T-Mobile's Growth Strategy: Key Insights from the CEO

Market Expansion Initiatives and Strategies

T-Mobile's market expansion strategy focuses on profitable customer growth, targeting underpenetrated areas through initiatives like fiber-to-the-home and a land-and-expand approach. The company aims to enhance service revenues and achieve significant financial growth, leveraging its broadband offerings to attract new customers.

"Profitable customer growth strategy expected to deliver outsized financial growth, including accelerating growth in Service Revenues, a nearly $10 billion increase in Annual Core Adjusted EBITDA by 2027,1 and industry-leading Adjusted Free Cash Flow margin At its Capital Markets Day event today, T-Mobile US, Inc. (NASDAQ:TMUS) unveiled an ambitious three-year plan that demonstrates how the company will continue its growth momentum to unlock massive value creation into the future." --- (TMUS, press release, 2024/09/18)

"Platform expansion rates remain healthy and consistent with recent trends. Our strategy is to drive a higher portion of our business mix to new customer growth and it's working well." --- (S, earning call, 2025/Q2)

"And the rest represent kind of a land and expand strategy that we've been talking about, which is people coming in from the top 100 markets, also from smaller markets in rural areas, and choosing T-Mobile through the broadband front door, and then giving us an opportunity to sell wireless, which is a cool dynamic to see." --- (TMUS, earning call, 2024/Q2)

"growth and margin expansion shows an extraordinary financial profile. Still, we have the opportunity to enhance our go-to-market execution and evolve related processes to support increasing scale and diverse growth." --- (S, earning call, 2025/Q1)

"Eric Luebchow: Hi great. Thanks for taking the question. Just to follow up on the fiber-to-the-home strategy at a high level, as you look at potential future opportunities, is the goal to target areas where you might be underpenetrated in either fixed wireless or traditional mobile to kind of expand your addressable market or is it in part to provide an alternative for existing FWA subs to offload to a higher capacity option?" --- (TMUS, earning call, 2024/Q1)

Customer Growth Strategies and Partnerships

T-Mobile's customer growth strategies focus on leveraging unique assets, such as its advanced 5G network and strong partnerships with companies like Mint, Ultra, and OpenAI. These collaborations aim to enhance customer engagement and tap into underserved markets, driving growth across various segments.

"Growing New Businesses – Using its unique assets and by leveraging its embedded customer relationships, broad distribution, strong brand affinity, and the most advanced 5G network, T-Mobile will unlock opportunities that meet clear customer needs in new areas." --- (TMUS, press release, 2024/09/18)

"all growing businesses. Yes. They're growing businesses. And it's businesses that are in segments that, because we have the strong partnership with Mint, Ultra and Plum is something that we service through our wholesale." --- (TMUS, conference, 2024/05/14)

"Eventually, this technology could also offer other customer-obsessed companies worldwide the same opportunity to transform their approach to customer engagement, as the technology and business processes being created by this partnership have broad applications across customer-serving industries." --- (TMUS, press release, 2024/09/18)

"And for our business, we continue to have these differentiated growth opportunities, whether that be smaller markets in rural areas, whether that be within our High Speed Internet or in our overall enterprise and government space that Callie can talk about in just a few moments as well." --- (TMUS, earning call, 2024/Q1)

""T-Mobile is always up for a challenge, so when SailGP offered us a chance to bring America's fastest 5G network to one of the world's fastest growing global sports leagues – and to enable it to work over the New York Harbor, we were all in," said Callie Field, President, T-Mobile Business Group." --- (TMUS, press release, 2024/06/20)

Competitive Positioning and Differentiation

T-Mobile's competitive positioning is strengthened by its focus on upgrading customers to 5G technology, ensuring a superior customer experience. The company emphasizes platform differentiation and a strategic approach to acquiring quality customers, which collectively enhance its market momentum and resilience against competitors.

"And then fixed wireless access, the differentiation of the product, how we deploy it, how the customer provision it so different.And with all the streaming agreements we have right now, we can scale that horizontally to all our customers." --- (VZ, earning call, 2024/Q2)

"And they'll do it in a stepwise way. They continue to do it. And you can tell we're upgrading people fast enough by the fact that all those people have 5G phones, which is right at or even above competitive benchmarks." --- (TMUS, earning call, 2024/Q1)

"It's not an adjustment to our plan. We're going to continue to go find those quality customers with a competitive offering and bring them in, and that will ultimately sustain the business going forward.And I don't think this is an issue of price increases -- for price increases sake." --- (T, earning call, 2024/Q2)

