T-Mobile US Inc (TMUS) 0 Q0 法說會逐字稿

(Video playing) Nobody has been changing as much in the industry and nobody has been as vocal about it as John Legere, the CEO of T-Mobile. So they just released earnings and here with us to talk about that in more is T-Mobile CEO, John Legere.

So, first of all, really appreciate you. I know you guys had to move a few things around to keep the commitment. So I appreciate that.

I want to set the record straight that when Ina invited me before and I agreed to come, and then they moved earnings on me. An earnings was set to tomorrow morning in New York. And so I contacted Ina and -- remember there was -- if you were following the program, there was like two days where my picture wasn't there, it's because we couldn't figure out what to do and purely for the two following reasons. One, I love Ina. And two, Kara scares the shit out of me, still totally scares me to death. What we were able to do is also fun. And earnings, I really earnings at 6 o'clock, so I could talk here, otherwise known as, my Company put them out, because they knew I'll talk about them anyway and go to prison. And then we're doing an Uncarrier earnings call, which is -- have you been to earnings call where they just babble on about that script and it really is boring and crazy. So what we did is we broke that down and hand it out and then tomorrow morning at 8 o'clock here, we're having a Twitter Call, which is the Uncarrier earnings call.

So if you don't get enough of them tonight, there's more tomorrow.

Yes.

But certainly, I hope by the end of the night you're scared shitless of both Kara and I, but we'll see. And [Walt] too, but I think -- so really short, Twitter showed on your earnings basically you added a bunch more subscribers, but you also shifted to a loss. So is adding these new customers coming at a cost?

Listen, we absolutely kicked the shit out of the industry. The headline of the earnings is Q3, we added 2.35 million additions. We've added 10 million customers in six quarters and 6.2 million so far this year. What we did this quarter is service revenue grew 10.6% year-over-year. By the way, records all the way down. 1.8 million branded nets, 1.4 million postpaid nets, 1.2 million postpaid telephone nets. Just a little math on this side. AT&T did 350, Verizon did 411, Sprint announces next week. Don't hold your hopes up for a lot of adds there. So we're kind of twice as much as the rest. An interesting little piece in the middle, 411,000 positive prepaid nets. Do the math, minus 140 for AT&T, that's that 8,000 cricket commercials you see, 9,000 for Verizon. I think that adds up to a negative.

And if you look at their earnings release, you will see in their slides, you'll see all this stuff. If you flip 5, 6, 10 pages deep, you do get to the balance sheet and it says net loss, where last quarter it says net income.

The biggest driving variable to look at in our Company is EBITDA and I would need to drive earnings per income [flat].

EBITDA, which if you're not super financially savvy, that's how much they made before pink converse, Macklemore tickets, [Magenta] --

That's right, EBITDA. By the way, $74 custom-made, even with the T-Mobile CEO on the side, T-shirts free, but I can get them to all of you for cheap, as long as you join Simple Choice Unlimited Plan. The EBITDA for the period, we exceeded net adds consensus by 410,000 just for this quarter. But what we did is we gave guidance -- updated guidance for the year. We raised our postpaid net adds to 4.3 million to 4.7 million for the year. That's up from when we started the year, the guidance was 2 to 3, but we kept EBITDA guidance as is.

So for the year, you guys expect to add more customers at no increased cost (multiple speakers).

What we're going to do is, originally we said, the guidance beginning of the year is that we would add 2 million to 3 million postpaid nets and originally we said that the EBITDA would be 5.7 to 6, was the range. We've raised that postpaid all the way up to 4.3 to 4.7 and the range for guidance was 5.6 to 5.8, we kept it there. So profitability. Average billing per user was $61.59, up 4.2% year-over-year. So the Company is doing very well, short and medium-term profitability is ahead of where we thought it would be.

And is the business you have today, from a financial perspective, we'll talk about scale in a bit, but from a profitability, can you build a profitable business at the way you're going about it?

