Good afternoon. Welcome to the T-Mobile Second Quarter 2020 Earnings Call. [Operator Instructions] I would now like to turn the conference over to Mr. Jud Henry, Senior Vice President and Head of Investor Relations for T-Mobile US. Please go ahead sir.

Good afternoon and welcome to T-Mobile's Second Quarter 2020 Earnings Call. With me today are Mike Sievert, our President and CEO; Peter Osvaldik, our CFO; Neville Ray, our President, Technology; Matt Staneff, Our Chief Marketing Officer; and Janice Kapner our Chief Communications Officer; as well as other members of the senior leadership team joining us remotely. During this call, we will make forward-looking statements that include projections and statements about our future financial and operating results, our plans, the benefits we expect to receive from our merger with Sprint, our business and operations in light of COVID-19 and other statements that are not historical facts. Such statements are based upon the current, beliefs and expectations of our management and are subject to significant risks and uncertainties outside of our control that could cause actual results to differ materially, including the risk factors set forth in our filings with the SEC. Reconciliations between GAAP and the non-GAAP metrics we discuss on this call can be found in the Quarterly Results section of the Investor Relations page on our website. Also, I want to point out that our comments related to Q2 2020 reflect the combined results of new T-Mobile’s unless otherwise noted. The prior period results and earnings materials that accompany our Q2 results represent the standalone T-Mobile prior to the merger with Sprint. While we do provide some unaudited pro forma historical financials on a supplemental basis, they are not directly comparable with the actual results for new T-Mobile in the second quarter and going forward, nor are they directly comparable with the previously provided pro forma financials that were prepared prior to the completion of final purchase price accounting and policy alignment issues. We are not providing pro forma historical customer base metrics due to the inability to repose its historical activity under all new T-Mobile subscriber policy. As such, we will focus our comments on future results and the comparable forward-looking guidance as the best way of looking at the business moving forward. With that, let me now turn it over to Mike.

Okay. Thanks Jud, and hi to everybody listening in or watching online. We are coming to you live and socially distanced from here in our Bellevue headquarters. So I am pleased that nice to be back in the office for once given if we are behind this huge flexi glass panels and sitting 10 feet apart. First of all, let me just say, thanks in advance for your patience, because my upfront remarks will be just a few minutes longer than usual today given that this is our first quarterly report for the new company and there is a lot to cover. I promise I am not filibuster. Q2 was our first quarter together and what a quarter it was. I am incredibly fired up about everything this new combined team has accomplished since we last spoke in May and I am more excited than ever about the future of T-Mobile. We have already hit major milestones in record time and made significant progress on integration and we did it while achieving incredible business results for the quarter. We know, that very quarter our competitors were telling you we’d be too distracted by the merger to execute, yes, that’s what. So let me start by saying this, we kicked off the quarter by achieving something nobody really thought possible just a short time ago. Our total branded customer accounts surpassed AT&T, making us the number two player in wireless at the beginning of the quarter. This monumental milestone in U.S. wireless history was a historic achievement for all of us at T-Mobile. And even better we haven’t looked back since. We have no intention of slowing down. Our lead versus AT&T is even wider as we talk to you today. In Q2, T-Mobile once again led the industry in total…

Alright. Thanks, Mike. I couldn’t be more excited to lead as CFO during this critical time for the business. We have an incredible all star leadership team and I feel privileged to be working alongside each of you. We’ll continue to execute on our proven playbook and unlocked incredible synergy potential of this merger for the years to come. Before we get into the financial details, I wanted to cover off on a few points which lay the ground work for our reporting. First, we aligned the legacy Sprint and T-Mobile subscribers to our go forward new T-Mobile policies. The net impact of these changes as outlined in more detail in our investor fact book and 10-Q resulted in a net reduction in total branded customers 14.1 million as of April 1, as compared to the standalone balances previously reported for Sprint and T-Mobile as of March 31. The biggest adjustment was the removal of $9.2 million customers associated with the DISH divestiture including 963,000, which have been classified as postpaid phone customers in the previously reported Sprint figures. The adjustments also included approximately 40 million subscribers associated with reseller arrangements which were reclassified from postpaid to wholesale. And recall, that we no longer report wholesale subscribers rather focusing on wholesale revenue. It is important to remember that these adjustments have more net impact on profitability. In addition, we are providing disclosures around the various impacts from purchase accounting and policy alignment in our 10-Q, but in the interest of time, I won’t get into too much detail right now. Okay. Now let’s get into some of the financial details of the second quarter. Note that during this quarter, our pretax financial results were impacted by merger-related costs of $798 million, COVID-19-related costs of $341 million, as well as non-cash…

