Peter Osvaldik: Yes. ’24, we’d expect to be generally stable to 2023. And in terms of dynamics, it’s going to be the same set of dynamics. You have growth in high-value creating enterprise and government customers. You have growth in tremendously great CLV segment customers like 55+ and Military on the consumer side, which Jon has just seen tremendous success with. You’re going to see uptake of our highest tier, highest value rate plans continue at a great clip. And then it just becomes a mix-driven metric. And again, we tend to solve for ARPA and ARPA growth and overall service revenue growth as the focus point. So that’s, it’s going to be more of the same with regards to ARPU.
Peter Supino: You bet. Thanks so much.
Mike Sievert: You bet. Hopefully, you can tell we’re trying to get to absolutely as many questions as we can as time so let’s keep moving.
Jud Henry: All right. Next question.
Operator: And the next question comes from Timothy Horan with Oppenheimer. Please go ahead.
Timothy Horan: Thanks, guys. You had a goal a few years ago of a 15-fold increase in wireless capacity. Could you give us an update kind of where we are at this point and just what 5G is meant for maybe latency or anything else with the network. And I know you talked touched on network slicing. What was Formula 1 in PGA doing kind of before you kind of came along for wireless capacity? How much of improvement was us at this point? Thank you.
Mike Sievert: Well, first, on overall capacity, it’s a good opportunity to turn it to Ulf and maybe you can say what we’re seeing now that we’re substantially complete with the initial build.
Ulf Ewaldsson: Yes. Thanks a lot, Mike, and thanks for the question. Well, overall, the network capacity on this fantastic network is outstanding and keeps increasing on 5G as we are pivoting over frequency from our LTE customers over to 5G. And we keep doing that all the time. That’s why we can stay ahead of the curve, both with our HSI customers being inside that mobile umbrella, but also making sure that we have enough capacity to grow for all the traffic growth on the network. And as Mike alluded to earlier, we just see an increasing usage. People use more and more of the goodness that we provide. I’ll also say that this is across our entire geography. We have to remember that our network is much, much larger in size than 5G than any of our competitor in this country.
We have on our 5G coverage more than twice the area of our closest competitor on our ultra-capacity, which is what provides all that capacity. When it comes to the second question, which was around network slicing in Las Vegas, and as Callie alluded to, this was a true success story. We were the only operator in the world or in the country that could provide a true beta version because of our stand-alone core that we have in this network — of network slicing. In other words, we can program our network to make sure that services work while all the other services and serving all the other customers on the network at the same time. We were able to provide network slicing during the start of the race, which means that we could both make sure that all those points of sales had full service to everything they were doing at the same time as hundred thousand customers per day were using our network during that start the rate, watching their apps, doing all the activities that they will be doing.
This has almost never happened in Formula 1 history. It’s normally very congested, very difficult to do anything when so many customers are accessing the network at the same time. And that’s what network slicing was proving to do in Las Vegas, and it’s just started early to come. We’re going to roll these kind of things out to much more events in the future.
Mike Sievert: As it relates to your specific question on the 15 times, I actually don’t have the answer at my fingertips. So I’m going to look into that. I can tell you that when we made that estimate, what we had in mind were the commercial results that we have delivered in space, being able to see phone usage grow the way it has grown at T-Mobile, it’s now more than triple what it was five years ago. Four times the speed and then some and being able to handle this massive home broadband business on top as well as all the growth that we see in enterprise. So as we laid out this network, that way back in 2018 and planned it, we have met every single expectation that we laid out there, including some stringent commitments that we made to the FCC as part of the merger process and just completed a massive nationwide drive in order to be able to make those goals.
So I would be surprised if it’s anything other than the 15x has been achieved, but I’ll have to double check on that. As it relates to the F1, it’s fascinating, you hear Ulf talking about Network Slicing and what it’s doing for people. And there have been lots of applications. We talk about F1 because it’s very public and it’s going to be great case study for all of our executive briefing center visits, et cetera. But there have been lots of these now. And look, your previous options were either string wires everywhere, which was not ideal or rely on Wi-Fi. Where you have no control over the radio spectrum and it’s a best efforts service with a shared spectrum. And so this is a breakthrough for organizations that they need mission-critical distributed connectivity.
Network slicing on 5G is a breakthrough solution for that. We’re going to see lots of applications like powering the commercial operations at F1, where it’s the perfect solution.
Timothy Horan: So Mike, do you think there’s a way that the industry can grow ARPA faster? I mean, we’ve been kind of growing way, way below inflation for a long period of time, but we’re seeing major improvements in the network. I mean is there any way to kind of get to inflation-type ARPA growth longer term?
Mike Sievert: I mean this industry gives remarkable value, and we’ve been talking about that a little bit during the call. As it relates to T-Mobile, we’re always looking for ways that we can serve customers better and make sure that we build a profitable business around that. And we have to do that smartly so that we defend and extend our fame as the value provider because that’s so important, and we have lower costs. So that should be defensible over the long haul as evidenced by things like a lower debt structure and lower cost to service that debt than anybody else in the industry. So it’s a defensible place, but we have to defend it by making smart decisions. And we have the best network, and that should allow us to find the right optimization to be able to serve customers better.
