- T-Mobile CEO Mike Sievert is ending his tenure with strong Q3 results
- Incoming CEO Srini Gopalan expects to extend T-Mobile’s network leadership
- Consumer perception about T-Mobile’s network is starting to change in its favor
Ending his last earnings call today with a glass of champagne, T-Mobile’s outgoing CEO Mike Sievert promised his team won’t spend the entire day by day drinking – but if that should happen, one has to wonder who’s going to protest loudly.
That’s because Sievert just spent the previous hour telling everybody how great T-Mobile performed under his stewardship and propping up incoming CEO Srini Gopalan, who officially takes the reins on November 1. Sievert, Gopalan and the rest of the T-Mobile executive management team hosted the call from New York, where it marked Sievert’s 50th quarterly earnings report, an anniversary that happens to coincide with another famous show.
T-Mobile usually conducts earnings calls from its headquarters in Bellevue, Washington, but occasionally takes the show on the road to New York, where management can meet in person with the Wall Street crowd.
As luck would have it, T-Mobile was able to boast some stellar Q3 results: 1 million new postpaid phone customers, 506,000 fixed wireless access (FWA) subscribers and fiber net customer additions of 54,000. Service revenues were up 9% year over year to $18.2 billion, and adjusted EBITDA was $8.7 billion, up 6% year over year.
Even with those results, T-Mobile’s shares were trading down about 3% this morning, around $219.67. That could be because investors are nervous about how Verizon and cable competitors like Comcast and Charter Communications will respond. Steep price discounts? More aggressive promotions?
Time will tell. For now, Verizon’s rather disorderly CEO transition gave Sievert the chance to rub it in a little bit. He reiterated what it means to “get CEO succession right,” which calls for three things: the company’s at its most successful point in history; the future looks bright; and “the leader to take us into the future is fully ready.”
T-Mobile’s most recent quarter, he said, “is living proof that all three are true for T Mobile right now.”
T-Mobile defends spectrum position
Verizon most assuredly would argue with all that, but by many estimates, it ceded its network prowess to T-Mobile in the 5G era for a variety of reasons, and T-Mobile’s management team today hammered home on one of them: T-Mobile’s spectrum position.
“We not only have more spectrum than anyone else, we have better spectrum than anyone else,” Gopalan said.
He didn’t name anyone but alluded to some spectrum deals that have occurred on the secondary market. Some financial analysts have questioned the price that AT&T is paying for spectrum it's acquiring from EchoStar compared to the price at which it was initially obtained at auction.
(For the record, AT&T CEO John Stankey acknowledged the price discrepancy in a conference call after the spectrum deal was announced. “I'm well aware that what we're paying is more than what Dish paid for spectrum at auction, but that's not a new and startling fact. There are speculators who go in and buy spectrum all the time and hold it for a number of years and then ultimately come back in and sell it for more than what they bought it for, and that's the nature of auctions,” he said.)
Back to T-Mobile and some of those secondary market transactions: “We go through kind of the rigorous analysis of what is better – is it better to buy the spectrum or is it better to densify – and our answer in all of those cases was it was cheaper for us to densify than pay the price that was being asked,” Gopalan said.
“Now other people might have to make different choices, and in some sense, the fact that they have to make different choices is a reflection of the gap in our spectrum position, and that's the way we've thought of a lot of the conversations that have happened,” he added.
T-Mobile: Changing network perception
One big driver in T-Mobile’s financial results is the fact that more customers are beginning to change their perception about its network.
One out of every three AT&T and Verizon customers chose them at some point because they had the best network, and that figures out to some 70 million customers “that are paying a premium for something that is simply no longer true and we can unlock [that] with our best network,” Gopalan said.
“In Q3, we hit an all-time high in our network perception among switchers, and that’s a big driver to the outperformance we’re seeing,” he said. “Our network perception is changing because the reality is changing.”
T-Mobile touts its network
Ookla data shows T-Mobile’s median download speeds on the new Apple iPhone 17 are nearly 90% faster than one of its benchmark competitors and more than 40% faster than the other, Gopalan said.
T-Mobile President of Technology and CTO John Saw, who worked with Sievert going back to their days at Clearwire and was instrumental in stitching together Sprint’s and later T-Mobile’s 2.5 GHz spectrum position, noted that the Samsung S25 Android device is more than 100% faster than one of its competitors.
Part of that network leadership comes from the fact T-Mobile has more cell sites than anyone else, according to Saw.
T-Mobile was the first to roll out nationwide 5G standalone (SA), which its closest rivals are just now deploying commercially on a nationwide basis, and that’s enabled it to offer capabilities like network slicing that power new services like T-Priority and SuperMobile. Earlier this year, T-Mobile launched 5G-Advanced, which enables lower latency and better uplink and downlink performance.
The Apple watch that was released this year uses 5G RedCap, which means longer battery life, lower latency and higher throughput than LTE watches running on rivals’ networks, Saw noted.
“We won't stop with these assets and these capabilities,” he pledged. “We are going to maintain and extend our lead for years to come.”
Sounds like as good a reason as any for a toast.
But as industry analyst Craig Moffett pointed out in a report for investors today, the wild card for everyone remains Verizon. “What will Verizon do if it is indeed bearing the brunt of T-Mobile’s (and cable’s) share gains?” he asked.
Some of that might be revealed next Wednesday when Verizon releases its Q3 results and conducts its first earnings call with its newly installed CEO Dan Schulman.