T-Mobile US (TMUS) Q2 2025 Earnings Call Transcript

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DATE

• Wednesday, July 23, 2025, at 4:30 p.m. EDT

CALL PARTICIPANTS

• President & Chief Executive Officer — Mike Sievert
• Executive Vice President & Chief Financial Officer — Peter Osvaldik
• President, Marketing, Strategy & Products — Mike Katz
• President, Consumer Group — Jon Freier
• President, Business Group — Callie Field
• President, Technology — Ulf Ewaldsson
• President, T-Mobile US — Srini Gopalan
• Vice President, Investor Relations — Quan Yao

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TAKEAWAYS

• Postpaid Net Additions: Total postpaid net additions guidance raised to 6.1 million–6.4 million for 2025, with a 500,000 increase at the midpoint; includes approximately 100,000 expected fiber net additions.
• Postpaid Phone Net Additions: Guidance for postpaid phone net additions increased to 3.1 million.
• Postpaid ARPA Growth: ARPA growth up over 5%, the highest rate in eight years.
• Service Revenue: Total service revenues grew six percent, well over double the rate of our closest competitors
• Postpaid Service Revenue: Postpaid service revenues grew 9% year over year in Q2 2025, an acceleration from Q1.
• Core Adjusted EBITDA: Core adjusted EBITDA guidance raised to $33.3–$33.7 billion for 2025, a $100 million increase at the lower end driven by higher customer growth expectations.
• Adjusted Free Cash Flow: Adjusted free cash flow guidance increased to $17.6 billion–$18.0 billion, up $100 million at the lower end; Achieved a record $4.6 billion in adjusted free cash flow (non-GAAP) in Q2 2025.
• Cash CapEx: Cash CapEx remains at approximately $9.5 billion for 2025.
• MetroNet Acquisition Closing: MetroNet joint venture closing scheduled for tomorrow, with T-Mobile US to control the residential business and share 50% of economics in the JV.
• Lumos Acquisition Complete: JVX (Lumos) acquisition completed in April, supporting the T-Fiber launch.
• Fiber Builds: Management expects at least 100,000 fiber net additions, mostly in the second half and through both joint ventures and wholesale channels.
• 5G Broadband: T-Mobile US led the overall broadband industry in net additions for the 14th straight quarter as of Q2 2025, achieving record business 5G broadband net additions in Q2 2025.
• Network Expansion: 1,000 greenfield sites added year to date as of Q2 2025, with plans to bring on nearly 4,000 sites this year.
• UScellular Acquisition: The UScellular transaction is set to close on Aug. 1, expanding site coverage by one third -- from 9,000 to 12,000 sites -- and increasing capacity in the combined footprint by 50% or more.
• T-Satellite Launch: T-Satellite service launched commercially, covering 500,000 square miles in previously uncovered U.S. regions.
• Digital Transformation: The T-Life app reached over 75 million installs as of Q2 2025, with about two-thirds of consumer phone upgrades now conducted digitally as of Q2 2025.
• Divestiture of 800 MHz Licenses: An agreement reached to divest all 800 MHz licenses to Grain Management for $2.9 billion in cash, all of Grain’s 600 MHz licenses, and future revenue participation; expected to close in Q4 2025 or Q1 2026, generating approximately $850 million in incremental income taxes after the close.
• Postpaid Household Market Share in Smaller Markets: T-Mobile US said its household market share in smaller markets and rural areas now exceeds 20% as of 2025, surpassing its goal.
• ARPA Premium Tier Adoption: Customers are selecting our new Experience Beyond plan at more than double the rate of Go5G Next just a year ago, and up over 50% sequentially in Q2 2025.
• Cash Tax Benefit Guidance: Management expects an approximately $1.5 billion cash tax benefit in 2026 from legislation, with guidance unchanged for 2025.
• Churn Trend: Management anticipated churn to be up in Q2 2025, but expects churn in Q3 2025 to be down sequentially and year over year, probably flat to potentially slightly up for Q3.
• Business Segment Growth: Business group again led the industry in net additions, with the "highest ever business 5G broadband net additions."
• Network Perception Opportunity: Management stated that only about 20% of switchers in the broader market believe T-Mobile US has the best network as of Q2 2025, highlighting a significant awareness opportunity.

SUMMARY

T-Mobile US (NASDAQ:TMUS) raised its full-year 2025 guidance across several metrics, reflecting record-setting postpaid net additions in Q2 2025 and strong service revenue growth in Q2 2025. Leadership emphasized strategic expansion through acquisitions, including MetroNet and UScellular, as well as network investments, including the commercial launch of T-Satellite in Q2 2025 and extensive greenfield builds with plans to bring on nearly 4,000 sites in 2025. The company highlighted accelerated digital transformation, a broadening premium ARPA mix, and entry into new business adjacencies through partnerships and fiber. Guidance reflects incremental tax and monetary benefits from recent legislation and spectrum license sales, with management reiterating discipline in capital allocation and emphasis on unlocking shareholder value through operational and financial scale.

• Mike Sievert addressed the market opportunity in network perception, noting a "massive opportunity from all of those tens of millions of customers who went elsewhere in the 4G era deliberately choosing what was then the best network," indicating a targeted brand-building campaign will ensue.
• Management described the digital transition as transformational. About two-thirds of consumer upgrades now occur via our app as of Q2 2025, which may further lower customer acquisition costs and support higher operating leverage as uptake continues.
• Sievert said the UScellular transaction will result in an expected fifty percent or more increase in capacity in the combined footprint enabling a one-third expansion in site coverage focused on smaller and rural markets.
• The CFO stated, "We now expect core adjusted EBITDA to be between $33.3 and $33.7 billion for the full year 2025, an increase of a hundred million at the lower end of the range."
• Management confirmed the 800 MHz license divestiture proceeds and associated future participation rights are incremental upside to the guidance laid out at Capital Markets Day last year. The transaction is anticipated to generate approximately $850 million in incremental income taxes after the close.
• Srini Gopalan quantified T-Mobile US's broadband ambitions, equating its combined FWA and fiber strategies to the equivalent of forty to forty-five million homes passed as a broadband player, based on current and planned scale as of Q2 2025.

INDUSTRY GLOSSARY

• ARPA: Average Revenue Per Account, a metric reflecting average monthly revenue per wireless account, inclusive of all lines and services per account.
• FWA: Fixed Wireless Access, a service providing broadband via wireless networks as an alternative to wired connections.
• T-Satellite: T-Mobile US’s satellite-based wireless service extending coverage to regions lacking terrestrial cellular.
• Slicing: Network slicing -- a 5G technology that allows the creation of multiple virtual networks on a shared physical infrastructure for specialized use cases or guaranteed service levels.
• Greenfield Builds: Construction of new wireless network infrastructure in previously unserved or underserved areas as opposed to upgrades or overlays.