There's a lot of things that I would love to talk about, the answer is yes. Even two to three years ago, I gave medium-term guidance that we would grow 3% to 5% revenue growth compound annual, 7% to 10% on EBITDA and 10% to 15% on cash flow, actually 15% to 20%. We are well ahead of all of those plans. In fact, analysts' outlooks for next year, I'm not going to get into 2015 now, but you can see that the revenue growth and EBITDA really starts to kick in. We've got plenty of cash on the balance sheet. We raised $3 billion a few weeks ago at very favorable rate. So the answer is absolutely yes. And the growth is sustainable.

So we'll talk more about the financials, and I'm sure throughout. But let's take a step back and talk about the business. You started this Uncarrier, big campaign over a year ago now has it been?

Yes, it's year and a half.

And you said this is a broken industry, we've got to fix things. Looking at it now (multiple speakers) well that's what I was going to ask you, what has changed for the positive and what still needs work?

Listen, when I -- and I won't take you through the recapturing. But the -- one of our best weapons is the ineptness of the industry and it continues and we can go -- and I'm not kidding. You guys know. It was 18 months ago when we went to 100% no contracts, so Uncarrier 1 was no contract, simplified pricing, equipment installment plans and that's back when the concept of telling you how much this thing cost was novel. By the way, Verizon needs that lesson again; you know, these free phones, all this -- all this crock of shit is coming back. That's -- two things have happened. So, we've done seven Uncarrier moves and the impact on the industry is fantastic.

Now, important for us, this is a very important piece. These Uncarrier moves, they are not programs, they are philosophical desires to change the industry, and every move solves a customer pain point. So what ends up happening is, when the industry adapts to what we do, that's great, because that was our goal in the beginning and our brand -- we did surveys, our surveys show this. Of the base of customers that we have in our business, if you survey ours and each of our competitors and you ask them what percent of you believe that your company is changing wireless for the better, 61% of T-Mobile's customers say that we are. Number 2 is Verizon, 39%. It goes down to about 12% for Sprint. And then if you survey the whole industry on that question, Number 1 by 5 points, 24% say that T-Mobile is the company that's changing the industry. Now that has brand value. And what we're starting to see is the switching pool is significantly desirous of moving to T-Mobile.

Are there more good customers out there, because there's customers and then there's customers and in your business bad debt went up a little bit last quarter. Some of those bad --

[Debt] went down. (multiple speakers). We'll forgive you, I know. Tim was here --

There is a cost in terms of debt to having -- the more people you bring in, are there more quality customers for you guys?

I'm actually -- there is a part of me that wants to play rope-a-dope with you, which is you are laying out all of the fear, uncertainty and doubt that Fran Shammo is laying out in the marketplace to try -- not that you're [a shield] for friend, but he's trying to deal with a fact that were kicking the shit out of them. And so what they're trying to say is --

I just want to make sure you're going to be around to do it for years to come. I'm looking out (multiple speakers).

What I am saying is -- what I'm trying to do, I'm kind of wondering if I should just tell everybody, oh no, now this is really hard, we have shitty customers. They're all coming over in [books]. They have no credit. I don't know how they can pay their bills. And by the way, the competitive dynamic is such that, oh my God, I don't know long we can keep this up with Sprint and their great prices. It's not true. Well, our credit -- the credit quality of our customers is the prime percentage of our EIP receivables and of our net adds, is about 55%, which is the highest for us it's ever been. And here is a fun factoid for people. Verizon is trying to shed a little fear, uncertainty and doubt. What's really coming from them to us is the low-end prepaid bad customer base. Ready? 93% of the customers that are porting from Verizon to T-Mobile are postpaid customers. (multiple speakers) typical, top, high end, you people with all the money. That's why we like you.

How many of you guys have switched to T-Mobile? Can we bring up lights for a sec? Not seeing a lot of --

How may will, if I give you a few hundred bucks? Okay, yes. Come on. T-shirt.

We've learned our card comes easy, they're just aren't cheap.

How about this? This is an interesting point. The prime percentage of the customers moving from Verizon to us is 77%. So it's raising our prime portfolio. So the answer is [yes], and once we get into competitors -- here's a factoid. (video playing). It's pretty good, sorry about that.

(inaudible)

It was Kim Kardashian video. 24 million followers, I'm one of them.

So let's talk about the competitive dynamic. So I think without a question the most interesting shift over the last few years has been you coming into T-Mobile.

Me personally.

