T-Mobile CEO Mike Sievert Talks 'Monster Q4'

Published Jan 29, 2025, 5:09 PM

T-Mobile CEO/President Mike Sievert speaks on the company's quarterly earnings results, 2025 growth outlook, state of the company's wireless business, 5G network growth, Starlink partnership, and more. He spoke with Bloomberg's Paul Sweeney and John Tucker. 

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It is Earning's day here. It's another big earnings day is in addition to being a fed day. One of the compans reporting Earning studay was Tea Mobile put out some really good numbers, stock up eight and a half percent on the news. Mike Shaver joins us. He's the CEO of T Mobile. He joins us here in our Bloomberg and Directive Broker studio. Mike, thanks so much for coming here. Thanks for having me.

Guys.

What does the market like about the results you put up today?

Well, look, we're just consistently outperforming expectations, and that's what the market looks for in a business like ours. We're taking share, we're growing, and then across the board we beat expectations. We just finished the strongest growth here ever in our history. And that's saying something because we have a story to growth history in this company and a lot of people wonder is the big growth you know, run behind us, and we just demonstrated yet again. No, it's not.

It's hard for me to get really excited about my mobile service provider, but your customers it's like they were in a cult. What's the secret sauce. That's my softball question.

You know, our value, our corporate values start with this basic idea, love our customers, you know, give them more, ask less of them, and they notice. That's just a huge part of our brand. And we have this thing we do called T Mobile Tuesdays where every week customers come to our Tea Life app which has fifty million users, and they engage to find out how are we rewarding them this week? Do you know what this week's was? We gave away a Shack Burger, like the world's best burger for free to every single Team Mobile.

Reflix to you.

Absolutely so, Mike, this is you're in a competitive business. I think about the wireless business, the barriers to change are pretty minimal. Churn is always an issue. Your competitors are depocketed, they're good competitors. Is it just you guys switching customers all the time just for deals. Talks about the churn for your company.

Your business well churns out historic lows across the industry, not just T Mobile. We just had our churn year. Ever, so people aren't switching a lot when they are switching the net share takers T Mobile. So this is a great trend. You know, I don't need for others to fail in order for us to succeed in our business. This is a great neighborhood. We just happen to be the best house in the neighborhood, and so we're out growing everyone. But this is a healthy, vibrant sector. Everyone's you know, growing and making money. I think that's great. Part of it is people can't get enough of the service that we all offer at T Mobile. You know, we just guide it again to a big year of revenue gains per customer. And that's not because of pricing. It's because customers are self selecting up our rate card to our higher priced offers because they see the superior value and they want what we have to sell. That's a great dynamic, not just for T Mobile, but for the industry.

The growth strategy is organic or M and A or what.

It's organic principally, I mean, we do have a number of M and A deals in the pipeline that we're intending to close this year, centered around fiber, centered around you know, other add ons. We're also in you know, acquiring a cellular company, US Cellular. So but by far, the growth is an organic growth story focused on taking share, adding revenues, deepening relationships with the existing customers that now number well past one hundred million.

Of those I don't understand, like outdoor advertising, What does that have to do with your business.

Yeah, we just announced the acquisition of a company called Vistar, and you know we are in We're a billion dollar advertising support company already, so it's a significant business for us. We call it marketing services for marketers buy marketers. T Mobile is a very famous marketer, and marketers want services from us, so we provide that already. But our Tea Life app. Part of what it does is it asks customers buy the millions, whether they would like to opt in. Opt in to make their digital life better and their advertising more relevant. And then we can use data to provide marketers with an ability to put advertising in front of customers that they will actually appreciate. And our dream with places based marketing outdoor marketing, that's the Vista acquisition, is to do that for the first time ever in outdoor advertising, so that for the first time outdoor advertising, place based advertising can become an addressable market.

Yeah, it's interesting. I love the outdoor business. You can't switch channels on that. I took all those companies public back in the day. Apple, Mark German Bloomberg News. Apple has been working with SpaceX and Tea.

Mobile on starlink. What is starlink?

Okay, So this is the ability to connect your mobile phone directly to satellite service. This is a huge breakthrough. We announced our intention to partner with SpaceX over two years ago, and now finally it's coming to market with opening of our beta a couple of weeks ago. We're bringing on thousands of users and soon way more than that. We're going to throw the doors open on this thing. If you can see the sky, you're connected.

That's our visuals the iPhone app. That's correct.

These are lower th orbit satellites, so they're easier for your phone to find and vice versa. But this country, you guys, has five hundred thousand square miles uncovered by any cellular network and it's a massive part of our land mass and we're about to close that coverage.