"I've never been more excited about our platform differentiation and go-to-market momentum." --- (S, earning call, 2025/Q2)

"The following important factors, along with those discussed elsewhere in this report and in other filings with the Securities and Exchange Commission (SEC), could affect future results and could cause those results to differ materially from those expressed in the forward-looking statements: • the effects of competition in the markets in which we operate, including the inability to successfully respond to competitive factors such as prices, promotional incentives and evolving consumer preferences;" --- (VZ, sec filing, 2024/Q1)

Financial Performance and Growth Metrics

T-Mobile is projecting over 30% revenue growth this year, supported by a strong financial profile with 40% growth and positive free cash flow. The company emphasizes balancing long-term growth potential with profitability, aiming for a solid financial foundation as it moves forward.

"It's still up to $60 billion. And is there any change in timing or magnitude as you look at the performance in the second quarter and how much is left over the next, call it one and a half to two and a half years, if you are looking now at ’26 to get to the destination?" --- (TMUS, earning call, 2024/Q2)

"We're expecting over 30% revenue growth this year, one of the fastest growth rates in public markets once again, combined with a charge towards profitability." --- (S, earning call, 2025/Q1)

"Dave Bernhardt: Yes. I would add to that. In the end, we're just weighing on long-term growth potential with delivering solid, responsible, and profitable financial profile." --- (S, earning call, 2025/Q2)

"Our elective investments weigh long-term growth potential with delivering a solid, responsible, and profitable financial profile." --- (S, earning call, 2025/Q2)

"Ending up this quarter with 40% growth and basically breakeven or 18% positive free cash flow as a Rule of 58 company. I think this is a tremendous profile." --- (S, earning call, 2025/Q1)

Impact of Regulatory Changes on Growth

Regulatory changes significantly impact T-Mobile's growth strategy, as evidenced by ongoing transactions contingent on approvals. Competitors like Verizon and AT&T highlight revenue increases from regulatory surcharges and improved cost management, suggesting that navigating regulatory landscapes is crucial for market positioning and customer attraction.

"Other revenue increased during both the three and six months ended June 30, 2024 compared to the similar periods in 2023 primarily due to: • an increase of $46 million and $79 million for the three and six months, respectively, driven by regulatory surcharges, primarily related to higher net Federal Universal Service Fund surcharge rates, along with an increase in other regulatory surcharges; and • an increase of $29 million and $61 million for the three and six months, respectively, related to device protection offerings primarily due to pricing actions and changes in the products offered." --- (VZ, sec filing, 2024/Q2)

"And so we're getting better every year at mining out those costs. We continue to make progress on the regulatory front." --- (T, earning call, 2024/Q2)

"The transaction is expected to close in 2025, subject to customary closing conditions and regulatory approvals." --- (TMUS, press release, 2024/07/24)

"So, you know, my fundamental point of view is once the economics and the regulatory structure starts to move out of the way, the customer is going to go that direction." --- (T, conference, 2024/05/21)

"With this transaction, EQT Infrastructure VI is expected to be 35-40% percent invested (including closed and/or signed investments, announced public offers, if applicable, and less any expected syndication) based on target fund size and subject to customary regulatory approvals. Cautionary Statement Regarding Forward-Looking Statements" --- (TMUS, press release, 2024/04/25)

Customer Retention Strategies and Loyalty Programs

T-Mobile emphasizes the importance of churn rates as key indicators of customer retention and loyalty. They leverage existing loyalty programs to reward customers, while also considering strategies like limited trial periods to address customer dissatisfaction and enhance retention efforts.

"We believe that churn provides management, investors and analysts with useful information to evaluate customer retention and loyalty." --- (TMUS, sec filing, 2024/Q1)

"And do you have any specific programs in place to target Crowd customers who are potentially upset following the outage, like anything like a free six to 12-month limited trial period to ease the transition costs or just anything else that you're doing that could maybe help you leverage the situation? Thank you." --- (S, earning call, 2025/Q2)

"Thank you. John, can you talk about how you're balancing the marketing and sales budget today between customer acquisition and retention and how that's driving AT&T's performance relative to your competitors?" --- (T, earning call, 2024/Q1)

"These companies can also leverage their existing loyalty programs and member benefits to further reward their customers." --- (TMUS, press release, 2024/07/18)

"And do you have any specific programs in place to target Crowd customers who are potentially upset following the outage, like anything like a free six to 12-month limited trial period to ease the transition costs or just anything else that you're doing that could maybe help you leverage the situation?" --- (S, earning call, 2025/Q2)