Hello, everybody. Benjamin Swinburne, Morgan Stanley's Telecom and Media Analyst. For important disclosures, please see the Morgan Stanley Research Disclosure website at morganstanley.com/researchdisclosures. Excited to welcome back to the conference, but for the first time up on stage, the CEO of T-Mobile, Srini Gopalan. Srini, thank you so much for coming. Thanks for having me here, Ben. Before we get started, I'm supposed to draw our attention to that safe harbor statement, which I think has disappeared now. Yeah. There it is. Okay. Keep that in mind, especially the forward-looking statements. All right, we'll do that. I think we're basically, what, just over four months into your tenure as CEO. Yeah. Business is obviously performing well. Maybe talk a little bit about your strategic priorities for the company. What are you and the team really focused on right now at T-Mobile? Look, where we are today, we're a great business, and the foundation of that has been differentiation. That's most visible when you look at our NPS, right? Our NPS is 20-25% higher than anyone in the industry. The source of that differentiation and the foundation we're building on is the fact that we have the best network, which hasn't always been true, but is today. Mm-hmm. The best value and the best experience. That fundamentally is our differentiation. When customers come to us, they don't need to make a trade-off, right? They get all three. We're sort of breaking the laws of physics in this industry that if you get the best network, you have to pay more for it. If you get the best value, you get network and experience that sucks. That's no longer true. You can get all three in the same place. That's the foundation we're building from. If you talk about kind of what is, what is my focus, it's really widening that gap, widening that differentiation, because that by itself creates unparalleled growth, which then tumbles down to financials. If you talk about kind of, you know, how do we widen that differentiation, the stuff I spend most of my time thinking about. Yeah. On the network side, we're clearly the 5G leaders. We won't stop there. We're pushing ahead. 6G, we will be the leaders. We will stay three to four years ahead of the rest of the industry in innovation and what we bring to the network. On value, we will continue to zealously guard our value position. Mm-hmm. That's a value position which is not just about kind of the cheapest, freest phone, but that's value every day of your life, right? On the experience side, historically, our experience has been driven by incredible people and an incredible culture and a willingness to kind of lean in and actually solve customer pain points. We now have the ability to complement that with the best tech, and we demoed some of that with stuff like Live Translate, but it's also the progress we've made on our digital transformation. All of that together, best network, best value, best experience, and widening that gap creates enormous growth opportunity, whether that's in wireless with network seekers, with SMRA, whether that's in broadband with the incredible performance we're seeing with fixed wireless and also fiber, or whether that's in the enterprise segment of wireless. We haven't even begun talking about stuff like financial services, physical, edge AI, and the opportunities that opens out. It's double down on widening differentiation, which in turn gives us unparalleled growth. Remember, we don't have legacy businesses that we need to hide under the carpet, right? This is a pure growth business, and that then tumbles into exceptional financials. That's what I'm spending my time on. Let's talk about the financials. I guess it was, what, October of 2024, I think you guys laid out, you know, sort of a longer-term growth plan. Last month, you gave us a halftime check-in, I think you called it. Yeah Since you're a big football fan. I know, as we heard. Seahawks. Congrats. How is the business progressing against those original plans, especially in the context of an industry that people, you know, are worried is getting more competitive? Absolutely. When we did the update, we talked about the fact that our service revenue is kind of growing four times as much as our competitors. Our EBITDA is growing two times as fast, and the business continues to perform really well. Q1, where it's performing exactly like we thought we would, from a volume perspective. Seasonally, you should expect our Q1 performance to be pretty much in line with what you've seen in the last couple of years. When we talk about the industry, I think sometimes we tend to get over-focused on promotions and what's happening on the latest promotion, the rest of it. There's a direction of flow of the water, and that's heading towards us. Yeah. Fundamentally because if you're a consumer, right, you don't get best network, best value, best experience. I'm gonna repeat this a few times today. It's okay. Hopefully, it's consistency rather than repetition. You don't get all those three in the same place. There's a natural choice if you're looking to switch provider, and they come to us. You guys also, for us, Excel jockeys out there, made some pretty meaningful changes to your plan changes to your KPIs, taking away a lot of the metrics we've enjoyed modeling for years and years in the business, shifting really to postpaid accounts. Why make that change? What is sort of what are you trying to accomplish in terms of refocusing the market on postpaid accounts? Way I think of it, we've actually raised the bar on disclosure, because what you want from us as investors and people who care about our company is that we spend time on things that matter to customers and things that matter to investors. If you look at customers, firstly, customers in this market buy accounts rather than lines. 