T-Mobile US, Inc. Q3 FY2026 earnings call

• Leadership Changes: Welcomed Jessica Uhl as CFO-designate and Chris Sambar as Chief Enterprise Officer, signaling a long-planned succession and strategic expansion in enterprise sales.
• Network & Technology Leadership: Maintained industry-leading network performance, with median speeds 60-70% faster than top competitors. Named global winner in 5G coverage by Opensignal for all years program existed. Completed world's first AI-RAN call in Bellevue.
• Physical AI & Kinetic Edge: Partnered with AWS to build 'Kinetic Edge,' a distributed intelligence infrastructure combining 5G Advanced network with cloud orchestration. Moving beyond connecting robots to delivering intelligence via edge compute, aiming to scale physical AI from demos to production.
• Customer Experience & Digital Transformation: T-Life app reached 32 million monthly active users. Over 80% of upgrades and 50% of activations done digitally. Launched 'T-Mix' portfolio to allow customers custom control over plan benefits, addressing pain points around rigid carrier structures.
• Enterprise Growth (TFB): 17th consecutive quarter of positive ports. Won Department of Justice wireless contract after rigorous testing. Recognized by J.D. Power for customer satisfaction in large and small business categories.
• Broadband Momentum: 5G FWA tracking well ahead of pace toward 15 million customers by 2030. ARPU growing sequentially and YoY. Fiber business scaling with ~20% penetration and accelerating growth, targeting 3-4 million customers by 2030.

The transcript does not provide a detailed breakdown of financial performance by specific product segment (e.g., Wireless vs. Broadband) with absolute revenue figures and percentage contributions for Q3 2026. Management highlights that postpaid service revenue grew 9% year-over-year, total service revenue grew 6%, and core adjusted EBITDA grew 11%. Postpaid net account additions were 274,000. While broadband (5G FWA and Fiber) is described as a key growth component with strong momentum and ARPU growth, specific dollar amounts or revenue percentages for these segments are not disclosed in the provided text.

• Account Additions: Full-year postpaid net account additions expected to be approximately 1 million, exceeding industry trends.
• Service Revenue: Full-year service revenues expected at approximately $76.8 billion, representing 8% growth.
• Postpaid ARPA: Full-year postpaid ARPA growth expected at approximately 3.5%, up from previous guidance of 2.5%-3.0%, driven by premium plan adoption and rate plan modernization.
• Postpaid Service Revenue (Q4): Q4 postpaid organic service revenue growth expected to be approximately 7% year-over-year.
• Core Adjusted EBITDA: Full-year core adjusted EBITDA expected between $37.35 billion and $37.45 billion, an upward revision of $100 million at the midpoint.
• Cash CapEx: Full-year cash capital expenditure remains unchanged at approximately $10 billion.
• Adjusted Free Cash Flow: Full-year adjusted free cash flow expected between $18.7 billion and $18.8 billion, an upward revision of $150 million at the midpoint.

• Competitive Pricing Pressure: Industry-wide increase in subsidies and device pricing may pressure margins; management notes variability in Q4 due to staggered iPhone launches and OEM price increases.
• Churn Dynamics: Postpaid churn is expected to rise seasonally in Q4 due to holiday promotions and the inclusion of higher-churn broadband-only accounts (FWA/Fiber) in the postpaid base following U.S. Cellular integration.
• Execution Risks on New Initiatives: Physical AI and Kinetic Edge are in early stages; commercial models are evolving, and success depends on scaling infrastructure and customer adoption.
• Spectrum Auction Uncertainty: Future spectrum auctions (2027/2028) involve significant capital allocation decisions; management warns against paying uneconomic prices for spectrum despite the need for capacity.
• Regulatory/Policy Changes: Dependence on FCC auction pipelines and regulatory approvals for new spectrum bands (C-band 2.0, 2.7 GHz) which impact long-term capacity planning.

Q: Craig Moffett asked about FWA momentum and postpaid phone churn metrics given industry deceleration elsewhere.

A: Srini Gopalan stated FWA shows continued strong momentum, tracking ahead of the 15 million customer goal, with rising ARPU and category-leading NPS. André Almeida confirmed industry-leading FWA net additions. Peter Osvaldik noted they focus on account-level metrics rather than phone-specific churn, which performed as expected.

Q: Kutgun Maral inquired about the monetization model for Physical AI/Kinetic Edge and whether T-Mobile sells connectivity, compute, or solutions, plus funding responsibility.

A: Srini explained early monetization is solution-based, reducing device costs by offloading compute, allowing T-Mobile to charge for the integrated solution. He emphasized T-Mobile is building the necessary 5G SA/6G infrastructure and is in pole position. John Saw added that AI-driven spectral efficiency gains exceeded expectations in field tests, promising better user experiences without immediate massive new spectrum needs.

Q: Sam McHugh asked if T-Mobile would consider an MVNO deal with SpaceX for consumer satellite or Edge Mobile Compute services.

A: Srini firmly rejected the idea, stating their MVNO philosophy requires incremental TAM or distribution access, which satellite does not provide given FWA's superiority in dense areas. He sees no role for an MVNO in Physical AI either, as T-Mobile is leading its own 5G Advanced/6G capabilities, viewing any SpaceX relationship purely as a commercial customer/vendor agreement, not a partnership.

Q: Sean Diffley asked about the competitive landscape in Q4 and whether T-Mobile should accelerate share buybacks given the stock price versus spectrum acquisition needs.

A: Srini characterized the market as a multi-variate balance of volume and value, enabled by network differentiation, noting Q4 variability due to iPhone cycle and device prices. Peter Osvaldik outlined capital allocation priorities: leverage management, core investments, spectrum, then shareholder returns. He indicated that upcoming 2027/2028 spectrum auctions will likely consume more of the capital envelope, prioritizing long-term network value creation over accelerated buybacks at this time.

Q: Kannan Venkateshwar asked if ARPA growth is structurally driven by family/multi-line shifts and if satellite could help relieve spectrum capacity constraints.

A: Peter clarified ARPA growth is driven by premium plan adoption (60% of new lines), deepening relationships (FWA/fiber), and port-in ARPUs being 20% higher, not just line count. Srini reiterated they do not see synergy between FWA and satellite for capacity relief, viewing satellite only as a complementary resale product (T-Satellite) for deep rural areas, not a substitute for terrestrial capacity.