And operator, I would like to just point out that in honor of Rich Greenfield and everybody at light shed, we will only be taking questions this quarter from people that begin their question with a phrase, great quarter guys. Just kidding. Operator.

[Operator Instructions] First we’ll go to Phil Cusick from JPMorgan. Your line is open.

Hey guys. Thank you. A lot of things to ask about, but I think the number one as I am talking to people here is on the second half guidance. The $12.4 billion to $12.7 billion, can you help us bring that back to what I would have considered a – like a historical T-Mobile cash EBITDA without EIP benefit and submitting out of a lease benefit?

Peter, why don’t you start? And it’s really, it’s really about backing out the lease revenues. If you want to look at what kind of – what we call core EBITDA, not so much for yield.

I am sorry.

Yes, yes. Absolutely. And let me begin with, obviously, the second half guidance is also reflective of increased gross adds from SG&A, right. And that’s both from a seasonal uptick that we expect as an industry in turn which is typical from Q3 to the second half, but also as a result of the COVID-19 cost, $300 million that were excluded in Q2 that again will become part of the normal runrate. And then, you have the leasing revenues, as you said, if you wanted to the core adjusted EBITDA.

Okay. So that $10.1 billion to – or $10 billion to 10.1 billion or so, that’s what you would consider to be sort of a cash EBITDA number the way T-Mobile used to operate?

Yes, the way we use to operate, right. Nothing has really changed in terms of how we think about this stuff, right. So, we have adjusted EBITDA and then you have leasing and lease revenues get backed out, to get to this more operational view, adjusted EBITDA is what we focus on and guide on those. So it’s important that you understand that and obviously bringing in Sprint, there is a much bigger leasing component. And so the differences between the two are greater, now that we’ve merged.

Yes. And that’s the second thing I wanted to ask was, historically, Sprint did a lot of leasing. T-Mobile tried it and it didn’t seem like you guys liked it very much. Should we – it looks like from the guidance we should expect you to continue to be leasing the phones in a pretty substantial way at least through this year, how do you think about that offer?

Yes, I mean, I’ll start and I’ll ask Matt Staneff to jump in. Phil, it’s not that we didn’t like it. It’s that our view is that, it hasn’t always been demonstrated to add to enterprise value. And because the customer satisfaction isn’t there and then you cost later on as a result. So, but it’s a tool in the toolkit. We’ve always done some of it. I think, it depends on how it’s done and we are open to it. The guide doesn’t necessarily imply any big change, obviously. So, leasing revenues come from the runrate that is informed by the customers already in the base. But, Matt, other thoughts about financing in general and how we think about it?

Yes. That’s great. So, as Mike said, we are going to continue with past day one. Right now, we’ve got our new proposition in the market largely it’s T-Mobile the way it was before. The one thing we do that we have a Sprint customer base and we are very aggressively taking care of those customers, now watching and managing their churn helping us. A lot of them are on lease upgrade offers. And so, what you can expect over time obviously is we are not going to take away seeing some customers that could potentially increase churn. We are going to continue to serve them. And so, that’s part of what you see in the leasing mix as we got options available, the T-Mobile options that we are still going to take care of for customers. And so it will be kind of more of a gradual change in the total mix versus what we are doing for new customers with that.

I appreciate. Thanks.

What we’ll do over – but right now, as you know, we ask a one and therefore our main go to market for us to center ground. But we have all these tens of millions of Sprint customers and a lot of them make like leasing in one another lease device and we are happy to provide that. So, see that level.

Yes, got it.

Thanks, Phil.