You personally and the change in marketing. I mean it wasn't just you. You guys got a better network just ahead of you, Neville has been building.

It's totally secondary.

You've got the iPhone.

Yes, tertiary.

Okay, iPhone was tertiary. One of the interesting dynamics in the last few months has been a reenergized Sprint. So for the most -- for the first 15 months of Uncarrier, you guys were basically attacking AT&T and Verizon. Sprint was hanging with their family. Now they have come in and they -- you are saying we're going to be the value leader. They've come in with some really interesting stuff, leasing iPhones, some interesting changes to the economics. What are your thoughts about what it means to the market?

First of all, I never said we're going to be the value leader. I never stuck my pick into a lot of items that they do. And frankly, most of what we've done in the last year is actually raised price, from a standpoint of inserting another data tier. And here are some factoids. Porting ratio, postpaid porting ratios, this is how we track who moves to each other, it's a significant portion of how customers move between providers. In Q2, the overall porting ratio for us to the other carriers was 1.9. That was 1.6 for AT&T, 1.58 for Verizon, and 3.5 for Sprint. And we move to the quarter we just announced. The quarter we just announced, it moved to 2.2. That was 1.8 for -- 1.89 or 1.9 for both AT&T and Verizon. Sprint 3.6. Okay. Now it's October. So far for this quarter, it is 2.4. That means 2.4 people come to us for every one that leaves. The way that breaks down is fascinating. 2.2 to 2.3 AT&T, 2.2 to 2.3 Verizon, 2.5 for Sprint, which means that Sprint has moved from 3.5 to 2.5. Now people are still flying out the door from them to us, as if there is a fire sale going. So it's not exactly worthy of a task force.

Here's what I think is going on with Sprint and the industry will have to sort this out, and this could end up being one of the most ingenious strategies in the history of mankind, which is, you remember I pre-announced that we're going to beat Sprint by the end of the year. How much do you think that pissed off [Marcelo San] and what marching orders do you think that Sprint got about net adds. And now they've gotten very aggressive. Here is the best part. They've not taken them from us. They have taken them from AT&T and Verizon, if they've taken any. I don't know if they're getting any yet. But what's going to happen now is two or three issues that are big -- Sprint, yes, reenergized, Marcelo swinging the bat. Kim and I've spoken. I've told them I admire what he's doing. He's shaken things up a little bit. My advice would be twofold; don't forget your existing customers when you lay out plans for new customers, because it will piss them off and the porting ratio will still go. Don't do the trickery, don't try to tell people that phones are $20 a month. Tell them there is no residual value and you're not going to have it. But remember, your network flows and you know, it flows --

Now some would say those in glass towers.

Oh, come on. That network, they know. They know it's a year before it works. Now the problem is that they've gotten aggressive and customers are going to come in and they're going to spin. So that's -- the best thing that Sprint could've done is what they were doing before, if they could survive it, which is put up that sign that pardon us why [we re-decorate], right, because then if customers come in now and then they churn out, they'll never come back. Issue number two is, if your price for two lines and your price for 10 lines is the same price, how many people would you think in your store, or how many lines you think they're going to sell? How many of those users do you think are real? How many do you think are phantom? So what's going to have to spin.

So good aggressive, but let's not declare victory. And by the way, in the short term, the customers that are coming through to find out that the network doesn't work, they are not coming from us. If the whole industry wants to do what they've done last quarter, in the last two weeks, I'm good, it just keep, keep sending --

We'll get back to the dynamics. One of the things that's --

You want to beat up on AT&T?

No, no, I thought maybe we could talk about Apple. You guys -- it isn't that long ago and I'm sure many of the people in the room remember, T-Mobile didn't even have an iPhone. Now you guys are really big, big player in Apple's market. How has that iPhone 6 launch been, what surprised you about it?

Couple of things. So we had no iPhone and I made it clear that when I got here, one of the things that was first and foremost on the list is get the iPhone. In my strategy when I came over with Deutsche Telekom was, get on your knees, crawl over there, get the iPhone, do what ever the hell you have to do, because -- seriously, your store without the iPhone in it is shit. And before I took this job --

Somebody is counting, right, how many shit?

