T-Mobile CEO marks progress in decommissioning Sprint network

T-Mobile is less than two and a half years into the completion of its merger with Sprint, and it’s substantially decommissioned the entire Sprint network, a goal that was supposed to have been achieved about a year from now and one that it recently indicated it would wrap up this quarter.

“That’s substantially done as we speak today,” said T-Mobile President and CEO Mike Sievert during an appearance Wednesday at the Goldman Sachs Communacopia + Technology Conference in San Francisco.

During this time, “we have delivered consistent, reliable growth,” he said. In fact, it's acquired 13.2 million postpaid net additions since the creation of the merger, which is more than AT&T and Verizon combined, he said.

It’s also substantially completed other aspects of its merger integration and achieved corporate investment grade ratings from the three major rating agencies, which gives it access to capital at more competitive rates.

The one thing that’s still left to do is billing, and it’s the last substantial phase related to the Sprint merger, he said. In prior mergers, the acquiring party had to move customers all at once, including their billing, network and device.

But now they’re able to separate these things out. The intention is to make it opaque to the customer, so Sprint customer billing will move to T-Mobile without making it look like there have been any major changes to the look and feel of the bill.

Sizing up the market

As for priorities beyond that, profitable growth is at the top of the list, according to Sievert.  

What makes the story different for T-Mobile has a lot to do with past weaknesses. In vast rural and smaller markets, T-Mobile’s market share is in the teens, he said.

Enterprise/government is another area where it has about 10% market share and wants to double that in relatively short order.

“The 5G lead that we were able to create for ourselves has changed the relationship that we have with enterprises significantly,” he said. “Now we’ve got corner office relationships that are emerging,” and these prospective enterprise customers are very interested to see if 5G advanced services can change their business, which enables T-Mobile to win market share.

He also said his competitors have been feeding on elevated Sprint churn “for years.” In the last quarter, T-Mobile was able to deliver 0.80% in postpaid phone churn, including Sprint, which was lower than Verizon. But of course, he wants to improve the churn rate even more. 

While T-Mobile boasts a great 5G network, a lot of people are just getting used to the idea that T-Mobile is in this position versus network giant Verizon. But what T-Mobile also has going for it is the reputation as being the leader in lower prices.

Among the big-scale providers, T-Mobile has lasting fame as a brand for being the best value, and “that’s tough to take from us,” he said. “We’ve earned it over years and years and years.”

It was almost a year ago that T-Mobile announced a distribution deal with Walmart. How critical is that to meeting its rural penetration targets in rural areas?

One of the things they have to do is meet customers where they are and Walmart is one of those places, he said, as well as digital and online. Plus having their own distribution is important. “We plant T-Mobile flags in these towns,” he said.

Looking up

Regarding T-Mobile’s recently announced partnership with SpaceX, Sievert said people want a signal everywhere and cellular doesn’t cut it. But the deal with SpaceX gives it a chance to leap out in front with the satellite capabilities. If everything goes as planned, they will start with a beta service late next year, starting with messaging. The expectation is it should eventually work for voice and data as well.

Sievert said he’s unsure how long the FCC approval process will take. But the FCC has been very clear that one of its priorities is making sure reliable connections are available everywhere and what this partnership essentially does is put a cell tower in the sky. "I don't think it should raise a lot of questions from a regulatory standpoint," he said.