Full Conference Call Transcript

Mike Sievert: Okay, Kathy. Thank you. Thanks for keeping us out of trouble over there. Great job. Welcome, everybody. Thanks for being with us. Good afternoon. We're coming to you live from Bellevue today. We've got the whole team here, and we are excited to talk to you about our Q2 results and more importantly, to take your questions. And what a quarter it was. Our results were, in one word, if I had to pick one, fantastic. This team right here did it again, delivering the consistent, differentiated profitable growth that we are known for. We led the industry in both customer growth and in financial growth across multiple metrics. And more importantly, we smashed our own records.

This was the greatest Q2 for growth ever in T-Mobile US's storied history with the best Q2 postpaid phone nets ever, the best Q2 for total postpaid net additions ever, and our best ever Q2 on gross additions too. With both gross and total postpaid and both gross and net total postpaid adds up double digits year over year. Against a very strong 2024 comp. Equally as exciting, our postpaid account nets also accelerated year over year, and we saw our postpaid share of households grow. In every single cohort within the top one hundred. And, of course, also in smaller markets and rural areas.

And the momentum is continuing with share of porting leadership and overall customer momentum right where we want it. Now you may have heard others say that this is a highly competitive environment. And it is. But we love it that way, and we thrive in a dynamic environment like this one. Our results including our value creation results in this dynamic environment, simply speak for themselves. The quality of our customers continues to improve at a rapid pace with ARPA growth up over five percent, our highest growth in eight years. Our customers are continuing to self-select up the rate card. Here's a new stat for you.

After launching our new rate plans in April, within that premium segment we've been talking to you about, customers are loving our most premium tier within it more than ever. Selecting our new experience beyond plan at more than double the rate of Go5G Next just a year ago and up over fifty percent in just one quarter. Our business group continues to break growth records as well, leading the industry once again in net additions. And we are not standing still. Just yesterday, we announced a new multiyear partnership with cable to provide mobile service to small and mid-market businesses to supercharge our growth in an area where we have little exposure today, in a true win-win.

The deal focuses our partners in the exact areas that would drive incremental revenue because our strongest T-Mobile US branded growth comes on the one hand from the very smallest businesses transacting at retail where we already compete with cable, and on the other hand from large enterprises above a thousand lines, which are not included in the deal. So while it's gonna take some time for this to grow into something meaningful, I'm super excited about their capabilities to generate growth in the SMB sector in a way that will be truly incremental for T-Mobile US. Okay. I wanna spend a moment on something that I'm very passionate about. Our network. America's best network.

Over the last couple of years, we've seen a significant increase in the number of customers citing our network as the reason for switching to T-Mobile US. And that's a great start, but the reality is most of our prospects don't yet know we have the best network. In fact, only about twenty percent of switchers in the broader market believe we do. This represents an enormous runway for us. Network perception has now become a major focus for us. For a simple reason. There's a massive opportunity from all of those tens of millions of customers who went elsewhere in the 4G era deliberately choosing what was then the best network.

Well, there's a new best network in America, and you'll be seeing us bring that message to consumers and businesses in really innovative ways. Until every person in America has heard why there has never been a better time to join T-Mobile US. And on the substance of our network leadership, we are on the move. We're continuously pushing across multiple strategies to widen our lead and cause the rest of the market to follow. That's why we're out there with greenfield builds having already lit up a thousand sites year to date with a plan to bring on nearly four thousand sites this year alone.

That's why we were the first carrier to roll out things like nationwide 5G advanced, automated slicing capabilities, and higher order carrier aggregation. And we won't stop. It's all about getting more and more performance for our customers from every capital dollar. And every piece of radio spectrum. The result? Our network lead continues to widen. We're also shoring up our network in smaller market and rural areas with UScellular. With all required approvals now in place, I'm pleased to say that we plan to close the transaction and become one team next week on August first. We can't wait to welcome UScellular customers to the T-Mobile US family.

The combination gives us an expected fifty percent or more increase in capacity in the combined footprint and our site coverage will expand by a third from nine thousand to twelve thousand sites. Taken together with the greenfield builds I mentioned earlier, the network experience in smaller markets in rural areas is being fundamentally transformed. Just further fueling our ability to compete and grow in this space. And just this morning, we launched our groundbreaking T-Satellite service commercially, further extending our network to connect customers in the five hundred thousand square miles of this country that are not covered terrestrially by anyone. And with a truly differentiated service. Okay. Now let me turn over to 5G broadband. No surprise.

Given the strength of this product, we delivered yet another stellar quarter. In fact, for the fourteenth straight quarter, we led the overall broadband industry in net additions. Double clicking into it, T-Mobile US for business. Also led the industry this quarter, achieving our highest ever business 5G broadband net additions. Overall, both speeds and usage continue to rapidly grow, demonstrating the mainstream nature of this product while satisfaction is as high or higher than ever as seen in our record low churn. Let's talk fiber. Last month, we launched T-Fiber after completing our JVX acquisition of Lumos in April, and tomorrow, we to close our JV acquisition of MetroNet.

With both up and running under the T-Fiber banner in the second half, we're poised to deliver one hundred thousand or more fiber nets. On top of our planned 5G broadband nets this year. We are off to the races. Let me spend a moment right now on our ongoing digital transformation. At Capital Markets Day, we shared an audacious transformation plan designed to meet customers where they are with breakthrough enabled sales and services experience. Breakthrough AI-enabled sales and services experiences. And a step change improvement in our business model at the same time. I'm here to tell you that we are more than on track. Look at how far we've come in such a short time.

A year ago, T-Life was just getting started. Our T-Life app now has over seventy-five million installs, and it's one of the most downloaded apps in the App Store. And it's a destination for tens of millions of customers to transact and access the incredible magenta status benefits that they love. As an example, a year ago, very few of our phone upgrades occurred digitally. Today, we've checked that box. About two-thirds of our consumer upgrades now occur via our app. And we're exiting Q2 with significant new momentum in digital ad alliance and turning next to new customer acquisition. I have never been more excited about the potential here for our customers and also for our business model.

Speaking of, let's talk financials. Our best-in-class customer results continued to drive industry-leading financial growth across key metrics yet again in Q2. Postpaid service revenues grew nine percent year over year, an acceleration from Q1. And total service revenues grew six percent a rate well over double that of our closest competitors. Our industry-leading core adjusted EBITDA growth was six percent year over year. We delivered $4.6 billion in adjusted free cash flow a new Q2 record, translating to once again industry-leading adjusted free cash flow conversion from service revenues of twenty-six percent. Listen. What these results demonstrate overall, it should come as no surprise.

T-Mobile US's industry-leading value proposition of best network, best value, and best experiences is an exceptional combination. Our strategy is differentiated. It's durable. And it has tons of room to run. Not only do we see opportunity to deliver outsized growth in underpenetrated areas like smaller markets, T-Mobile US for business, and broadband alongside smart new adjacencies But as we solidify our network lead, we're also demonstrating that there's room to broaden among network seekers in the top markets where we're most established. There are growth opportunities everywhere we look.

We have built these differentiated and durable advantages over time and with unwavering focus This team sitting here in front of you looks around corners, and we show up every single day ready to win. To win today, and to win tomorrow. And we won't stop. We won't stop doing what's right by customers. We won't stop shattering the very records we set, and we won't stop delivering against the lofty long-term ambitions that continue. To set T-Mobile US apart. Okay. Peter, over to you to provide a quick update on our key financials and our guidance.