Before I took this job, I went and walked around stores as a customer and these kids were flabbergasted that we didn't have the iPhone. We needed the iPhone. Store traffic is through the roof. By the way, gross adds were up 46% year-over-year. iPhones are 20% of our smartphone base, though. And I think with AT&T it's like 50%. So we've got a lot -- and it's moving. We are disproportionately selling. Between the two, Samsung is still the biggest device that we have. If you read the articles last week, 20 million of AT&T's 75 million customers are not locked in yet. So as this iPhone plethora goes on, it's a great opportunity.

So you've got the 6 Plus there, right?

Yes.

Has that been a surprise?

Yes. I mean demand was through the roof. This was the biggest phone launch we've ever had at T-Mobile. And like everybody else, supply was constrained. So we're in that quarter where we got backlog customers, especially this 6 Plus was mind-blowing. The distribution between 6s and 6 Pluses were very skewed in a different way from the start.

I mean I think everyone expected the 6 Plus to be popular, but still a niche and I think people have been surprised on the upside for the amount of 6 Plus demand?

Yes, distribution wise. Overall demand for us was huge. We got hammered by it. It's very, very difficult to explain to customers why, because it'll be -- iPhone 6 backlog is starting to come down, but it's going to be a while for everybody before the 6 Plus backlog --

Can you say what the ratio of 6 Plus to 6?

I don't know what it is anymore. I mean, originally, I think we all thought it would be 75, 85 -- 75 or 80 to 20-25, but at one point, it was 55-45 or so. You know the selfie button, have you sorted that out? This is the most important thing you've got to learn at this event, okay? You never know this, right, but unannounced that if you are taking a selfie, the down volume button takes pictures.

He slices and dices too. So, one of the other things that Apple is doing that's really unique is the Apple SIM. For those of you who don't know that, I think most people have picked up on this. With the newest iPads, not much actually changed about the iPad, but one of the things that did change is the SIM card they're putting in, at least the ones that they sell in their stores, let you choose, T-Mobile, AT&T or Sprint. Verizon decided not to be part of that. What do you think that says for the industry?

You are so kind. You are very kind. Did anybody see my Tweetstorm? I thank Marc Andreessen for that, because I'm not the first one that thought 20 part tweets were -- here's what happened. There is a big lesson here and I know when the iPad Air 2 and the mini 3 came out, again, there was a lot of confusion. Apple didn't announce the soft SIM, it wasn't part of the -- and then of course, it started to appear in the stores. I am going to tell the story for two reasons. One is, because it's part of who we are as a company that I challenge anybody to be, but it was Friday night, it's like 10 o'clock and I'm -- I'm either on my balcony of my apartment, or I'm down the Blue Martini having a beer, and I'm on the phone, first with Dave Carey, Mike Sievert and Neville Ray, 10 or 11:00 PM. And we're dealing with an individual customer on Twitter who is blogging about this craziness associated with the confusion around what's happening in the Apple stores and they started accusing T-Mobile of locking there SIMs. So what I did is, I said, you know what, I'm going to educate everybody as to what the hell is going on with the soft SIM. No position, just facts.

So here's the factoids. There was a lot of carrier backroom negotiation going on and compromise before that came out. And so we just rolled out and I think the kind of things that happened in the wireless industry, if somebody didn't say, you know, look what the (expletive) going on here. Then what would have happened is nobody would've gotten this. And here's what happened. When you go into an Apple store -- first of all, Verizon said, I don't want any part of the soft SIM. You guys do whatever you want, but we're not playing. AT&T said, okay on the soft SIM, you can put us as one of the choices, but if you choose us, we're going to switch it, so that it never works with anybody else again.

To be clear, the phone can still be switched, but you need an Omni SIM Card.

This is even better. If you don't switch AT&T, they shut it off, such that you can't come into them from somebody else. But you can pick T-Mobile, AT&T or Sprint and then if you pick T-Mobile, for example, you can unpick us later. So it's a switchable SIM. Now in the device that comes into the stores, designed for carriers, Sprint has their own SIM put into it. Verizon has their own SIM, AT&T has and T-Mobile, Apple decided to send the soft SIM in our devices, but pre-coded to us as the carrier, because the assumption was -- so that confusion in the marketplace was crazy. The good news is this is very cool thing. So my advice, which will get me in trouble with everybody, until this settles down, buy in the Apple store. You go to the Apple store, you maintain complete flexibility. And then for five -- you get 5 gigabits for five months for $10 on T-Mobile.

