Speaker 1: Bloomberg Audio Studios, Podcasts, radio news.
Speaker 2: It is Earning's day here. It's another big earnings day
Speaker 2: is in addition to being a fed day. One of
Speaker 2: the compans reporting Earning studay was Tea Mobile put out
Speaker 2: some really good numbers, stock up eight and a half
Speaker 2: percent on the news. Mike Shaver joins us. He's the
Speaker 2: CEO of T Mobile. He joins us here in our
Speaker 2: Bloomberg and Directive Broker studio. Mike, thanks so much for
Speaker 2: coming here. Thanks for having me.
Speaker 3: Guys.
Speaker 2: What does the market like about the results you put
Speaker 2: up today?
Speaker 3: Well, look, we're just consistently outperforming expectations, and that's what
Speaker 3: the market looks for in a business like ours. We're
Speaker 3: taking share, we're growing, and then across the board we
Speaker 3: beat expectations. We just finished the strongest growth here ever
Speaker 3: in our history. And that's saying something because we have
Speaker 3: a story to growth history in this company and a lot
Speaker 3: of people wonder is the big growth you know, run
Speaker 3: behind us, and we just demonstrated yet again. No, it's not.
Speaker 1: It's hard for me to get really excited about my
Speaker 1: mobile service provider, but your customers it's like they were
Speaker 1: in a cult. What's the secret sauce. That's my softball question.
Speaker 3: You know, our value, our corporate values start with this
Speaker 3: basic idea, love our customers, you know, give them more,
Speaker 3: ask less of them, and they notice. That's just a
Speaker 3: huge part of our brand. And we have this thing
Speaker 3: we do called T Mobile Tuesdays where every week customers
Speaker 3: come to our Tea Life app which has fifty million users,
Speaker 3: and they engage to find out how are we rewarding
Speaker 3: them this week? Do you know what this week's was?
Speaker 3: We gave away a Shack Burger, like the world's best
Speaker 3: burger for free to every single Team Mobile.
Speaker 1: Reflix to you.
Speaker 2: Absolutely so, Mike, this is you're in a competitive business.
Speaker 2: I think about the wireless business, the barriers to change
Speaker 2: are pretty minimal. Churn is always an issue. Your competitors
Speaker 2: are depocketed, they're good competitors. Is it just you guys
Speaker 2: switching customers all the time just for deals. Talks about
Speaker 2: the churn for your company.
Speaker 3: Your business well churns out historic lows across the industry,
Speaker 3: not just T Mobile. We just had our churn year. Ever,
Speaker 3: so people aren't switching a lot when they are switching
Speaker 3: the net share takers T Mobile. So this is a
Speaker 3: great trend. You know, I don't need for others to
Speaker 3: fail in order for us to succeed in our business.
Speaker 3: This is a great neighborhood. We just happen to be
Speaker 3: the best house in the neighborhood, and so we're out
Speaker 3: growing everyone. But this is a healthy, vibrant sector. Everyone's
Speaker 3: you know, growing and making money. I think that's great.
Speaker 3: Part of it is people can't get enough of the
Speaker 3: service that we all offer at T Mobile. You know,
Speaker 3: we just guide it again to a big year of
Speaker 3: revenue gains per customer. And that's not because of pricing.
Speaker 3: It's because customers are self selecting up our rate card
Speaker 3: to our higher priced offers because they see the superior
Speaker 3: value and they want what we have to sell. That's
Speaker 3: a great dynamic, not just for T Mobile, but for
Speaker 3: the industry.
Speaker 1: The growth strategy is organic or M and A or what.
Speaker 3: It's organic principally, I mean, we do have a number
Speaker 3: of M and A deals in the pipeline that we're
Speaker 3: intending to close this year, centered around fiber, centered around
Speaker 3: you know, other add ons. We're also in you know,
Speaker 3: acquiring a cellular company, US Cellular. So but by far,
Speaker 3: the growth is an organic growth story focused on taking share,
Speaker 3: adding revenues, deepening relationships with the existing customers that now
Speaker 3: number well past one hundred million.
Speaker 1: Of those I don't understand, like outdoor advertising, What does
Speaker 1: that have to do with your business.
Speaker 3: Yeah, we just announced the acquisition of a company called Vistar,
Speaker 3: and you know we are in We're a billion dollar
Speaker 3: advertising support company already, so it's a significant business for us.