Peter Osvaldik: Perfect. Thanks, Mike. Hey. As you can see, we had a fabulous Q2, which underpins the confidence in our increased guidance. Before we jump into those updated full-year expectations, I'll note they now reflect the inclusion of MetroNet, but exclude UScellular, for which we will provide an update later after the close. Okay. Starting with customers. We are raising our total postpaid net additions expectations to be between 6.1 to 6.4 million, an increase of five hundred thousand at the midpoint. Approximately a hundred thousand of the total will be fiber net additions. We are also increasing our expectation for postpaid phone net additions and 3.1 million, highlighting the great momentum we're seeing in the business.

Both of these represent our highest ever customer guidance at this point in the year. We also continue to expect strong postpaid ARPA growth of at least 3.5% for the full year, as we see continued deepening of customer relationships and we now expect 2025 service revenue growth of at least 6% for the full year. We now expect core adjusted EBITDA to be between $33.3 and $33.7 billion for the full year, an increase of a hundred million at the lower end of the range which includes funding, are significantly increased total postpaid net additions expectation. As part of that, we expect Q3 core adjusted EBITDA to be approximately $8.5 billion as we accelerate investments into our business. Okay.

Turning to cash CapEx. We continue to expect cash CapEx to be approximately $9.5 billion for the full year. We also expect adjusted free cash flow, including payments for merger-related costs in the range of $17.6 to $18 billion also representing an increase of a hundred million at the lower end of the range. I also wanted to touch on the upcoming close of the joint venture transaction, which is acquiring MetroNet. As with the Lumos joint venture, the consumer experience and residential business will be fully owned by us and we will also share in fifty percent of the joint venture economics.

We will treat the acquired customers as a base adjustment in our third quarter results, And as we fuel customer growth, we expect the retail business to be slightly accretive to service revenues while remaining neutral to adjusted EBITDA and adjusted free cash flow this year. Additionally, our fifty percent equity stake in the joint venture will be reported below the line as an equity method invested and is expected to be immaterial to net income this year. Next quarter, we will provide a more comprehensive update regarding the contribution of both of our fiber joint ventures. Okay. Let me also spend a moment on the benefits from the recent legislation coming out of DC.

While this won't meaningfully impact our 2025 cash tax expectations, we do expect an approximately $1.5 billion benefit to cash taxes in 2026 which will be deployed thoughtfully guided by our capital allocation philosophy. And finally, I wanna provide an update on the sale of our eight hundred megahertz license We have reached an agreement with Grain Management to divest our entire portfolio of eight hundred megahertz licenses in exchange for a combination of $2.9 billion in cash, all of Grain's six hundred megahertz licenses, and have additional potential upside via participation in future proceeds Grain receives from monetizing the licenses after a minimum return to Grain.

The transaction is anticipated to generate approximately $850 million in incremental income taxes following the close, But as a reminder, all of the net proceeds are incremental upside to the guidance we laid out for you at Capital Markets Day last year. We expect this transaction to close in the fourth quarter of 2025 or the first quarter of 2026. Okay. To sum it all up, not only did our results continue to demonstrate our ability to consistently execute and deliver outsized and profitable growth, but we cannot be more excited to carry our strong momentum far into the future. Alright. And with that, I will now turn the call back to Kathy to begin the Q&A. Thanks, Peter.

Quan Yao: Okay. Let's get to your questions. You can ask questions via phone by pressing star then one and via X by sending a post to at T-Mobile US IR or at Mike Sievert using hashtag TMUS. Will start with a question on the phone. Operator, first question, please.

Operator: And your first question today will come from John Hodulik with UBS. Please go ahead.

John Hodulik: Great. Thank you guys. And two if I may. First, you guys saw strong sub growth in the quarter despite slightly higher churn. Could you just give us an idea, Mike, of what you're seeing in the market today? How you expect churn to sort of trend in the step in half and what you're seeing just from a competitive standpoint? And then number two, thanks for the disclosure on the fiber side. You know, a hundred thousand for the year. Can you give us a little more color on that?

Is that sort of a fifty thousand run rate for the next two quarters, or is that does that include some of the we saw here in the second quarter? And just any other color can give us on the sort of growth of that business either today or over time? And do you anticipate other opportunities to for some inorganic growth in that in that business? Thanks.

Mike Sievert: Okay. Terrific. Thanks for the questions. Let me start with Srini on the competitive environment. Although I'll invite anybody to jump in. And then we'll turn to Mike on fiber and what we can expect for the second half. So, Srini, what are we seeing out Thanks, John. So quick sense of the competitive environment. Firstly, we like the fact that it's a dynamic competitive market.

Srini Gopalan: As natural share takers, we enjoy these moments when there's more movement and more switching in the market. And part of that is our conviction that the fact that we win in these moments has far less to do with promotions. It has far more to do with the compelling proposition we have. Now I've worked in a few different telco markets, and seldom do you see the kind of unicorn position where one telco or one provider is able to provide not just the best network, but also the best value and best experience. And that unique proposition is what really powers our ability to win in situations like this.

Talking about the market itself, this is a market where the dynamics of competition changes and evolves. So we go through periods where the focus is on rate plans, Currently, we're in a period where the focus is on device promotions. The reality is even in a foe even as the focus shifts to device promotions, there's kind of more spend up front, but the CLVs we're generating are robust and pretty consistent with our history of CLVs So this feels like a really good economic investment, and we feel very, very comfortable making that investment. I mean, the driver to that is, yes, you have more outflow upfront in the device promotion, but you get longer lifetimes.

You get higher ARPUs. All of that comes together to make a solid and robust and dynamic environment, and we like the dynamic better bit. I think the last point I'd make on that is if we just lift out of kind of, you know, the dynamics of competition, shifting sands, how we compete in the rest of it, The reality is this is a great time to be in the US wireless industry. As a customer, and as a participant. As customers in the last three to four years, we've seen customers speeds grow three to four times.

Data consumption grow three to four times, and at the same time, customers have paid less in real terms for the product. And as an industry, we've seen a fifty percent growth in free cash flow which is the one metric that really matters from a value creation perspective. For the industry as a whole. So it's a really good time to be in wireless, and we're enjoying the dynamic nature of the competition.

Peter Osvaldik: K. Yeah. I mean, the only thing I'd add around, John, your question around churn is much as we foreshadowed, we anticipated Q2 to be up. Given the finalization of our rate plan optimizations. What we're anticipating going forward I think about Q3, sequentially, we anticipated being down. And year over year, probably flat to potentially slightly up, but we're through that heightened area of churn for us and we're seeing great dynamic now. So that's probably the color around Q3.

Mike Sievert: Okay. Sounds great. I don't much to add to that. Well said. Mike, wanna talk about fiber? What are we gonna see in the second half? Yeah. So first of all,

Mike Katz: after a couple years of being in pilot mode with T-Fiber, we officially launched last month both in the Lumos markets as well as our wholesale markets, our T-Fiber. And know, it's been it's been a few weeks, and so far, it's going great. And, you know, the thesis that we that we were excited about as we got into the fiber business that, you know, our unique assets would could help us penetrate markets. There's everything we've seen so far has reinforced that to us. The hundred thousand that Mike spoke about a second ago is coming both through the two JVs as well as the wholesale markets. The MetroNet deal, of course, closes tomorrow.

And we will commercially launch T-Fiber in those markets late later this year. And so the hundred thousand contemplates the combination of both the JVs as well as the wholesale markets. In terms of the question about other inorganic, obviously, we can continue to keep an open mind as you would expect us to about that. But the hundred thousand is with the organic or the deals that we've closed. That will all be closed as of tomorrow as well as the markets that we've already been operating within wholesale.

Mike Sievert: One of the things we haven't talked about much is our overall go to market approach, and I just I love it so much. You know? So we're obviously, we're leaders in broadband. We've been the share taking leaders in broadband for fourteen quarters. And now we're able to add in many places across the country T-Fiber to that. But it's on an infrastructure that already exists from a go to market standpoint.

And we've been able to engineer an IT platform for T-Fiber that I think is just fantastically elegant because this will be a model that involves wholesale partners, as Mike just mentioned, JVs like Lumos, and MetroNet and possibly future JVs, all of whom can plug into a unified T-Fiber platform incredibly easily. So it took us a while to get it done, but this thing's fantastic. And it really gives us terrific flexibility when it when it comes to our ability to do what we do best go to market and serve customers. So I'm really excited about it.

Quan Yao: Thanks, Mike. Thanks, John. Operator, next question, please.

Operator: And your next question today will come from Benjamin Swinburne with Morgan Stanley. Please go ahead.

Benjamin Swinburne: Thank you. Good afternoon. Just reflecting back on your Capital Markets Day last September to now, one metric that really jumps out is the ARPA growth. I think you talked about two percent growth two percent plus last year over kind of the three-year planning period. You're up almost five percent year to date. Could you guys unpack a little bit of the drivers there and whether you're more optimistic about growth in that line and service revenue over the course of the next couple of years just given the strength that you've seen? And then like, I didn't I didn't think of you having, doing a deal with the cable operators as a possible outcome on this call.

But I wanted to ask, you know, if you could spend a little more time on your strategy there and why you think it makes sense for T-Mobile US and what the opportunity is long term around partnering with that industry going forward.

Mike Sievert: I love it. Well, we'll start with Peter on ARPA. And I think Ben's trying to be polite. Are you sandbagging us over here? What's going on? Right. Right. Yeah. And the multiyear AR can

Peter Osvaldik: what do you do? Look. Much like we said at Capital Markets Day, our job and that is to put together a set of rational aggressive assumptions and then go try to beat them. And I'm not here to start, you know, updating twenty-six or twenty-seven. That's not the job. There'll come a time. We'll have to layer in UScellular as well as I mentioned in the prepared remarks. But ARPA growth is definitely going fabulously well this year. And that's the underpinnings for both the service revenue increase now at least six percent, but also the strength there of three and a half percent this year.

And, of course, that does have to do in part with the rate plan optimizations that we executed on And that's why you see a little bit of year to date versus year to date, you know, difference versus the second half? Because remember, we began those late in Q2 of last year. So you're kind of lapping right now the period where we have this year the benefit of two rate plan optimizations, the finalization of the first one. And the very first one. And now we'll have the real true organic growth in the second half.

And what really is exciting, what underpins that as Mike highlighted in his prepared remarks is just what we're seeing from a rate plan perspective. Customers are really appreciating the value that we're packing into the plans. Combined with, of course, the best network and experience proposition and they're self-selecting up the tiers to our most premium tier at very exciting level. So not here to update twenty-six and twenty-seven. Our job is to keep this momentum going in twenty-five and then thoughtfully update you when it comes to

Mike Sievert: We really didn't see this coming. I mean I mean, Jon Freier and team just went out and found a way to connect customers to these value propositions. And I also think it underscores that customers are reacting to the incredible differentiation T-Satellite, which is included in these upper-end plans. So whatever it is, great execution, great value proposition, it will it's a little bit of surprise. I'll give you a couple stats on this. We've been talking about the sixty percent of our loading being in these premium tiers, but that's multiple rate plans. And I said in my prepared remarks that at the high end of that, we've doubled it.

What we've done is we've taken it from ten to twenty. Of the sixty. As a denominator. So ten to twenty and then another forty more to make sixty. So of the total pie, It's fantastic. Yeah. And that we didn't really see it coming. Know, to be honest. So people are moving up even within premium to more premium because they want more of what T-Mobile US has to offer. And I, you know, I love that. You know? And if, obviously, the second half, were round tripping last year's rate plan changes. So it'll, you know, be a little harder to deliver the same per percentage gain, but nominally, we feel really great with where we are.

So good. Oh, you asked about cable. Okay. Quickly on cable. I had a lot to say about it in my prepared remarks, so I'll try to repeat it. But, look, I think this is just incremental, and we've chosen a segment, business SMB, where we really don't have a lot of exposure. You know, as I said, we're kind of have a barbell business. We're way down in very small business, where we already compete with cable, and we tend to be growing way up in enterprise a thousand and above. We don't have a lot of market share nor win share in between.

So it's just a great win-win where I think most of those revenues will come in and be completely incremental. And that's just that's where we wanna be. You know, it's not the start of something. I mean, this is a multiyear thing. I hope it grows over time to become something really big and special. But the dynamics are different. You know, people are asking us, well, does this mean you're stepping into consumer or something like that? And, no, we're not interested in that because the dynamics are different in terms of the incrementality in our math. And what we love about these business segments that we focus the partners on is it's almost entirely incremental.

So it's great for what it is. It'll grow over time. I think be really productive, but it's not the start of something that will open up new segments. After that.

Benjamin Swinburne: Great. Thanks so much.

Quan Yao: Thanks, Ben. Operator, next question, please.

Operator: And your next question today will come from Sam McHugh with BNP. Please go ahead.

Samuel McHugh: Hey. Afternoon, guys. You talked about only twenty percent of switchers perceiving T-Mobile US as having the best network. And I guess that's an increased over But what do you think you need to do to improve that? Is it leaning on advertising,

Mike Sievert: You know, what can, shift it up even further? Then secondly, on the cable and, you know, just to clarify, so they restricted from selling to certain subsets of the enterprise community then they can't sell to the super large enterprise. Is that the right reason? Thanks very much. Yeah. I'll start with this with the easy one. That is correct. So the deal limits our partners to a thousand lines and below or below a thousand lines to be specific. But let's go over let's talk do the first question and talk about brand. Maybe ask for both Mike and Jon to talk about what it takes to convince people

Mike Katz: Yeah. I mean, I here's here's the great news. Our own customers are convinced. One of the things that we've seen happen over the last couple of years is T-Mobile US customers already believe that they're on the best network. And the twenty percent stat that you just referred to are perspective And we look at twenty percent as a huge opportunity. You know, across every single geographic market in the in the US. And I think it's a combination of things. To make that to make them aware of this. Yeah.