You guys are really good at the (multiple speakers). So is the Apple theme a good thing, would you like to see phones sold this way?

Listen, right now I've got about 16.5% market share. And I've got a highly competitive -- nation's fastest 4G LTE. I want to be able to compete for -- I don't do contracts, I don't do trickery. So let's start with this iPad. I love the ability for you to be able to push that button, try T-Mobile. If we don't work, try somebody else.

And you guys are doing this with an iPhone. T-Mobile has this program, one of its many Uncarrier moves. You get basically a free iPhone. I think it's been a 5S. I don't know if it's changing to a 6.

Test drive, yes.

And you get to try out their network, try out the device for a week. When you announced that you said we're going to do a million of these, how many have you guys done?

I don't know how many we've done and we did learn on the way out, because it's free. Right. But what we did learn in the beginning is that customers would come in and even though it's free, their credit card was being held for the amount of the phone. And there is an incredible amount of customers that don't -- they are using a debit card, they don't have $600, $700 on their card, so we learned kind of slowly, and now the confusion is, it's the 5S. So now people want the 6. And I think that's what's -- But it's good two ways.

Have you done hundreds of thousands of them or --?

I don't know. We offered a million. No, I wouldn't say hundreds of thousands, a tens of thousands. It hasn't been as fast, but here is the deal, it's good two ways. It's good we want to try an iPhone, it's good if you want to try T-Mobile, it's good if you take it home and it doesn't work. Remember, what I'm trying to do, this is in Uncarrier move. It's a philosophy. It's not a program. It's permanent and it solves a pain point. What's the pain point? We think every customer should be able to test drive a device before they buy it. So I want this to be everybody, I want it to be all devices, I want it to be all carriers.

So we're going to open it up in a [sec] for questions, but I want to ask a couple of questions about you, you're a big personality. I can't imagine, where did this sort of personality come from? I can't imagine when you were running Asia Global Crossing, you were going, oh, Cable & Wireless, their fiber is terrible, when did this start?

Listen, most major corporations are paramilitary hierarchies. And the way you -- there is a prescribed way -- like I wouldn't advise to young MBAs that are second level managers at Microsoft that you should go in tomorrow with a T-shirt and tell everybody what you think, because there's a hierarchical way that you get to. Now for me -- so yes, I mean I had to play a certain structural way. But when I got here in a turnaround situation, this is more about what you get done, as opposed to how. And I've eased into the fact that I'm more like my customers and employees, and the engagement with them has helped. It's helped my business, and frankly, I am at the stage of (inaudible). So at this stage of my career, if they don't like it, I don't give a shit. But frankly, I think it's working. Now you know, because you do the same thing I do. I basically have no life. And what I do -- I do every night, I talk and try me. I talk to thousands of individual customers and employees every minute of the day and that's who I am, that's how I run my Company, that's how I play and I think frankly they like it and it does equate to shareholder value. So I am having fun with it.

Cool. Are there some questions?

I dare you.

Because I have few more in mind, but I want to give you guys a chance.

I'm going to go back to -- how many of you use T-Mobile? [Several about]. Are the rest of you stupid? How many of you use Verizon? You're all rich. I think that's -- you don't give a shit how much you pay them? How many of you use AT&T? Do you really? You must be that 20 million that's not locked in. Did you get your first iPhone in AT&T?

Okay, it's (multiple speakers).

Do you hate AT&T, you in the back here, raise your hand? Worst experience with them or what? Here there you go. How many of you are somewhat discontent with AT&T? Yes, there you go. Come on.

Alright. We are going to move to the segment of audience Q&A, where the audience get to ask you questions.

