T-Mobile went public on May 1, 2013, at a time when it was considered a rebel looking to upend the wireless industry.
“I think we’re still the insurgent,” said T-Mobile President and CEO Mike Sievert at the J.P. Morgan Global Technology, Media and Communications Conference on Monday. “Our company has a culture that is hard to replicate, where every single one of us wakes up every morning hungry.”
Back then, they used to say that one day, T-Mobile would be as big as the old telecoms, “but we can never become them,” he said. “I say that not to suggest that we don’t understand our role as stewards of this industry… But I believe that we still have tons of room to run. The math backs me up on that.”
T-Mobile is significantly under-penetrated with major segments, and it’s going after those markets with a tenacity that matches anything it’s done over the last 10 years, he said.
Sievert said T-Mobile is all about creating value, and in that sense, not a lot has changed. T-Mobile is still the value leader, but what’s changed is now it’s also the network leader: “Now we’re winning the hearts and minds of people who buy in this category based on network,” he said.
For many years, neither T-Mobile nor Sprint attracted postpaid consumers with the kind of credit that its rivals drew. But that’s changing, according to Sievert.
T-Mobile’s most popular plans, the Magenta Max and the new Go5G Plus plan, happen to be the higher end plans, and customers are using four times more data than they were using on the most popular plans four years ago.
Last quarter, T-Mobile achieved an all-time high in its prime credit base and it outperformed both AT&T and Verizon on bad debt, Sievert said. “I’m saying that T-Mobile customers pay their bills at a superior rate to AT&T or Verizon customers, overall, again this quarter,” he said.
“We got into the top 100 markets as a market leader by being a value player,” yet tens of millions of consumers never gave T-Mobile a single look because they wanted the network leader. “Now they’re giving us a real look,” he said.
Sievert also commented on Verizon’s new myPlan offers. He said if Verizon had slashed prices when they “took out all those goodies” and allowed people to pay to add goodies back in, that might have won over more consumers. But instead they took them out and said “look, we’re giving you choice now,” without reducing prices, and “they’re hoping consumers won’t see through that, but we’ll see,” Sievert said.
Chasing Verizon in enterprise space
J.P. Morgan analyst Phil Cusick noted that the enterprise space has always been a source of strength for AT&T and Verizon.
At its 2021 Analyst Day, T-Mobile talked about its goal to reach over 20% market share in the enterprise and government space by 2025, and that’s very much on track, Sievert said.
As Sievert discussed during the Q1 earnings call, T-Mobile outpaced Verizon on business net adds, business phone net adds and business churn.
“I’m not trying to disparage them. I’m just saying we have always held them as this great benchmark and we can’t be a leader unless we chase them and we’re a competitive company so we like to go do that,” he said. “So our team’s got a little spring in their step. We’re seeing validation from customers.”
Businesses don’t buy on reputation; they check out and test 100 phones for weeks and compare performances. “Enterprises want the best network for their customers,” he said, adding that T-Mobile will continue to have a two-year network advantage over its rivals for the foreseeable future.
T-Mobile’s deal to be the exclusive network partner of AAA for roadside assistance is indicative of how its network image has changed, as anyone using AAA knows the network had better work “in the middle of nowhere.”
Fixed wireless access (FWA) is often held up as the biggest success story for 5G, but Sievert suggested 5G is enabling a lot more than that.
The typical Magenta Max user is consuming far more data than ever before, and “it’s profound,” he said, adding that it’s all driven by the 5G network. As he’s said previously, “the smartphone is the killer app of the 5G era,” he said, with customers experiencing data speeds that are 10 times faster than they experienced before T-Mobile merged with Sprint.
Overall, “this industry is delivering the dividends on 5G that we promised,” he said. Revenues and cash flows are vibrant because of the investments in the industry. “What you have is a vibrant, growing, profitable industry,” where both consumers and industry are winning, he said.