Advertising certainly will be a part of it, and you saw after our announcement last month, we did kick off a pretty significant campaign that was, you know, kinda multifaceted with both TV advertising and you see it across our events, like at the All-Star weekend at Major League Baseball last weekend. So advertising certainly will be a big piece of it. Experience will be a big piece of it. When you when you walk into the store or you know, you go into the T-Life app, customers will be able to see what kinds of experiences are derived use it using our network.

But I think another huge piece of this is the network leadership that we have is not a moment in time. You know, this is, you know, we've known that we've had the net best network for a long time. It was great to have third parties widely recognize that. But this is a lead that we intend to keep and to widen. So I think a bit a big part of changing how customers perceive this is continuing to stay in the lead and expand our lead. And, you know, perhaps, you know, through this and Ulf can talk a little bit more about that too.

Mike Sievert: I'd just say one thing, which is, you know, Callie and team keep landing some of the most high-profile large enterprise and government customers in this country. And they choose T-Mobile US after they give everybody a try. That's right. You know? And they're choosing us because we're the best. And a lot of them now are standing up as third parties to talk about why they chose T-Mobile US. And when you have some of the most respected brands and government organizations and first responders talking about their choice of T-Mobile US, that kind of third-party endorsement really, really powerful.

Callie Field: If I could add on to that, Mike. You know,

Callie Field: T-Priority, we launched in Q1 of this year. And we've seen double-digit growth in new accounts with T-Priority since launch. And you have the city of New York who shared the stage with us to talk about why they chose the best network But we've also seen the city of Miami Police Department the LA County police or fire department, the city of El Paso, We're starting to see, like, the top ten cities and first responders say, hey. This is a network that performs on the nation's first 5G advanced truly nationwide 5G slice in a way that there's just no other option for us. So I think that really speaks to the strength of what we've built.

Mike Sievert: Terrific. Did we cover that one? Okay. Alright. Thanks, Sam. Operator, next question, please.

Operator: Your next question today will come from Craig Moffett with MoffettNathanson. Please go ahead.

Craig Moffett: Hi. Mike, you just talked about a moment ago

Operator: T-Satellite. I wonder if you could just dig into that a little bit. And the contribution that it had to your ARPU growth and but also how it sort of changes the way you think about serving rural markets

Craig Moffett: and customer segments. It sounds like it surprised even you with the kind of impact that it had on the market.

Mike Sievert: Well, Craig, I just love you. I could just count on you to ask it. We launched this thing at eight o'clock this morning, and you're wanting a business update. I love it. And but you're right. I mean, you know, in the run-up to it, which I think what you're to be fair to you, what you're talking about, I think people have been choosing our higher-end rate plans and to anticipating this launch during the beta period. Unfortunately, I can't unpack that for you, but our highest-end rate plans, as I mentioned in my prepared remarks, are more popular than they've ever been.

I do think an awful lot of how we will wind up monetizing this strategy will be through that kind of migration and selection within our rate plans. This is available to everyone at just ten dollars a month. That's also very appealing. I can't you know, I could be I'm willing to be wrong on this, by the I mean, I you know, this is a this is speculation at this point.

But I think it's gonna be really a popular catalyst to bring people into that deeper relationship with T-Mobile US which is just so great for us in so many ways because the more we can have that deep relationship, not only do they get T-Satellite, but they unlock all kinds of other benefits of membership that are sticky and satisfying. So it has the chance to create this virtuous circle. You're gonna have to check-in with us later. I mean, once we get a little more than one day of experience. But, you know, we're optimistic that we're gonna be able to land this as a truly differentiated service that people notice.

And not just T-Mobile US people, but AT&T and Verizon people too.

Craig Moffett: Just based on what you learned in the in the beta period, does it change your thinking about the way you deploy your network assets in very rural areas?

Mike Sievert: No. Not at all. And in fact, you know, part of what I mentioned in my prepared remarks is we are on it. We are on the build. A thousand sites on air so far. On a plan we, you know, greenlit late last year. With four thousand total in our plan for this year. And maybe Ulf, if you can talk about how we do this because we actually don't have a market by market methodology. It's informed by our AI algorithms where we build and maybe talk about this four thousand greenfield program that we have going on this year.

Ulf Ewaldsson: Alright, Mike. Al, we are incredibly proud of our network, and we

Ulf Ewaldsson: we not only intend to stay where we are, we think we are about two years ahead. We actually intend to extend this lead. And one of them is to make sure that every tower, every capital allocation we do go to the where it matters most for our customers. The way we're doing that is something that we internally call customer-driven coverage. We talked a little bit about that at our Capital Markets Day. But it's a way where we have millions and millions and millions of data points on experiences of real customers. Both when they are on the network, falling off the network, doing things in the and on everything they do.

And we combine that with business outcomes and business metrics. And we let AI roll around in that and figuring out So we can stack rank every capital allocation, every tower upgrade we do, every new tower that we put on the network. This that leads for us to a build this year, which is just incredible. As you said, a thousand so far. We're going up to four thousand by the end of the year. And that is even without what we're adding with UScellular. So Yeah. I think it's just gonna be incredible for in terms of coverage. The capacity on the network is just incredible too.

I mean, we are running at about sixty-seven percent of our traffic on 5G at the moment. We have we have all that left in terms of converting spectrum over to 5G. So we have we have so much more room to run.

Mike Sievert: So, Craig, you know, while we don't direct this from a strategy standpoint to be smaller markets in rural areas, to the premise of your question, generally, the algorithm right now is spitting out more rural areas. And so that's where most of this four thousand build is. And by the way, the net incremental keepsights taking us from nine thousand in the UScellular footprint to about twelve thousand, are also principally mostly in smaller markets in rural areas. And so as I mentioned in my remarks, taken together, that's a trans

Craig Moffett: but

Mike Sievert: of towers covering smaller markets in rural areas. And then to your point, you add on the differentiated service of T-Satellite, it's just about taking a network advantage and just stoking it. You know, part of what I believe deeply in business is that you build a great company, not just by addressing the things that aren't working, but figure out what is working and double down on it. So Stoke it. And right now, what's working for T-Mobile US is taking share as the soapy leader in smaller markets in rural areas and we won't stop.

Quan Yao: Thanks, Mike. Thanks. Okay.

Mike Sievert: Thanks, Craig.

Quan Yao: Next question, please.

Operator: And your next question today will come from Jonathan Chaplin with New Street Research. Please go ahead.

Jonathan Chaplin: Okay. Thank you. So

Jonathan Chaplin: Mike, I'm wondering if you can give us an update on how many locations you pass in the MetroNet and MoveMoss markets at the moment and what penetration is on those assets. And then one tiny housekeeping question. I don't think you told us in the past what the cash tax expectation for twenty-six was. So I'm wondering what it is now that you get the one point five billion dollar benefit in twenty-six.

Mike Sievert: Okay. Great. We'll come to Peter for the second one. Let me let me start with Srini because although I don't know if we'll better give you the point estimates, I'd love for you to talk about where this all leads us Srini, in the fiber space, because I think it's really important for people to understand.

Srini Gopalan: Yeah.

