T-Mobile US, Inc. (NASDAQ:TMUS) Q2 2023 Earnings Call Transcript

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Business, you tend to get enterprise, government, large accounts that have very, very great CLVs but would have, given the nature of the volume purchasing, lower ARPU. So all of that blends into ARPU that we see is generally stable. But it’s the ARPA strategy that we have. It’s the switching attracting accounts into T-Mobile and then the land and expand ARPA strategy, which you just saw an exciting update to the guide from plus 1% to slightly over 1% on a year-over-year basis there. And that’s really the focus point for us. But — the question on Go5GPlus, and then I hand it to John for a moment because it’s been a phenomenal success.

Jon Freier: Yeah. And then I think, Peter, just to remind everybody, the Go5GPlus is really kind of a front book initiative. We’re not going into the base and asking people to migrate to Go5GPlus and doing all of that within the base. It’s really kind of a front book initiative. But this is going fantastic. And we had an opportunity to mention this on our Q1 earnings call back on April 27, when we launched phone freedom, Go5G, Go5GPlus in mid-April. And like Mike said a few moments ago, when you look at the overall porting ratios and the attractiveness of this offer, and what’s happening that we’ve increased our porting ratios every month against every competitor and have followed that through so far in July. And over 60% of the accounts that are joining T-Mobile are now subscribing to Go5GPlus.

And there’s a utility that’s different than Magenta MAX in terms of hotspot data that we’ve increased in terms of high speed, roaming in Mexico and Canada, across North America that we’ve increased. But the big pain point that I think Go5GPlus is solving is that new and to promise. First of all, paired with the easy unlock in helping people get out of AT&T and Verizon, mostly AT&T given the unlocked devices, helping people get out of that switch in to T-Mobile, but this three-year contract cycle that AT&T and Verizon has. We knew this was a big insight and a big opportunity that even I underestimated how big of a pain point that is, the fact that you can basically go to law school and complete law school faster than you can complete a phone contract at AT&T and Verizon.

And so that’s a huge pain point in the promise of Go5GPlus of being able to get in a new device same device software as a new customer every two years. It’s a differentiated and unique proposition in the marketplace that’s really different and is really resonating with customers.

Mike Sievert: Well said. Okay. And your last question was about HIS pricing. I’ll just answer it briefly. I don’t normally give sort of forward-looking commentary on pricing. So I’ll answer it this way instead, which is do we see ARPU and are we interested in ARPU enhancement for HIS. And the answer is yes, of course. But generally, when you look at our track record, our philosophy in the past as to how to get about that isn’t to jack up people’s prices, is to add value to their life, bring new services, show them increased offers and let themselves select their way up. And obviously, we’re interested in that in this space.

Timothy Horan: Okay. Good.

Jud Henry: Next question, please.

Operator: That will come from the line of Michael Rollins with Citi. Your line is open.

Michael Rollins: Thanks and good afternoon. Just following on the earlier comment, on some of the integration milestones that you’ve hit. What are the activities that are left to get to the full synergy run rate of $7.5 billion for this year’s guidance, $8 billion next year? And can you unpack and maybe even size some of the opportunities for further cost efficiencies that may be embedded in your multiyear plan to drive that longer-term margin expansion. Thanks.

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