90% of our postpaid customers belong in a multi-line account. That's how customers shop. They buy accounts, right? When you look at investors, look, the really important question is what is your share of the CLV that's coming onto the market? That's ultimately the big question. The closest proxy to CLV is accounts. The thing that drives CLV is accounts. That's why we think we're raising the bar, because I mean, I know there are more lines to model if you had lines and all those details in it. The reality is what you should care about is CLV, and that comes from accounts. You look at Q4, right? We did 261,000 accounts, 962,000 lines. One of our competitors did 616,000 accounts and 26,000 lines. That's a 10-to-1 ratio on accounts, right? That tells you where the value is being created. All right, well, let's stick with accounts. You also talked about growing ARPA or. Yep. Revenue per account this year, 2.5%-3%. Can you sort of unpack the drivers of that when a lot of your competitors are not talking about? Yeah. Growth in ARPU, ARPA? I think there's three fundamental drivers, right? One is really structural, which is part of our best value position, which is really important in an annuity business, is the value at which we bring in new customers is higher than our base. We bring in new customers when we add new accounts, right? They're accretive to ARPA, right? That by itself, just the math of that drives ARPA growth. That's part of what I mean by zealously guarding this best value position. Mm. When you have the lowest front book and the lowest back book, then when you bring in accounts, it becomes accretive. That's math. The more premium plan loading, and you've seen our premium plan loading, twice what it is in the base on new customers. The more premium plan loading you have, that flows through to the base. The second thing is when you've got an NPS, which is about 45 today, which is 20% higher than anyone else, then relationships grow as well, whether that's fixed wireless access, whether that's financial services, whether it's adding a laptop and a watch, to the relationship. That's why I obsess so much about NPS. That's the second source of ARPA growth. The third and smallest is from time to time, we will look at some of our legacy rate plans, account plans. Mm-hmm. Thoughtfully do optimization around that. Those three together is what tumbles into the 2.5%-3% ARPA growth. Okay. We'll go into a little more detail on some of the top line drivers, but I wanted to ask you first about digitization, something you've talked about for a while, and tie it back to a $3 billion efficiency target that you guys have laid out, I think run rate by 27, if I have that right. Where are you finding the opportunity within the digitization portfolio, and especially when you think about bringing AI into the? Yeah. Into the cost base? Like a lot of things at T-Mobile, we've thought about digitization and AI slightly differently from gonna shave off this much cost. Yeah. Right? 'Cause our going-in position is if we fix a customer's problem, they will be happier, higher NPS customers who will then happen to call us less about stuff. 'Cause nobody calls a care center to have a conversation. You get the occasional weirdo who does, but most of our customers call because they have a real problem. There's a problem we've created. Some of the, you know, some of the craziness of the way businesses get managed sometimes is you create a problem and then pay agents based on how little time they take to solve the problem. Right. Now we're different. We start with actually solving the problem. Digital and AI for us, the way we've thought about it, is reimagine the experience to create a frictionless process that will automatically flow into costs. When you think about. That's why we've taken our time to say we'll build the capabilities, we'll drive customer adoption, and now we're talking of the benefits. Because this question you guys have asked us from 2023 onwards, right? Yeah. We've kept saying we're building the capability, we're now driving adoption, and the cost will tumble down. We're seeing that happen now, which means, you know, in the next two years, we will add $10 billion in service revenue. $7 billion of that will flow through to EBITDA. Yeah. There's four big places where AI and digital really help us from a experience and cost perspective. The first is T-Life. Mm-hmm. T-Life, our flagship app. We've got 34 million families and businesses who we have a relationship with. 24 million of them use the app at least four times a month, right? That's a really. Yeah Sticky relationship. T-Life is the center of a lot of our work. Right now upgrades, which was one of the most frequent transaction in store, 73% of our upgrades are done through T-Life, 39% are done with no person involved. Now, as