So, [Greg Khan from Brenner], and that's a good segue into my question. I am actually discontent with all the carriers and I admire your innovation, but a lot of it seems to be very much kind of in the spirit of a zero-some game with the other carriers in terms of how you're slicing up the pie of all the consumers out there. Meanwhile, you have over the top -- well, over the top apps are competing for attention, WiFi calling and [unlicensed] spectrum are competing for attention and other than contract and pricing and reducing switching costs from other carriers, what kinds of innovations is T-Mobile doing to make the fundamental experience of using a mobile phone better?

Okay. Two or three things. First of all, let's just start with some of that stuff sounds really simple, right? But who's the only group that allows all their devices to be used on WiFi calling. So what we're trying to do is we're trying to let technology do what it's supposed to do and get all that gate keeping, but that's what this soft SIM (expletive) is about. Come on, it's a flexible SIM in the device that lets you pick carriers. So most of what I am trying to do is change the game associated with the rules of treating customers, make it transparent and let these applications find their rightful place.

Now, outside of the what else you are doing, so far, not all the way, we announced this evening, we cover 250 million POPs of LTE. We're deploying 700 megahertz spectrum as fast as we can, we're putting LTE in the 1900 band, wideband LTE, we set a new goal of 300 million POPs of LTE by the end of 2015.

Now I get -- the gig here is that once there is competitive complete ubiquitous coverage from multiple carriers that (expletive) of being the safe choice, where somebody can gouge you goes away. And so, part of what I'm trying to do is not just a lead in innovation and price, but to get the network and the customer care to be a world-class experience, so that we can have real competition.

T-Mobile switcher, I want the T-shirt.

Yes, I'll give you one I got of you.

The question I have for you is how much of T-Mobile is the network and how much of T-Mobile is John Legere? I'm looking like three years down the line.

It's all John Legere, completely.

You had the conference saying that you went to Deutsche Telekom, you put on the (inaudible) it's all because of me. Is T-Mobile John Legere?

No. Listen that's -- come on it's a stick for me to a certain extent to say these kind of things, just because it's different and it's interesting and you got to admit. Me and Deutsche Telekom today together is fascinating. I know Kim Kardashian got 10 years running on a reality show. I got her on this one. I mean (multiple speakers)

Lets talk for a second about that reality show. How realistic is it?

Can I finish that one?

Yes, for sure.

What I said when we started this game, because remember when I started this game, we had no iPhone, we had no LTE, we were losing 2.5 million subscribers, we had no brand, we had to re-launch it, we were a subsidiary of Deutsche Telekom with no autonomous control. And what I said is, I told my team, in one year when the dog catches the bus, this network better hunt and this customer care experience better be differentiated. Now you will have debates all the time about the network experience and all I'm trying to do is get people to try. So there is a real differentiated network care team -- networking care team. And by the way, I defy you. My employees are different. I treat them different, every one of them are shareholders. They know we run the Company, the experience in the store is different. And so it is, it's them.

I want you to talk a little bit about that feature. Is the John Legere show, like is that several years running like -- not for you but for T-Mobile as an independent company, you've talked a lot about this that there is a lot you can do in the short term and in the long-term scale and more spectrum would help. For a while, you guys were talking with Sprint. That didn't seem like it was going to happen for a while. It sounded like you might have to learn French, but -- then [Elliot] -- Deutsche Telekom said no. Is this independent long term?

It is the most important part. My strategy in the beginning and still is now is to have two separate and simultaneous successful paths, organic and inorganic. The ability to stand alone, gain share, fund your business and take share gradually over time, and/or to inorganically create scale and/or migration on the value chain by partnering with other people. The trick though is to make sure that when you are going into a potential partnership or transaction, you're not going in like a white flag when AT&T bought Cricket or something, which is, you're just picking somebody off it's debt. Come on, every transaction in the wireless industry for the last 10 years has been somebody debt being bought by somebody else. They say it's great, but they take the spectrum, (multiple speakers).

The MetroPCS.

Metro was not going to be a standalone business. They needed -- by the way, want an update on that, this is really cool. The net synergies to the Company at the time we shut down Metro's network is $1.5 billion to the Company. As of right now, 84% of MetroPCS customers are no longer on the MetroPCS network and 63% of the network has been re-farmed and what was about 8.5 million customers is now 10.5 million and growing with an ARPU of $37.92.