Speaker 3: We call it marketing services for marketers buy marketers. T
Speaker 3: Mobile is a very famous marketer, and marketers want services
Speaker 3: from us, so we provide that already. But our Tea
Speaker 3: Life app. Part of what it does is it asks
Speaker 3: customers buy the millions, whether they would like to opt in.
Speaker 3: Opt in to make their digital life better and their
Speaker 3: advertising more relevant. And then we can use data to
Speaker 3: provide marketers with an ability to put advertising in front
Speaker 3: of customers that they will actually appreciate. And our dream
Speaker 3: with places based marketing outdoor marketing, that's the Vista acquisition,
Speaker 3: is to do that for the first time ever in
Speaker 3: outdoor advertising, so that for the first time outdoor advertising,
Speaker 3: place based advertising can become an addressable market.
Speaker 4: Yeah, it's interesting. I love the outdoor business. You can't
Speaker 4: switch channels on that. I took all those companies public
Speaker 4: back in the day. Apple, Mark German Bloomberg News. Apple
Speaker 4: has been working with SpaceX and Tea.
Speaker 1: Mobile on starlink. What is starlink?
Speaker 3: Okay, So this is the ability to connect your mobile
Speaker 3: phone directly to satellite service. This is a huge breakthrough.
Speaker 3: We announced our intention to partner with SpaceX over two
Speaker 3: years ago, and now finally it's coming to market with
Speaker 3: opening of our beta a couple of weeks ago. We're
Speaker 3: bringing on thousands of users and soon way more than that.
Speaker 3: We're going to throw the doors open on this thing.
Speaker 3: If you can see the sky, you're connected.
Speaker 1: That's our visuals the iPhone app. That's correct.
Speaker 3: These are lower th orbit satellites, so they're easier for
Speaker 3: your phone to find and vice versa. But this country,
Speaker 3: you guys, has five hundred thousand square miles uncovered by
Speaker 3: any cellular network and it's a massive part of our
Speaker 3: land mass and we're about to close that coverage.
Speaker 1: Okay, So if I uh on my bucket list is
Speaker 1: a trip to the South Pole, I don't need cellular
Speaker 1: service down there. I could just use a T mobile
Speaker 1: iPhone starling.
Speaker 3: Well, I'm gonna have to check on how good the
Speaker 3: L EO coverage is. But one of the things you
Speaker 3: point out and very quickly to follow our terrestrial coverage
Speaker 3: across the continental US and big parts of Alaska is
Speaker 3: the world's oceans. That's a big piece of this because
Speaker 3: you know now you'll be able to not right away,
Speaker 3: but as soon as we are able to turn it on,
Speaker 3: you'll be able to get your service across the US
Speaker 3: and as you travel around the oceans outside the reach
Speaker 3: of any cellular site.
Speaker 1: It's in beta testing right now. It's just confined to messaging.
Speaker 3: Hundreds of satellites are in the air where we have
Speaker 3: a free beta service going on. We're starting to let
Speaker 3: people into it. Right now it's text messaging only, but
Speaker 3: fast to follow will be light data services and eventually.
Speaker 1: Voice so I can get rid of my satellite phone.
Speaker 1: We don't need that anymore.
Speaker 3: I think the time will come when that's the case.
Speaker 2: Top line growth four to five percent for you guys,
Speaker 2: That's how I think about the wireless business. Is that
Speaker 2: all pricing? If so, how do you think about the
Speaker 2: pricing environment.
Speaker 3: It's sharetaking and self selecting up our rate card. You
Speaker 3: know very little pricing, and so those are the big dynamics.
Speaker 3: Postpaid service revenue growth eight percent, more than double the
Speaker 3: rate of our peers. And so this is, you know,
Speaker 3: a dynamic that makes T Mobiles so different in this
Speaker 3: space because we're not only growing the top line, but
Speaker 3: we're translating it into financial growth on the bottom line
Speaker 3: twenty five percent year over year growth and cash flows
Speaker 3: seventeen billion dollars, our highest ever.
Speaker 1: Now, how do you raise prices? You sort of touched
Speaker 1: on this briefly before, but how do you raise prices
Speaker 1: without scaring away your cult members?
Speaker 3: Cult members? Well, one thing is people. You know, we
Speaker 3: have a rate card with a variety of options, and
Speaker 3: people choose at an increasing rate the prices that are
Speaker 3: higher up because they want what we have to sell.