Srini Gopalan: So look, the I think the broadband space as a whole is something we're hugely excited by. We're now the fifth largest ISP. We will, as Mike said in his prepared remarks, just this year, add a hundred thousand fiber net adds, mostly in the second half of the year. It's a business as a whole that we like, and it's a combination of FWA, which continues to be a fallow capacity business, as well as investing in fiber where we like the economics. Now you put those together, and we're positioned to be a scaled player in broadband because, you know our number, twelve million FWA, customers.

Now you put that in terms of the equivalent if you were to look at fiber homes past. Right? Let's let's assume a forty percent utilization. That's the equivalent of thirty million fiber homes past. Plus, we've already said on Lumos and MetroNet, we intend to get to twelve to fifteen million households. We're becoming the equivalent of forty to forty-five million homes passed as a broadband player. And that's before we go make other investments As we've said before, we're very open to looking at investments in fiber. They need to be the right investments, and we are and I think we've showed our hand on this, We like pure play fiber assets.

So as a whole, we really like this whole space of broadband. And we think there's a huge opportunity to drive equity value in this space. Mike, I don't know if you wanna add any specifics on MetroNet on MetroNet and Lumos. Right now. Where we are, given that it's day minus one.

Mike Katz: Yeah. We probably can get into the details of MetroNet, but of the things that really attracted us to both companies, and we certainly have seen this with Lumos, is the these companies are the best in the country at building greenfield fiber. And there's still a lot of places left to cover in this country where you can be first to market to fiber. And what we've seen so far from Lumos is they continue to be very successful at that, and we're very optimistic at we'll continue to see that with Metro after we close tomorrow.

Mike Sievert: And during the pendency of the transaction, MetroNet also outperformed their deal expectations in terms of what they would build. So we're arriving with a better penetration than we had hoped for when we first signed the deal. So we'll update you on actual build expectations after we actually own the assets Jonathan. But we're we're hopefully, you can tell we're excited about the space.

Peter Osvaldik: And let me on the last question, I'm gonna have to estimate for twenty-six and primarily because, obviously, there's a lot of other factor stuff update in there including UScellular closing and all the purchase accounting around that, the timing of the close of the eight hundred megahertz transaction. So for now, I'm gonna resist it, but there'll definitely be a time to give a more comprehensive twenty-six of them. But the OBB

Mike Sievert: B versus the not OBBB is a one point five billion dollar benefit. Yeah. And it's great to see that coming in. Terrific. Okay. Thanks, Jonathan.

Quan Yao: Operator, next question, please.

Operator: And your next question today will come from Gregory Williams with TD

Gregory Williams: Cowen.

Gregory Williams: Cowen.

Operator: Great. Thanks for taking my questions.

Gregory Williams: First one's on your rural market share.

Gregory Williams: A few years back on your analyst day, you noted a goal of reaching twenty percent, I believe, of the smaller markets. I think it was right around by twenty-five. And here we are in twenty-five. I'm curious what your market share is now and if it's reached that twenty percent, where it could go? And if UScellular changes that calculus as well. Second question is just on the billion and a half benefit from the top the tax release bill. You said you'd deploy the capital thoughtfully. I was wondering if you can add more color to those words thoughtfully whether we think about M&A buybacks or network investment. Thanks.

Mike Sievert: Okay. We'll start with Jon. Smaller markets in rural areas, how are we doing? I'm gonna try to, like, contain my enthusiasm for this question, Greg. It really

Jon Freier: appreciate the question. First, we're unbelievably excited about smaller

Jon Freier: markets, rural areas. Just for know, the first time listeners here, the way we define this is outside everything outside of our top one hundred markets. So this would be a hundred and forty million people, fifty million households,

Jon Freier: roughly forty percent of the US. And we're excited about it for two reasons. Number one, we have surpassed twenty percent share of households in smaller markets. Markets rural areas, so we have beat that goal that we set for you in two thousand and twenty-five We're really excited about that. This is our ninth consecutive quarter where we have been the leader in postpaid switching. And so we've been on a tear on this for a little bit more than a couple of years now. We're really excited about that.

But the thing that excites us more is exactly to the premise of your question, is what the opportunity still is in smaller markets, rural areas with the addition of UScellular and all the assets, the complementary spectrum, the sell side assets, etcetera, that we will be implementing into our network and the thousands of greenfield sites that are coming into the network as well. And so, you know, we have this huge opportunity still. Like, we're doing all sorts of things as you would expect in terms of network investment, distribution investment, community investment. We just kicked off Friday night 5G lights for the second year in a row in smaller rural areas.

We're having a lot of fun with that as well. And they have a so much more tailwind that we expect into this business. And I don't think anybody ever thought that we would hit twenty percent and pack up our tent and go back home to New York City. We're gonna stay in here

Peter Osvaldik: and continue to drive this business to, you know, our fair share of the market.

Jon Freier: Maybe even outside fair share of the market. So we'll have more to say after we close the UScellular transaction and give you a little bit more of an update in terms of what we're up to, but we're incredibly excited about our progress so far and even more progress to come.

Mike Sievert: You're asking the million dollar or a billion dollar question, Greg, which is where could it all go? And I, you know, I'd love to be able to answer that for you today. And, it's something we think a lot about. We don't know. But I'll tell you this. Our current win share, without even all the advantages that we believe we can build to further accelerate in these areas is way higher than that twenty percent household share. And, you know, it so if nothing improves, you would expect it to normalize over time to a market share way higher.

Now in places we've been successful for a long time, there are places we have market shares way, way higher than our national average. And so it's really about can we deliver the advantages that we think are really gonna be required to be long term, you know, market leaders in smaller markets in rural areas. Will our digital transformation strategy speak particularly well to people that live further away from retail. Will our ongoing improvements in network, including our merger with UScellular, make a step change in our competitiveness?

Will our sat our T-Satellite capabilities, which really only are a differentiator if you fall off our network, will they disproportionately benefit people who live closer to the edge of cellular networks, that is people in rural areas. We don't know the answers to all these. But, theoretically, there are reasons to believe that over the long haul, we could become more successful in this subsegment of the market than we are today in the top one hundred market. So when I use phrases like room to run, I'm serious about it.

Peter Osvaldik: Yeah. And on the benefit again, the one and a half billion dollar question, guess, so to speak is yeah. Again, we're gonna be guided by the thoughtful and very consistent capital allocation methodology. That we have. But let me give you a couple ideas. One is the eight hundred megahertz that I've that I projected for you in prepared remarks. And when that closes, that generates eight hundred fifty million of taxable expense for us. That means about a net two billion dollar benefit incremental to what we laid out at Capital Markets Day. On this one and a half billion.

One of the things we're, of course, looking at as we close UScellular and can, you know, look and deeply assess all the data, Are there opportunities to accelerate? Remember, what we gave you was a billion dollars of synergies on a three to four year time frame with associated cost to achieve about two point two to two point six billion. Is there an opportunity here for us to accelerate some of that from three to four years pull some of that cost to achieve in, and deliver even more value in MPC of those synergies earlier. So those are the kind of things we're investigating now.