you think about add a line, the fact that we launched an easy switch, which allows new customers to come in using T-Life, all of that is flowing through in terms of efficiency and kind of frictionless process. The second big place is Intent CX, which is our AI-based model, which we use to interact with customers. Everything from when you call a care center, the agent gets a whisper in their ear on what you're likely calling about, to when you finish the call, the wrap-up and the documentation is done through AI. We said we wanted to take out 75% of our calls at our Capital Markets Day. We've already taken out 50%. Mm. We're making enormous progress there. The third big bit is customer-driven coverage, which is our AI-based network model, which looks to build the best network, not based on some ego stack of how many pops you're covering, but based on where customers live, work, and play. That's driving enormous efficiency into our network build. Last but not least, what we're doing with IT. No code, low code, what we're doing with kind of factoring legacy code and legacy platforms. All of those four are big, all of them help drive that $3 billion efficiency. That's helpful. Thank you. Why don't we talk a little bit more about the industry and the opportunity to continue to grow volumes in particular. You've talked about top 100 and your SMRA markets. When you think about the opportunity in those today, Srini, how would you size those up and talk about your strategy to penetrate both those kinds of markets? Think of them as. Let's talk about two different things there, right? One is network seekers. Yeah. Right? Now amongst network seekers, more and more of them are recognizing that T-Mobile is the best network. A stat that blows my mind is four years ago, when you looked at switchers, 14% of them thought T-Mobile had the best network. Something like 38% thought Verizon did. Last quarter, the 14 had grown to 26, and the 38 had come down to 28, right? We're in a place where more and more customers are recognizing that we're the best network. There's about 20 million families and businesses who chose AT&T or Verizon because they thought they were the best network. Yeah. That was probably true in the 4G era. They're today willing to pay a higher price for it. Each of those families and businesses are now getting to the place where they're realizing they can get value and network and experience in the same place. That's what's driving our growth. For example, in the top 100. New York, we're number one by a long distance, and we're still growing share, right? That's because amongst network seekers, we still under-index in New York. In enterprises, right, where our share is low, as more and more enterprises are testing their network before they use it because, you know, wireless is such a big way of doing business today. Sure W e're finding, again, the water flowing in our direction. SMRA, fascinating story. We were 13% market share in 2020. Organically, that's gone up to 21, and when you add UScellular, that's at 24. Hmm. That's impressive, but it's only 24, right? Part of this is, you know, you've got to start questioning this whole concept of fair share, because a lot of the way analysts think about this is almost like in a commoditized industry, there are three players, everyone has 1/3. Right. That's okay, but what if one player has best network, best value, and best experience? I think you've got to challenge what the concept of fair share is. I see a lot of growth ahead of us in top 100, SMRA, and enterprise in the wireless business. I was gonna ask you if the you're narrowing that perception gap as quickly as you'd like, but I think I know the answer. You'd always wanna go faster. Yeah, I'd always wanna go faster. How do you do that other than, you know, you have those great Billy Bob Thornton abs that people enjoy. What else do you got up your sleeve to try to accelerate that perception gap getting closed? The perception gap is closing, like I was talking about. Yeah. I'd love to do it faster. I'd love to go even quicker. The reality of the way customers think about a network is the network is a personal experience. Your view of our network is your experience and the experience of your friends and family, right? The perception scores help because NPS helps because that means more people recommend us. Ultimately, it's about your experience. There are two things that really help with that. One is digital and the app itself. We're able to now tell you what your experience is, where you live, work, and play, specifically your experience. Give us where you work. We'll tell you what your experience is like. Tell us where you live, and we'll tell you what your experience is like. Tell us your commute route. Where do you go on holiday, right? We can tell you what our network experience is like, and we're happy being open about it because in the vast majority of cases, it will be outstanding. Hmm. We're also bringing that toolkit into our retail stores. My vision for this is when a customer walks into our retail store, our agent needs to ask them, "Where do you live? Where do you work? And where do you play?" I can tell you what our network is there. Hmm. and why it will be an outstanding network. That's helpful. Thank you. We were talking about the competitive environment. We've