Speaker 3: Do you know that sixty percent of our new customers
Speaker 3: coming in the front door choose one of our two
Speaker 3: most premium plans because those are the ones that are
Speaker 3: most packed with value. And they know they're here for
Speaker 3: a reason. They want more data, they want the experience
Speaker 3: that T Mobile can provide with the world's best five
Speaker 3: G network.
Speaker 2: Subscriber acquisition costs, how are they trending for you, guys?
Speaker 3: These days, they're pretty flat and that's good. We're very
Speaker 3: comfortable with this business model. It's a high CLV you know,
Speaker 3: value exchange. One of the things about this business it's reliable,
Speaker 3: it's predictable. We do what we say, we try to
Speaker 3: exceed what we say, and it's growing and that's one
Speaker 3: of the things that really distinguishes us in a group
Speaker 3: of peers, not just in the US, but around the world.
Speaker 1: There is a FED meeting today. Can you tell me
Speaker 1: how if it all rates affect your business.
Speaker 3: Well, we're a big debt issuer, so obviously it's relevant
Speaker 3: in the long haul.
Speaker 1: What's the debt right now?
Speaker 3: With two point five leverage against EBITDA, so it's you know,
Speaker 3: it's very significant eb as in the thirty one, you know,
Speaker 3: very significant debt. But it's also a stack that's you know,
Speaker 3: investment grade, it's long term, it's you know, spread out,
Speaker 3: so it doesn't affect us in an immediate way, but
Speaker 3: in the long taul of course, as a debt would
Speaker 3: you like that leverage ratio to be right where it is?
Speaker 2: Okay, market structure in the wireless business three main players?
Speaker 4: Okay, is there room for fourth?
Speaker 2: And I think about my old friend Charlie Oregon, I
Speaker 2: have for the last fifteen years. I had no idea
Speaker 2: what he's doing with a spectrum, and I don't think
Speaker 2: the market knows either.
Speaker 3: Well, he's operating, you know, a major brand and Boost Mobile.
Speaker 3: And the other thing is the cable companies Charter and
Speaker 3: Comcast taken together, who don't overlap, kind of constitute an
Speaker 3: additional carrier as well. And you know, they are really
Speaker 3: growing their mobile service at a significant pace, not as
Speaker 3: significant as us. We're the growth leaders, but it's you know,
Speaker 3: it shows that this is a vibrant market with a
Speaker 3: lot of competition.
Speaker 1: In the smaller markets. That's a big deal for you too, right.
Speaker 3: Yeah, forty percent of the country everything that's not the
Speaker 3: top one hundred markets we call smaller markets in rural areas.
Speaker 3: It's a huge source of our growth right now.
Speaker 2: And so on a revenue per user, how do you
Speaker 2: guys stack up to your peers.
Speaker 3: They're both above us, okay, you know, and it shows
Speaker 3: that there's room to run for us, because you know,
Speaker 3: we came from a place that is much more value oriented.
Speaker 3: We're never going to give up those value roots. I mean,
Speaker 3: the lower prices and better deal is a big part
Speaker 3: of who we are. But at the same time, last
Speaker 3: year we addressed some very outdated rate plans that just
Speaker 3: don't make sense anymore after a decade, and there's more
Speaker 3: opportunity like that as well, as long as we're true
Speaker 3: to who we are, which is a great value. It's
Speaker 3: the biggest.
Speaker 2: Challenge to face going forward right now.
Speaker 3: Well, it's demonstrating to people that this is not just
Speaker 3: a present growth story, that it has legs. And that's
Speaker 3: a big piece of what I spend my time on
Speaker 3: is making sure that you know out in twenty six,
Speaker 3: twenty seven, twenty eight that this growth keeps right on
Speaker 3: rolling in and you see that in our organic strategies
Speaker 3: but also some of the inorganic things we've talked about.
Speaker 2: All right, Mike, thanks for coming in. Really appreciate it.
Speaker 2: Mike Sievert, he is the CEO of T Mobile.
Speaker 4: Again.
Speaker 2: The company just reported earnings today beat earnings on the
Speaker 2: top line and the ibitha line, which is where Michaels
Speaker 2: seeing a lot of these investors look and right now
Speaker 2: we got to stock up about eight and a half percent,
Speaker 2: So a good day for Timo