Thanks guys.

And we’ll go to our next question, John Hodulik from UBS. Your line is open.

Okay. Great quarter guys. Actually I got two questions. First of all, the 80 bps I am sure that that was particularly sort of a bit of a surprise especially as Sprint a year ago had, I think 1.8% churn. So, what are you doing to bring that down so quickly, especially given all the integration efforts of the store closings and that kind of things? That’s number one. And then, number two, given the availability to 600 MHz spectrum, and the pent-up demand for new phones, are you guys looking at the launch of the iPhone in the fourth quarter as an opportunity to take share? And is that baked into the guidance in back half because I’d point out that you had $7 billion in EBITDA for the quarter but just expecting sort of $12 billion, $12.5 billion for the rest of the year. So, obviously, it looks like you are expecting that’s not necessarily to be the runrate, especially as we look out to the fourth quarter? That would be great. Thanks.

Understood. Matt, do you want to start on churn?

Yes. I’ll start on churn. 80 bps that’s a great number. It’s a great number to have in the first quarter. Now that we are together and the comparison is accurate. T-Mobile was among the leaders in the category and as you said, Sprint was in the high ones. I think the last 42 close to 106 and down 180 basis points. One thing to consider is, this was done in Q2 when covered with the Q. And we said the switch in flows were down. We were taking care of customers and then a collection - we’ve accounted for all of that. But Q2 is a bit of an anomaly and you’ve seen that across the industry in terms of what churn has done. We have been very hard at work. We’ve been talking about what we’ve done, getting the Sprint customer base access to the network. We’ve got 10 million customers kind of on a daily basis using the network. We could provide VoLTE with a much better experience and we’ve been hard at work giving value to the Sprint customer base. And taking un-carrier principles and deploying them pretty broadly across the base. So we are not predicting where churn will go. And like just Peter said, seasonally it’s going to be up a little bit and in the third quarter and we’ve put that into our guidance. And I can’t predict where churn will go, but what I can say is that things we need to get to where it was at 0.80 last quarter, we are going to keep doing and more of as we move forward.

And not to mention in addition, but the legacy T-Mobile side of things, which will be increasingly difficult for us, I am back for you because we are past day one now and where business going forward. But, the legacy T-Mobile’s side had a blockbuster low churn number. And so, blended in that also helps. So this is really gratifying. We have tailwinds on churn over the medium and long haul, because we know what drives it. We have seen this journey on the T-Mobile side from some of the highest churn in the industry to some of the best churn in the industry in its network. And where, I just got done talking at length about how no one is going to be able to catch us on network. So we are really excited and to Matt’s point, seasonally this year, there are going to be two dynamics. One, COVID-19, we think the impacts of it will start to abate which brings some normalcy back into the suppression this quarter, as well as what’s normal T-Mobile which is a seasonal uptick in the second half, all in against the backdrop of real exciting tailwinds. So, that’s the first piece. And the second piece you asked about was, kind of how to think about the second half and I will say, we have burdened our plan with the activations, we think are necessary to deliver the growth that we guided. And that means, we know that gross activations will up in the second half, why I just told you that seasonally and due to COVID, churn will be up and we’ll outrun that churn and the other guy’s churn will be up and that’s an opportunity for us. When the other guy’s churn goes up a little bit, that’s when we compete. You asked about phones. I don’t know. I can’t comment about phones. I really hope there is a well rounded 5G phone portfolio as we exit the year. And so, I’ll just leave it there and if there is, that would be a great competitive moment for us. So, hopefully, that helps, John.

Yes. Thanks, Mike.

And next we’ll go to Mike Rollins with Goldman Sachs. I am sorry, Brett Feldman with Goldman Sachs. I apologize. Your line is open.

Hey. Thank you for squeezing in. Hopefully Mike come next. I think, you need call this a good quarter. So congratulations on that. I want to talk about the integration. You expressed your confidence and the synergy targets that you had outlined in the release. All the commentary sounds like, you are just moving faster than I think we would have expected, when you first now at the field two years ago. And one of the questions will be, do we think we can start seeing the synergies come into your numbers more quickly, that would seem like you would be accretive to the NPV and also the integration spending that you outlined for the second half of this year, actually looks pretty modest considering that you had previously talked about spending $15 billion through the integration. So, that’s when you are going to win much more significantly as we move past this year, what would drive that, or are you actually at the point where maybe you are realizing there greater efficiencies associated with the integration as you get closer to execution on it? Thank you.