seen the sort of investor sentiment around your stock and the space shift a lot in the last six months. It seems like there's maybe a little bit of an appreciation, at least we're hearing it in messaging from all the management teams of more rational behavior. Particularly, I've been quoting you a lot, "You can't make free phones more free." What's the message that you're trying to communicate to investors around sort of promotional intensity and how the competitive environment is shaping up here early in 2026? Look, I think there's kinda two separate questions of that if I parse it out, right? One is competitive intensity, promotional intensity, and the rest of it. That's something we've lived with for a while. Yeah. We like a competitive industry because there's more jump balls, right? That just gives us more opportunity to create more switching. This quarter hasn't been that different. It's an intense world out there. Hmm. Just to give you a sense, December, which was probably the most intensely competitive month, our port-ins had a 15% higher value than our port-outs, right? Which means not just are we winning on volume, importantly, we're winning on the CLV of the customers we're bringing in. Right. Which ultimately is gonna be the big question. To my comment on you can't make free phones freer than free, it's less about promotional intensity. It's about a philosophy on value. Our view on value is really simple. It doesn't mean we're gonna stop subsidies. It simply means that, you know, getting a free phone once in 24 months. Cannot be the definition of value you get out of the relationship with us. We have so much that we offer on a daily, monthly basis. You know the story of us running out of chicken with Wingstop when we gave Wingstop free on T-Mobile Tuesdays. There's Netflix, there's Hulu, there's a lot of stuff on us. There's Wi-Fi, right? There's. We think of this as making that relationship incredibly valuable and making it a daily relationship, making it a relationship where we thank you every day for being a part of the T-Mobile family. When we talk about value, we'd love for the conversation to be a more broader, rounded conversation rather than, you know, I give you a free phone that's really free once in 24 months, and then, you know, good luck for the rest of the time, and maybe I'll put up your price in the meanwhile. Yeah. Right? That's at the center of this for us is the philosophy we wanna take the value. There's certainly a view, I think from certainly one of your competitors, that they have taken too much price, right? They're backing away. How do you approach protecting your value position with price adjustments, rate adjustments that you guys do from time to time as well? I mean, it's the same piece as growing ARPA for me. Structurally, we really like having the lowest priced front book and the lowest priced back book. Yeah. That gives us so much flexibility to act. The beauty of math is that when you have that, then you get an ARPA increase automatically. You don't have to go out there and kinda do a bunch of contortions and gymnastics to get there, right? The second piece is we value the relationship, and so more product in. Once in a while, we will look thoughtfully at rate plan optimization. Okay. Why don't we shift gears to broadband? You're targeting 18 million-19 million broadband customers by 2030 now, a mix of fixed wireless and fiber. Fixed wireless, you've gone from 0 to eight in four years. As you look ahead, Srini, how are you thinking about the opportunity that's still in front of you in fixed wireless? I love the opportunity that's still in front of us. I think it's worth reminding ourselves how we actually think about this product, right? It is a fallow capacity product. What does that mean? We have these things called hex bins. They're basically coverage areas. There's 30 million of them- Mm-hmm. A cross the U.S. We look at each hex bin, and we forecast wireless usage in the peak hour between seven to nine. Once we have that, we know how much of our capacity is gonna be used for wireless. We then look at the rest of the capacity, and we say, "How many fixed wireless customers could we have here?" We cap the market share that fixed wireless will get to. Mm-hmm. That's the basis of our planning for fixed wireless. We didn't start with saying, "We're gonna have 50 million customers. We're gonna do whatever it takes to get there." We said, "What does the bottom-up math give us?" We now find instead of 12 million, we can get to 15 million. Why is that? Because technology in wireless is improving all the time. Yeah. As kind of the leaders in 5G-Advanced, we're able to squeeze more out of our spectrum. As the quality of routers improves, we're getting more, right? With our latest Gen Five routers, we get phenomenal performance. All of that adds up to an outstanding product. I mean, we've grown to eight million customers, just in the last two years, we've doubled the number of customers. We've seen a 30% increase in usage per customer, our speeds have still gone up by 50%. Yeah. In all our assumption on 15 million customers, we're not assuming any spectrum auctions. We're not assuming any spectral efficiency from 6G, right? This is taking our carefully thought out hex bin planning, capping market share, and that gets us to 15 