But it's not time to, you know, break that twenty-six spread sheet open yet and then send it out my way. And your way. But, please, we'll we'll definitely be thoughtful about it.

Mike Sievert: But it's interesting you give those examples because they follow your long established capital allocation philosophy. Right? Peter's been very clear We peg our leverage at two and a half. That's our current you know, board authorized leverage, and that's where this management team wants to be. That gives us a capital envelope. And within that capital envelope, we invest first in our core business. You just mentioned know, maybe highly accretive opportunities in our core that we could move faster on. Then we invest in smart adjacencies and potential inorganic investment opportunities. And then we return capital to shareholders. And we've been following this philosophy, I think, very successfully for a while.

So you tumble right away to some of these potential things that could allow us to unlock even more value faster for our shareholders. But it's, you know, it's too early to tell. We'll only put the money in them if they're a better idea. Than not. Exactly.

Quan Yao: Thank you, Greg. Operator? Next question, please.

Operator: Your next question today will come from Michael Rollins with Citi. Please go ahead.

Michael Rollins: Thanks, and good afternoon. A couple questions on 5G broadband and FWA. First, just curious what you're seeing, that's driving the ongoing momentum in that volume. Much of that quarterly volume may be benefiting from greater breadth of coverage versus

Michael Rollins: deeper penetration in some of the existing markets. And then secondly, are you seeing evidence that FWA may move from a follow capacity model to one in which you can invest in specific

Michael Rollins: capacity enhancements for additional growth and returns over time.

Mike Sievert: Sounds good. What's moving at most of all Michael, is word-of-mouth. I mean, this is the satisfaction rates of this product are through the roof. People love it. And they're pretty surprised and delighted at the performance. I mean, the average user using, like, five hundred and sixty gigs You know, that's up twenty-five percent from just two years ago. They're they're getting speeds in the two hundred, two hundred and fifty megabits per second national average. That's up fifty percent from two years ago. They love those sort of the flexibility of this product, the elegance and simplicity of it. And they tell everybody when they sign up, because they get this great mainstream product and they save money.

And so that's what's really driving it. I forget the second part. I was talking about Palo Alto. Palo Alto of people.

Srini Gopalan: Yeah. Yeah. You wanna talk you wanna talk a little bit about the strategy there, Srini? Yeah. So the way I think of it is our center of gravity is very much the fallow capacity model. Now we're looking at whether other models work or not, but one of the reasons that's our center of gravity is I think one myth is that to some extent, mobile technology is static. The reality is with each passing day, especially with our 5G SA network, we're finding more and more opportunities to squeeze more out of our existing spectrum, out of our existing towers.

Now there's a lot of work still to be done, but we're constantly challenging every day our twelve million number and looking at how much more we can squeeze from our network in terms of fallow capacity. I mean, just some of the recent examples like the introduction of L4S, which is lower latency. For us. Yeah. Right? Innovations that we're bringing in with 5G SA, are allowing us to squeeze more. Or the work we've done on business FWA. Right, where we're finding newer opportunities to extract more out of our fellow capacity model. So that remains priority one.

Mike Sievert: So it's really interesting. I mean, we you know, we've been pretty clear. We have this twelve million customer target in twenty-eight. It's entirely predicated on the fallow capacity model. And we have our teams hard at work in a dual strategy. Number one, can we get more out of the fellow capacity model through all the tactics that Srini just summarized? And number two, to the very premise of your question, are there smart ways to allocate capital and get a fantastic return? Look, we don't have answers. Either of those two questions, but are our teams thoughtfully working on those things? Absolutely.

Quan Yao: Thank you, Mike. Operator, next question.

Operator: And your next question today will come from Kukun Moral with Evercore ISI.

Kannan Venkateshwar: Great. Thank you. I have one high-level question going back to the twenty-one Analyst Day and for maybe a few years afterwards, part of the narrative was that you were increasingly mindful of T-Mobile US's role

Kannan Venkateshwar: evolving from being an insurgent to more of a steward of the industry. And while you'd continue to push for competitive pressure and execute as a on carrier,

Kannan Venkateshwar: perhaps there'd be a greater consideration of only your leadership position in the space, but also the merits of helping to ensure it remains a profitable

Kannan Venkateshwar: profitable and an attractive one. Maybe fast forward to today, you know, competition isn't new, but the offers in the marketplace keep getting more and more aggressive.

Kannan Venkateshwar: And some of your peers are perhaps acting more and more on carrier like. So with all that context,

Kannan Venkateshwar: can you update us on where you view T-Mobile US as being on the insurgent versus steward spectrum? And I guess ultimately,

Kannan Venkateshwar: how much more runway is there to be as disruptive without the tilts and competitive postures disrupting the balance for the broader industry? Thank you. That's a fantastic question. And if you were listening to Srini a few minutes ago,

Mike Sievert: I think what I take away from your comments, Srini, is that, you know, this is a highly competitive moment in time. Yes. And we like it that way. That's due to the competition that we constantly bring as, you know, the fighter brand, the value brand. And at the same time, one of the things you've noticed about us as the insurgent, as the net share taker, and value leader in this industry is that we have been remarkably consistent in how we've gone about that as the un carrier. You know, one of the things that Peter gets a lot when he's asked about our performances know, why didn't you take more? Could you have taken more?

You know, the this you know, this all-time record Q2 on postpaid phone net additions is great, but why not more? And what we you know, and your answer to that has always been where we thoughtfully keep things in balance. You know, we compete and compete hard and try to break our own records and we bring the competition to this marketplace. But at the same time, we're building a company of lasting value, a profitable company. And, you know, that's a tone that's not new for us. That's years old at this point. You know, to the premise of your question, that's not gonna change. To your to your question of does this strategy have runway, absolutely.

Because it's not about you know, anything other than leveraging long-term durable advantages built on a superior notion of what customers are looking for. They want the best network in this industry. They want it at a great value, they want it from a company that treats them right and loves them. That delivers the best experiences, as Srini was saying. And that's what we deliver uniquely. And we've thoughtfully built long-term durable advantage in these areas and keep going. And so, you know, I've never seen a moment in our history where the strategy we're employing has more room to run than right now, and I think we're demonstrating that as we go.

The last thing I'll say is I take a little exception with one premise of the question just for fun. Which is you know, that it's that we're seeing unprecedented investment in competition from everybody right now. And, look, if you if you add it all up, right now, the financial metrics being delivered in the industry wouldn't support that. You know, T-Mobile US, as the value leader for example, is delivering twenty-six percent conversion of cash against service revenues. That's just a phenomenal number and near the high end our historic business model. We think it's, you know, a tremendous number for us as we continue to progress.

And so that it shows overall, by the way, it's Srini mentioned, cash flows since twenty-two are up fifty percent in our industry. While the customer is experiencing more data at faster speeds than ever before for the same real pricing. That means the customers are huge beneficiaries of the 5G revolution. But so are the competitors. The nature of competition shifting. Are there unprecedented device promote promotions out there? Absolutely. But on the other hand, ARPUs are also higher than they've ever been. And device ownership is longer than it's ever been. So these things offset each other. And one way to look at it is customer lifetime values. Which at T-Mobile US have been remarkably consistent.