Yes. Let me start and then ask Neville to comment. First of all, I love the fact that some of the tower companies that are out there sort of spreading some disinformation about our pace. I just got them tell you we are in all the biggest cities in the country with 2.5Ghz 5G already. And we will be in thousands of cities and towns across this country as we exit this year with that layer gig. So, we are – that’s what where we’ll be running really fast. Reason it feels tough over there at the tower companies is because both standalone T-Mobile and Sprint were planning on lots of new sites. Sprint for coverage and T-Mobile for capacity. New T-Mobile has synergies, that’s called site avoidance and I know that’s tough, if you are a tower company, because millions and billions of dollars of site avoidance are just the kinds of comments you are now hearing. That doesn’t affect our rate and pace we are going like crazy. And you are right, there is not only speed potential which is NPV accretive, but look, the faster we get out in front of the pack on the demonstrable customer provable network leadership, the more of the operating results start to give us the potential to start talking to you about the magnitude of synergies as well. And the enterprise value created from outgrowing our competitors. So, Neville, why don’t you tell us a little bit about the rate and pace, because I know that’s on everybody’s mind?

Yes. I mean, thanks, Mike. I mean, we are moving at an incredible pace. I mean, I could not be more pleased with the progress that we’ve made in what’s a few short weeks since we combined with the Sprint team. And it’s on two fronts, I mean, we’ve been rapidly accelerating the breadth of this network, if I talk to the 250 million people now covered the T-Mobile’s low band 5G, 327 million of people covered with LTE too, right, and we are closing in on that opportunity for in our 5G footprint. So, that gives us the breadth. The depth comes from the 2.5 Ghz spectrum, the mid band slice that’s so important. And all I can say is, we are baking that cake super, super fast. So, to give you some idea and dimension that for you, I mean, as we get to the second quarter, every week, we were starting up great activity on about 600 sites per week. In the last month, that number has gone to 700 sites per week. So, you can all do that math that thousands of sites in a month and in the quarter and we are running very, very hard of having that mid-band layer of the network to this great opportunity. Mike outlined the experience and the speeds. To the earlier question about, 5G phones in fourth quarter, and we have a great line-up today, lots of great phones, great news from Samsung just the other day announced and we want to make sure that there is really only one 5G network that you would love to put a 5G phone on. And it’s from T-Mobile. The coverage is spotting your best from AT&T, nascent from Verizon and when you can combine great coverage with great performance and speed with mid band inside the fourth quarter, that’s going to be a complete game changer. So, great quarter. Great numbers. But we are only just getting started with this network roll out and the pace is phenomenal. Mike outlined, obviously, we are not building in all the places, but standalone T-Mobile and Sprint would have planned to and that’s good for this business, right. We are starting to generate those cost avoidance, site avoidance synergies at pace, real pace in the second half of this year and we’ll talk to those numbers more as we close out 2020. But tremendous progress underway and I couldn’t be happy of. Tower guys not so happy. We could be doing some more with the tower guys, but there is a competitive process in play right now and we have choices that we can make. So, I would fully anticipate that we will start more tower build as we move into the second half, but to be seen. That doesn’t slow us down. We have lots of options to build and we are building furiously.

And Peter, just very briefly on Brett’s last part, he was asking about the operational spend and it was maybe, it sounded like it may have been a little less than he was expecting given the Q2 spend. Do you want to unpack that a little bit? Because I think that’s some point people will understand.

Yes. Absolutely, Brett. And as we said, what you saw in Q2, while there was an elevated amount of merger-related cost, there was a lot of transaction and then restructuring and severance, right from acceleration of some of those synergy opportunities. When we fled them to the second half, it is primarily, what I would call operational synergy capture now. So, that’s when you think about the pace, that’s an element to consider in there. And of course it’s subject to us identifying ways to prudently go faster, which we are going to continue to do, just like you saw in Q2.