million. I love the product. That's great. I know where you'll probably take this answer, but still have to ask it. When you think about the fiber piece of the puzzle. Yeah. Y ou guys have done a couple of joint ventures. You're building out fiber. Does any of the stuff you're seeing in your forecasting in terms of usage and competitive dynamics suggest T-Mobile needs to have a bigger fiber footprint long term than what you've got today? I like a bigger fiber footprint for value creation, but not defensive reasons. I don't need a bigger fiber footprint. Mm-hmm. I like a bigger fiber footprint when it fulfills three conditions: when the price is right, when the cost per home connected rather than the cost per home passed is attractive. Yeah. A nd where it's a world where we're first to fiber or near first to fiber, and therefore, we can create attractive returns. I like it as a big opportunity to create equity value, but none of the kind of costs of convergence or, you know, number of homes passed or scale for scale sake because fiber is not a national scale game. It's a regional scale game. Right. Okay. All right, why don't we shift gears? I wanna ask you about satellite connectivity and direct-to-device. You guys have been discussed a lot by other companies at this conference around T-Satellite and the product you've rolled out. Tell us about the partnership with Starlink and how you see satellite connectivity evolving over time for T-Mobile and your customers. This is. Yeah. I love the product. It's. Look, we created this partnership with Starlink to put an end to dead zones, just the engineering task blows my mind, right? Who would have thought four or five years ago you would have flying towers- Yeah. W ho could actually communicate with a moving, wireless device, right? It took both teams. We invented the category with Starlink, and we like the partnership. At an engineering level, we love working with them, and solving difficult, complex problems. I think that partnership continues to be focused on exactly that, which is how do we put an end to dead zones? When you think of Direct to Cell as a category, when you think of satellite more broadly as a category, I think broadband is substitutional, and it's a good product, and it's substitutional 'cause the physics and the economics of it work to be substitutional. Mm. I think you heard Gwynne and Mike speak this week at the Mobile World Congress. They have the same view, which is Direct to Cell is far more complementary than it is substitutional, just because the physics and the economics of it work that way. Whether you think of kind of how the beam that you have in a satellite, whether you think about the ability to connect indoors, it's a clearly complementary category, and we like the partnership and we like what it, the value it brings in terms of putting an end to dead zones. What do customers think of it so far? Has the demand been in line with your expectations? Very much so. It's one of those things that a lot of people buy as insurance as well. Yeah. Right? Usage isn't necessarily the best indicator of value they get. The way we think of it is it's part of this everyday value we provide, right? It's part of reminding you every day why the relationship with T-Mobile is special. Mm-hmm. Do you see Starlink and Direct to Cell still complementary even if they were to acquire Spectrum? Obviously, SpaceX is in the process of closing on a transaction with EchoStar. Very much so, 'cause, I mean, you just, again, you look at the physics and economics of this and the amount of spectrum versus the number of towers, and the actual capacity that it will have, even with all the satellites, it's a great complementary category. In that case, if they were interested in an MVNO with T-Mobile, would you be interested at the right economic structure? Look, our philosophy on MVNOs is really clear. We get into an MVNO when we think there's an incremental TAM to go after, and that could be because of a specific target population, like, you know, an ethnic group, or it could be because of a specific channel play and distribution, which is why we did the MVNO with the cable players. Mm-hmm. Right? It's not clear to me how a partnership with Starlink from an MVNO perspective would fit into those criteria. I got it. That makes sense. Okay. All right, let's shift to something this audience cares a lot about, which is capital allocation. You have, I think, over $50 billion remaining in your capital envelope through 2027. You've got buybacks. We're expecting the pace of buybacks to pick up. How do you prioritize all your different options when you think about share repurchases, M&A, spectrum obviously got some auctions coming? This is one of the things we as a management team and as a board spend a lot of time on. As you'd expect as kind of responsible stewards of your capital, we start with leverage. What is the right level of leverage? In the current environment, we still think 2.5x EBITDA is the right level of leverage. Then we look at the business itself. What are all the investments it needs? Right? Specifically, what does CapEx look like? And we've given a guide which is $10 billion while we do the UScellular and go into that range of nine to 10. What other investments does the business need? What are the strategic opportunities? Those