I hope that context is helpful.

Kannan Venkateshwar: Very helpful. Thanks, Greg. Great. Thank you for that. Question.

Quan Yao: We'll switch over to social now and take one final question. Question from the phone queue after. But this is from Shaytan Sharma. Congrats on your continued momentum with new services and network features. I was wondering if you could please provide some commentary on the interest demand you see are seeing from enterprises for slicing and T-Satellite. What is the profile of such customers and use cases?

Mike Sievert: Should we go to Callie for that one? Sure thing. Well, I mentioned earlier before in responding to you, Mike, about

Callie Field: T-Priority and just how fantastic it's resonating with first responders in the marketplace. Since we launched in Q1, we're up double digits. In growth in new accounts, which is fantastic. We're also seeing the opportunities in our beta to use T-Satellite with first responders.

Also with state and local municipalities who mean, you think of a bus driver that couldn't get in touch with parents when there was an emergency on the bus, and this really unlocks value for both the public sector as well as in enterprises where we start to see people use cases like oil and gas when they're out doing operations that require connectivity in places that are in that five hundred thousand square miles that are untouched by any carrier. Where businesses actually do operate. So we see a lot of runway and potential in that space in our in our business.

Just to mention in Q2 overall, we think about enterprise, We think about what the capabilities of our network unlock for us. You know, this quarter in Q2, we led the industry in business in postpaid nets, in postpaid phone, in 5G broadband nets, and in postpaid churn. And so it was a really excellent quarter for us to really see the momentum, and we still have plenty of room to run. When I think about 5G SA broadband and the use cases for fixed wireless and enterprise we see national retailers that are coming to us and saying, hey.

A point of sale system slice as well as a fixed wireless solution across the United States is a fantastic use case. So we welcomed like, Casey's General Store as a national retailer that really needed a value provider that also was an incredible experience for those stores. So and I and I'd also just mentioned too, these types of solutions are helping us to deliver win share that is greater than our market share in every single segment. I'll say one more thing. You know, you heard some of our competitors talk about how you know, they were impacted in the government segment with Joge.

And don't think any of us are surprised to hear that because these are the older incumbents that have a majority share. But for us, what drives my business is win share, and our win share is up year over year and quarter over quarter And so we're really able to sit down with decision makers, especially in federal agencies, who are perhaps facing some kind of demand to lower cost or maybe have some headcount demand.

When they do a bill review and they look at the value that our network provides and they look at the best network that they can move to, They're able to come up with efficacy and efficiency as they're sorting through some of the requirements that they have to manage. I just thought Jon was gonna be the most

Mike Katz: most exciting. You know? So, by the way, while we're on Slicing

Mike Sievert: and one thing that I think is interesting is this is a sort of a classic win-win because, you know, our network doesn't really congest, and we're the least congested network out there. We have the most capacity, like, by a wide mile. And so you might think, why slicing? But enterprises, nonetheless, are highly interested in it because what they want is guaranteed service levels. And depending on the criticality of those connections, it's worth paying for so that we can guarantee them in an unanticipated situation where in the future something could cause the network to congest that they would be able to have those service levels for mission-critical connectivity that benefits them.

But also in the case of first responders, benefits us all. Yes. And they're willing to pay for that. So that's really interesting learning. And if you don't mind, on a more serious note, while I'm on it, because we were talking about T-Satellite, I just do wanna acknowledge that it once again played an important role during those horrific floods in Texas. A few a couple of weeks ago. And first of all, I'm so proud of our team on the ground rushing in to help keeping the network going. It performed beautifully. But, also, we were able to transmit emergency messaging to customers, not just T-Mobile US customers, but all customers via satellite that were received.

And, also, on the ground, over a quarter of a million text messages went out over satellite during the most critical moments of this emergency. And people were able to be connected when it mattered. And I'm just so proud of that. And really thankful for our teams on the ground. So I just wanted to shout out to our wonderful team in Texas and say thank you to them.

Quan Yao: Mike. Thanks. Operator, we'll take our final question from the queue.

Operator: And your next question today will come from Kanan Pardaman, Venkateshwar with Barclays. Please go ahead.

Kannan Venkateshwar: Thank you.

Kannan Venkateshwar: Mike, maybe just one question on the

Srini Gopalan: steel ambitions for broadband.

Kannan Venkateshwar: You think about fixed wireless, obviously, all your peers offer it, but when you think about the wireline side of it, your peers have between forty to seventy million kind of build ambitions or, you know, existing scale if you think about the cable companies in that mix. So when you think about your goals of, say, fifteen ish million in wireline why is that enough? And I know you want to end you know, look at more fiber and opportunities, but given your, you know, the scale of your peers, would this call for maybe consideration of some bigger transactions or, you know, bigger opportunities to scale up your network faster. Than you would otherwise. Thank you.

Mike Sievert: Yeah. It's a great question. Maybe Srini and I can kinda take it together. We're we're interested in ongoing transactions, but probably if the premise of your question is something like, are we interested in cable? I become increasingly interested in that over time. You know? I just feel like the growth is in fixed wireless, where there's value and flexibility and the growth is in fiber because it's superior product. And that seems to be where the customer sentiment is going. So we wanna be where, you know, where the puck's gonna be.

I'm so proud of the choices we've made so far, and what's driven us in these choices has been our ability to, one, deliver a fantastic product customers will love, and two, deliver a superior return for our shareholders in doing so. I wanna make sure that we don't chase scale for scale's sake, that we actually chase scale because we can deliver a fantastic return. You know? Because our premise is a little different than some others. Who are on a race regardless of consequences. We're in this business to deliver a great product and make money, superior returns by virtue of our know-how and investments in mobile.

And that's because our premise about how this market is coming together is just a little different. You know, our view is that mobile is the considered sale, and we're gonna add products to that mobile. That makes sense for our customers. And that we can make money on. As Srini explained a minute ago, our already published plans get us to knocking at the door of forty-five million homes past equivalent in wireline language. Through the strategies we've already announced. And, you know, as we've said, we have some ongoing appetite should the right opportunities present themselves at a fair value.

Srini Gopalan: And the only thing I'd add to that, Mike, is also culture. Right, which is we're about great returns, but we're also about challenging an industry for the good of the customer and growth. Right? And that ethos fits very nicely with FWA That fits very nicely with fiber. The last thing we wanna be is be an incumbent. Right? We are all about challenging an industry, about creating value for customers, about smashing problems. And that's a big part of this calculus as much as returns as well.

Mike Sievert: I love that. It's a great place for us to end where I ended in my prepared remarks. This team right here at this T table sees growth opportunities everywhere. And on your behalf, we're gonna be thoughtful, investors in the resources of this company to go chase it and chase it

Quan Yao: Thanks, Mike. All the time we have for questions. Thanks everyone for joining. We're looking forward to connecting with you again soon. If you have any additional questions, you may contact the investor relations or media departments. Thank you.

Kannan Venkateshwar: Thanks, Aldi.

Michael Rollins: Take care.

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