But in other words, operationally, it’s rapidly growing in the second half. The operational component of our cost to achieve in Q2 is actually quite small. Most of it was deal-related transaction cost and so the – and it’s all operational from here on. So, it’s a big, big uptick in actual cost to achieve going through the system in the second half.

Brett. Thanks a lot.

Is the $15 billion still the budget – sorry is this $15 billion still the budget in the outlook for integration?

Yes, nothing really has broadly changed in our aspirations and at some point by the way, you raised a good question, at some point I know what, we’ll owe you an update on all that. We keep saying and I hopefully we backed it up with actual evidence and reasons why we are saying it today by giving you something to chew on. But we keep saying, hey, we are more confident now. This two year old plan, we think it may be a little conservative. I know we owe you some more color on that, but let’s say, we have one – exactly one data point for this company so far and that’s today’s report. So, we are going to get a little bit more a line established for you and then we’ll give you a different updated way to think about the future. So, I know we owe you that.

Great. Fair enough. Thank you.

Okay. Thanks. Operator? Meanwhile

And next we’ll go to Michael Rollins. Sorry go ahead.

Sorry, operator, who is next?

Next we have Michael Rollins from Citi. Your line is open.

Hi. Good afternoon and thanks. Well, thanks for squeezing me in. I appreciate it. Couple quick questions. First, when the deal was originally announced, the management teams talked about in the pro formas, there were some expectations of revenue headwinds of Sprint plans migrate into T-Mobile plans and as you now finish this process of bringing the Sprint metrics and measures over to T-Mobile, how do you look at any potential headwinds from repricing to T-Mobile plans over the next few years? And then, secondly, I was just curious if we can get an update on distribution and distribution presence, as you’ve integrated – still managing through the pandemic and maybe some observations of customer behavior is changing upon store reopening staying more digital or it’s reverting back to the historical get into the store and have a hand holding that the reps in the store deliver to the customers? Thanks.

Yes. You bet. And by the way I got so enamored with the second part. Tell me the first part again, what was the management

Revenue.

Yes. So, listen, on pricing, revenues and ARPU and all that, one of the things you got, I think from our report was that we see a relatively stable outlook in the near-term. For competitors, I guess, didn’t guide or give you much to go on, we felt with the new company it was important to us to just do a best efforts view and we don’t see catalysts in the near-term for big changes one way or the other in ARPU. Separately, you heard Peter start to talk about ARPA. And that we’re looking at this at a household level, because we think there is, in the 5G era, there is all kinds of opportunities to develop deeper relationships with households that would be accretive to ARPA without necessarily affecting ARPU. Thirdly, I’ll say, our plan all along has been to bring a intense level of competition to this market like we have always done as the un-carrier, but now in a sustainable way backed by the long-term network plans that we have. And that’s obviously going to be to the benefit of consumers and we funded that fully in our model. How that relates to ARPU specifically and how that will unfold over the years, again, I know we have a two year old set of spots and at some point need to update that. But a few things to say. We are bringing competition into the market. That’s who we are. We’ve got the capacity to do it. It would be crazy not to leverage that capacity advantage to compete hard and grow top-line revenues through competition. So, that’s number one. Number two, in the very near-term, we see no real catalyst one way or the other for ARPU changes. So we see it generally stable for the second half as we commented on. And then, Matt, do you want to jump into the second half?