could range from fiber M&A to Spectrum, and how does that play into it? That tumbles into shareholder remuneration, and the split between share buyback and dividend. That's consistently, what we follow. How come you decided to lean in in the first quarter here? I think you talked about up to $5 billion. As a board, what we look at is once we've done that flow-through, we look at, what do we think is the divergence from intrinsic value, right? The board reviews that from time to time and decides on what is the right level of share buyback in the context of the overall envelope. Okay. I know it's a probably a better question for Deutsche Telekom, but they also announced they would not be selling in this year. What does that tell? What signal does that send to the market in your mind? From my perspective, it tells us they trust this management team, which is good to hear. You'd have to ask them about the details of that. Right. Okay. All right, lastly on Spectrum, to the extent you can talk about it, you know, last month you guys emphasized this sort of build versus buy framework, as you evaluate deals, et cetera. How would you describe the kind of Spectrum position at T-Mobile today when you look at it versus your competitive set? We love our position, Ben. You just look at Mid-band. 2.5 versus the existing C-band, 70% more area covered. Secondly, we will defend our Spectrum leadership. We think it's fundamental to the best network, and we'll be thoughtful about doing it, right? I think it's kind of, we can have those two thoughts at the same time. We will defend- Yeah. O ur leadership, and we'll be economically sensible. When we looked at stuff like EchoStar, the price was too high. I think the really great news is I think Brendan Carr and the FCC have done a fabulous job in terms of the amount of spectrum that's becoming available. As we go through 2027 with the C-band, also the fact that 2.7 GHz band is now being looked at by the government as part of an official process. Mm-hmm. There's also potentials for seven gig coming in. I think there's a lot of spectrum, which means the value of that spectrum will be good. We're interested in looking at all of that as we think about defending our spectrum leadership and extending that, because this is not purely about just keeping what we have, it's also extending it, as part of our broader best network and continuing to stay three to four years ahead of everyone else. Maybe for my last question then, let's look out three to five years and tell us a little bit about what you think 6G could bring, you know, to T-Mobile and to the industry as we start to think more seriously about that technology. I'm really excited by what 6G could bring. I mean, I think it'll bring the normal things a new G brings in terms of better air interface, better spectral efficiency, et cetera, et cetera. The standout thing is for the first time, you will have a network that not just processes bits and bytes, but also tokens. That will be because we'll have AI RAN. Just to give you a sense of the kind of thing AI RAN is already doing for us, when we had Winter Storm Fern, all of our antenna tilts during that, during the storm was actually done through AI and a self-optimizing network. You didn't have people climbing up towers to tilt an antenna, right? It's one of the reasons why we had such little disruption in our network. We will need AI within our own network. That will create enormous opportunities. 'Cause in a physical AI world, as Jensen Huang calls it, right, what you will have is for robotics to work, for factory automation to work, connectivity will be the connective tissue. Yeah. Without low latency connectivity and without inference at the edge, it's gonna be hard to scale this stuff. When you think about the idea that I'm already going to put AI into the network, low latency will be a feature of 6G, and you want to offer inference at the edge. I think there's a really exciting possibility of not just having fallow capacity for FWA, but having fallow compute to drive inference at the edge, right? I think 6G and what it could do, not just in terms of network efficiency and everything you're normally used to seeing in wireless networks, but also the role it can allow us to play in the physical AI and inference ecosystem could be incredibly exciting. That is exciting. It'll be here before we realize it. Bits, bytes, and tokens. Yeah. Bits, bytes, and tokens. All right. Anything you wanna wrap up with? Yeah. Look, I think the story of T-Mobile that you should expect to see over the next, three, five years is kind of three parts. Widening differentiation, which goes back to best network, best value, best experience. Continuing to push ahead, continuing to open up an even bigger gap from our perspective in terms of the quality of relationship, which in turn opens up unparalleled growth opportunities, from consumer wireless to enterprise wireless and SMB wireless to broadband to physical and edge AI, and also into leveraging that relationship into new areas like financial services. All of that combined with the financial discipline to convert that into revenues, EBITDA, and most importantly, industry-leading free cash flow conversion. Well, thank you very much, Srini, for coming. Thank you. Thank you for having me. Thanks, everybody. Thanks.