Okay, So if I uh on my bucket list is a trip to the South Pole, I don't need cellular service down there. I could just use a T mobile iPhone starling.

Well, I'm gonna have to check on how good the L EO coverage is. But one of the things you point out and very quickly to follow our terrestrial coverage across the continental US and big parts of Alaska is the world's oceans. That's a big piece of this because you know now you'll be able to not right away, but as soon as we are able to turn it on, you'll be able to get your service across the US and as you travel around the oceans outside the reach of any cellular site.

It's in beta testing right now. It's just confined to messaging.

Hundreds of satellites are in the air where we have a free beta service going on. We're starting to let people into it. Right now it's text messaging only, but fast to follow will be light data services and eventually.

Voice so I can get rid of my satellite phone. We don't need that anymore.

I think the time will come when that's the case.

Top line growth four to five percent for you guys, That's how I think about the wireless business. Is that all pricing? If so, how do you think about the pricing environment.

It's sharetaking and self selecting up our rate card. You know very little pricing, and so those are the big dynamics. Postpaid service revenue growth eight percent, more than double the rate of our peers. And so this is, you know, a dynamic that makes T Mobiles so different in this space because we're not only growing the top line, but we're translating it into financial growth on the bottom line twenty five percent year over year growth and cash flows seventeen billion dollars, our highest ever.

Now, how do you raise prices? You sort of touched on this briefly before, but how do you raise prices without scaring away your cult members?

Cult members? Well, one thing is people. You know, we have a rate card with a variety of options, and people choose at an increasing rate the prices that are higher up because they want what we have to sell. Do you know that sixty percent of our new customers coming in the front door choose one of our two most premium plans because those are the ones that are most packed with value. And they know they're here for a reason. They want more data, they want the experience that T Mobile can provide with the world's best five G network.

Subscriber acquisition costs, how are they trending for you, guys?

These days, they're pretty flat and that's good. We're very comfortable with this business model. It's a high CLV you know, value exchange. One of the things about this business it's reliable, it's predictable. We do what we say, we try to exceed what we say, and it's growing and that's one of the things that really distinguishes us in a group of peers, not just in the US, but around the world.

There is a FED meeting today. Can you tell me how if it all rates affect your business.

Well, we're a big debt issuer, so obviously it's relevant in the long haul.

What's the debt right now?

With two point five leverage against EBITDA, so it's you know, it's very significant eb as in the thirty one, you know, very significant debt. But it's also a stack that's you know, investment grade, it's long term, it's you know, spread out, so it doesn't affect us in an immediate way, but in the long taul of course, as a debt would you like that leverage ratio to be right where it is?

Okay, market structure in the wireless business three main players?

Okay, is there room for fourth?

And I think about my old friend Charlie Oregon, I have for the last fifteen years. I had no idea what he's doing with a spectrum, and I don't think the market knows either.

Well, he's operating, you know, a major brand and Boost Mobile. And the other thing is the cable companies Charter and Comcast taken together, who don't overlap, kind of constitute an additional carrier as well. And you know, they are really growing their mobile service at a significant pace, not as significant as us. We're the growth leaders, but it's you know, it shows that this is a vibrant market with a lot of competition.

In the smaller markets. That's a big deal for you too, right.

Yeah, forty percent of the country everything that's not the top one hundred markets we call smaller markets in rural areas. It's a huge source of our growth right now.

And so on a revenue per user, how do you guys stack up to your peers.

They're both above us, okay, you know, and it shows that there's room to run for us, because you know, we came from a place that is much more value oriented. We're never going to give up those value roots. I mean, the lower prices and better deal is a big part of who we are. But at the same time, last year we addressed some very outdated rate plans that just don't make sense anymore after a decade, and there's more opportunity like that as well, as long as we're true to who we are, which is a great value. It's the biggest.

Challenge to face going forward right now.

Well, it's demonstrating to people that this is not just a present growth story, that it has legs. And that's a big piece of what I spend my time on is making sure that you know out in twenty six, twenty seven, twenty eight that this growth keeps right on rolling in and you see that in our organic strategies but also some of the inorganic things we've talked about.

All right, Mike, thanks for coming in. Really appreciate it. Mike Sievert, he is the CEO of T Mobile.

Again.

The company just reported earnings today beat earnings on the top line and the ibitha line, which is where Michaels seeing a lot of these investors look and right now we got to stock up about eight and a half percent, So a good day for Timo

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