Yes. I’ll tackle that, Mike. I think the question was a little bit around distribution look like and then what we are we seeing with COVID-19. So, the first thing I would say is, what we have shown in this quarter is a great ability to execute. Our plan had always been to get to day one, within 90 days or so from close and we effectively did that. And so it’s a little bit out. But we in all the adversity, we had to relearn a lot of things, many companies did and we’ll still pull this off. And today, a vast majority of all distribution points already are cobranded or branded as T-Mobile and we are often running going forward. Like many retailers, there wasn’t a issue, right, when our retail sat down and we had to keep our employees safe, keep consumers safe and put the right protocol in place. Our team has well worked very, very quickly to be fixed and take care of customers. And we saw some changes in buying traffic, switching from retail into digital. Now historically T-Mobile hasn’t relied heavily on digital. Sprint relied a little bit more and then number increased a lot, but it was a very small percent and increased by lot and it’s still a relatively small percent. I’d say those numbers have been generally stable as well, as we recovered we’ve gone and been able to open the vast majority of the stores in a safe way to serve customers and the communities and the market is open back up. The trends has, what I’d say generally stabilized. We do intend over time like many folks to serve customers where they want to get served, that’s digital, that’s full digital. What we’ve seen a lot of at times, is customers start digital and then fulfill on retail and we are fully set up to support that and we are going to continue to support that as move forward.

Another way of saying that and one of the reasons why we don’t break down digital is that, and I know it sounds a little cakey, Mike, but, all of our customers come in through digital. And all of our customers nearly come in through retail. So, in other words, their hybrid approach is almost everyone deeply researches a rate plan and many start a cart, some finish a cart. Even the ones that come through pure digital, the majority of those get some kind of human touch shortly thereafter. So it’s a hybrid model and that hybrid model to your point is changing. It’s not changing in a way that’s going to bring material changes to our financials any time soon, because, right now anyway customers expect a human interaction at some point in the process and I hope that changes over time. But as long as they do, that’s where our people shine. And our people are just we won J.D. Power again. We just won the highest scores ever in the history of J.D. Power for customer care. So human interactions are real source of strength of ours and even digital customers benefit from it. The last part of your question was about retail rationalization, about the store counts, about our reach. I can tell you that, I’ll go to Jon Freier, if he is on the audio line just for a quick comment because he really engineered our Head of Consumer Markets engineered this day one with so much coordination with our communications group, our marketing group, our product and technology groups, our engineering groups. But Jon has led the go to market approach and we’ve simultaneously reached more people as T-Mobile now with a deeper population reach of retail than ever before. While going faster on store rationalization that people expected. Do you want to share a couple of those stats, Jon?

Hey everybody. Yes, it has been an incredible last 90 to 120 days and like Mike said just a few moments ago, we got a unified operation behind the T-Mobile brand. And what that really means guys is that, no matter if you are going into a legacy T-Mobile store or a legacy Sprint store, the answer is, yes, we can help you. And what we did here is, we took the legacy T-Mobile systems and installed them into our legacy Sprint stores and then we took the legacy Sprint systems and installed them into our legacy T-Mobile stores. We rebranded everything. So if you are driving around and public see these banners, that say Sprint now part of T-Mobile, so we got the Sprint exterior signs down, the new banner is up and there will be permanent T-Mobile signage that we will be following over the next several weeks and months. But what we wanted to do is, be able to put customers in a position to say, yes, we can help you. No matter if you are coming into the store that you’ve always come into or maybe you are coming into a store that’s more convenient to you now. And we are in a position where, yes, we are not sending it from this store to that store, but we can help you at all of that. So, we’ve done an extraordinary amount of training, lots of system work, from a product and technology teams and our team has been in a great spot to do that. And like Mike said just a few moments ago, not only simultaneously reducing some overlap stores, as you guys know, we talked about this that we’ve had stores that just have really run on top of one another and of course you are going to rationalize that, optimize that, as you need to. But at the same time, we have exceeded presence. We actually have 10 million more covered parts across the country that we are expanding to. So that 275 million people that we are distributing to, prior to close, that was about 265 million. And so, there were places in the upper Midwest and the Great Lakes for example, where our distribution reach wasn’t as great, but the Sprint distribution reach was really – was really there. And so, we’ve been able to dip those synergies and get all that behind this, get more locations to serve more customers, but our team is in position to be able to help new customer advance on the T-Mobile platform and then also take care of our Sprint branded customers until they migrate to the T-Mobile platform over the next sort of years. So, I am super proud of what our teams accomplished. It’s been an amazing – I am not of working like both what Mike and Matt said us few moments ago in this environment. It’s really thrilled with what our teams have done. So, appreciate the time, Mike.

