T-Mobile US, Inc. CFO Discusses Growth Strategy and Financial Outlook at JPMorgan Global Technology, Media and Communications Conference

Key Takeaways

TL;DR: T-Mobile (TMUS) reinforces confidence in its LT growth levers incl. postpaid phone/share gains, broadband/FWA leadership, and premium plan momentum (60%+ adoption). Key drivers: durable network/value/customer exp. edge ($6B+ svc rev. growth in 2025E, +50% FCF growth industry-wide 2022-2024), upside from UScellular/rural expansion, T-Satellite differentiation, and strategic adjacencies (advertising, fiber JVs). Capital allocation to prioritize $50B shareholder returns (2025-2027).

1. Subscriber Growth & Competitive Positioning:

• 2025 postpaid guidance: Highest ever postpaid phone net adds (upbeat vs. 2024’s “best growth year” w/ record Q1 gross adds). Q2 trending ahead w/ gross adds up YoY in Apr/May.
• Churn dynamics: Q1 churn increase (still lowest vs. peers) mainly tied to rate plan optimizations (impact to fade post-Q2). Prepaid-to-postpaid migration set to normalize in Q2.
• Growth vectors:
  • Rural/SMB focus: UScellular deal (pending) to aid penetration in underpenetrated markets (40% U.S. pop), aligns w/ incremental macro site builds in 2025.
  • Enterprise/gov’t growth (best-ever Q1), driven by network edge (T-Priority for first responders; NYC contract).

2. Value Proposition/Pricing Power:

• New plan tiers (Experience More, Beyond): 5-year price lock enhances stickiness, drives ARPA/ARPU (1.5% guide). Top-tier plans (60% mix) include T-Satellite (free in premium tiers; $10/month otherwise) – positioned as “towers in space” w/ life-saving use cases (1M+ beta texts).
• Broadband/FWA: Lowest-ever churn (Q1) + record ARPU growth. 12M subs target by 2028 (400k+/quarter net adds). Speeds up 50% YoY, driving satisfaction.

3. Network Expansion & Fiber JVs:

• Fiber partnerships: Lumos (3.5M passings by 2028) and Metronet (6.5M by 2030) to scale via 70k/month peak builds. Focus on “pure-play” fiber M&A.
• 5G FWA speeds: 50% YoY improvement reinforces broadband TAM capture.

4. Financials & Capital Allocation:

• Raised 2025 guidance: Svc rev. up ~6% YoY (half from Vistar/Blis M&A), core EBITDA +$75M from deals.
• FCF conversion: Key differentiator (highest in industry).
• Capital priorities (2025–2027):
  • $10B for M&A (UScellular, adjacencies), $50B shareholder returns (buybacks/dividends), $20B strategic buffer.

5. Adjacencies & Digitalization: