibit switching is a historical assumption that’s decreasingly true as time goes on.”1