So that's a great -- that's a very different weight, standalone brand, most people don't even know we own them that they just got to be a lot faster. So to your point, Ina, there were some amazing potential come to you. If we had time to talk about wearables and the evolution of the industry, content distribution, you can see where a company who has got 4,000 stores of their own branded [Magenta], 11,000 doors of MetroPCS who's growing 10 million customers with a brand that's highly valued, could be a very good interesting partner or vehicle for a lot of other consolidation in the industry. And that's path number two, which I'm wide open to.

Are you frustrated that the FCC doesn't see an opening for consolidation?

That's a highly complex topic. And it had to do with auctions that have now been slid out and the desire for real competition and frankly that's an agenda of the current FCC Chairman. You can argue. I mean, look at right now, there's a lot of competition, consumers are benefiting. But in the long run, AT&T and Verizon are $250 billion worth of revenue, which is larger than the GDP of Denmark and Portugal. They control about 80% of the profitability in the industry. That's not good. But there's a lot of other questions and I still maintain that five years from now, we will be asinine, we will think crazy and asinine that we thought that AT&T, Verizon, Sprint and T-Mobile were the current and future industry. I mean there's just too many other players who are going to come into this space and how it's going to merge together and we're going to be a piece of it. Five years from now, there'll be at least three other big players playing in this [area].

And do you think these will be carriers moving in from overseas or companies that we don't even think of as carriers coming in?

Who knows what's -- it's a highly competitive space. But look, in the last six months, Amazon entered the phone business that went really well. Microsoft is tangentially doing an awful lot of things on the device side, but interesting to see where they go, where does gaming go, how does that play together, because you know they are in that space. Apple playing in the soft SIM space. What's Google going to do, there is rumors out there that they're going to go play MVNO etcetera. So there's a lot of players and then you got Telmex playing around. You've got a lot of (expletive) going on.

Have you talked to Charlie Ergen at all? He's got a lot of spectrum.

I don't know, who is that?

All right, this guy has been waiting for a while.

Phil Goldstein from FierceWireless.

There you are.

Yes, here I am.

You wrote a lot of stuff in the last day. This morning I said -- I read everything you guys do, gets on Twitter, I forwarded out to my team. And there was two or three great ones there, brand, loyalty (expletive) that you guys wrote, Phil. That was --

Wasn't me, it's my boss, but she is great. Anyway, so you talked a little bit about the network. T-Mobile markets, its network is being data strong and in terms of megahertz per customer, you guys are doing great. But the reason that AT&T and Verizon right now cover 50 million more POPs with LTE than T-Mobile does is because they have 700 megahertz spectrum, they have this low band spectrum. So T-Mobile has been going after 700 megahertz A-block, you guys are also advocating quite a lot to get as much 600 megahertz spectrum as you can in the broadcast auction. So how do you reconcile those two things? Is the network data strong, but only where you guys have coverage?

And I -- and Ina's clock is going down, but just some things to think about. The reason we are talking about this data strong is the time period of these maps, where everybody shows this one color distribution is bullshit, because what that is, is our cake. It's way you can make a voice call. So if you can make a voice call somewhere it's red. Right. So what we started to do is, if you look at our commercials, it's a vertical 3D look, so it's how strong is the data capability at where in the country. So that's what we need to take a look at. The 700 megahertz, yes, we're in the middle of trying to do that, Channel 51 interference was something we're looking forward to. In the short term, though, one of the interesting things that you saw, I think you wrote about this too. So we got a slight delay in the auctions, but you've got the FCC down there that knows that we got to do something to help these guys out, because this competition is really good. So maybe there'll be a potentially preferential ruling in Washington associated with roaming prices, which will be a short-term way for us to do that. But right now, what we're doing is we're moving every inch of 2G or Edge capability in the United States to 4G LTE on the 1900 band. And that will be done by the middle of next year. So you start to get out to 280 million to 300 million, and in the short term what we did with the personal sales spot and some of the in-building stuff, changes some of the in-building penetration, which is the other issue on the low band spectrum. But there was a lot in there, it's how we can answer it.

Well, unfortunately we have to leave it there. I very much appreciate your coming. I know it's hard for you to get out of your shell, you're really shy. So I appreciate you opening up with the group. And thank you so much.

Perfect.