It looks to us at the beginning of this, like we reach about 275 million people with our distribution now, while going faster than expected on retail rationalization. So it’s a win on both fronts, really terrific. Congratulations, John. Operator, let’s go back to the phones.

And next we’ll go to Simon Flannery from Morgan Stanley. Your line is open.

Great. Thank you very much, Good evening. Mike, I think, at last call you talked about some early wins in enterprise. I wonder if you could just pull back more broadly and just think about where you see the biggest sort of themes of opportunity. You had a lot of color around the areas where you saw you could make progress as a standalone T-Mobile. Now you are combined with Sprint. Where do you think the best opportunities to take share are over the next couple of years with the new network?

Yes, terrific. I love the fact that we are a wireless pure play with the highest capacity in the history of the wireless industry in our plan. And because that’s ultimately to our advantage. Enterprises, they have a complex know you solution providers from the biggest companies in the world and what they want from our industry is a high capacity connection at a great value and to surround around that with an easy to manage set up. And we need to be the best at doing business within this category. So we are very focused on being the winning pure play. Mike Katz and his team have done a phenomenal job. Mike got out of the gates very quickly in this merger and had his day one weeks ago with our T-Mobile for business team integrating our go to market against enterprises, public sector opportunities, et cetera. I mentioned in my remarks that, T-Mobile for business led the way. We had to update you mid quarter on our guidance and then we just updated you again that we beat the high end of the range of our guidance. Both of those were largely, but not entirely due to some outstanding opportunities to serve businesses public sector and schools for example in this rapidly changing landscape. Customers have reached out to us and said, hey we need help. We need a great deal. We need a high capacity service for kids. But we talked a lot in our Project 10 million about the home work gap that you recall. But that’s translated. Now it’s a school work gap. And it’s all day, it’s not just home work and T-Mobile has the capacity to serve and that’s just phenomenal. So, Mike, if you are on the line, would you want to say anything else about the opportunities ahead?

Yes. No. Thanks, Mike. Yes, I think you are exactly right. I know I mentioned last earnings that we are in this really interesting time in the middle of COVID and then as we come out of COVID, as companies are doing their long-term planning and maybe even thinking about possible recession that we are seeing buying happening in this category at a faster rate than we typically would have seen, rather for then companies waiting three, four, five years to buy this category. It’s happening faster. The timelines are too pressed. And that’s created huge opportunity for us where in many enterprises we are not the incumbent and our teams have just done an incredible job finding that demand from customers and backing it. But at the end of the day, like Mike said, it really is about the network and the network that we have in the ground today and the things that we are doing that Neville and Mike talked about a second ago, really are going t be the difference maker for us because, businesses and government agencies first look at the network. They look at our technical compliance we all fit to their standards and then they pick us based on all the other things that we do. And right now, we are able to meet all those demands from customers and we are now differentiating the network, not just a me too proposition like our competitors. So…

COVID will close customers who may be look to switch carriers more aggressively to get a better price performance.

Yes. I think and we’ve seen some signs of that. Many companies out there are looking at their long-term customers and they are going to do cost transformation programs as they prepare to maybe weather the post-COVID storm. And we’ve seen lots of examples that companies …. I mean, this marks kind of hiding the dynamic going on in American companies, which is everybody is looking for dollars and looking under every rock to find them. And here we are and just that moment, with the best value and the highest capacity service. So that’s really exciting. The last word I’ll say, on this which is also a little bit COVID-related is, the CL, corporate liable part of our market is kind of been flat lined for a long time. And I actually think that post-COVID, there is an opportunity that the changing work styles will cause us to see growth again in that sectors, just at the time we are arriving with hyper competitiveness and able to lead the pack. So, and the reason for that is simple, some form of home work and home officing is going to continue and some amount of that will carry on and companies will feel more of a need than in the past to take responsibility for some of the home connectivity and personal connectivity of their employees. That means enterprise corporate liable lines maybe positively responsive to this environment. That’ always been a castle of AT&T’s and Verizon’s. But it’s us to take and we are scaling the walls.

Right. Thank you.

Thanks, Simon.

And next we’ll go to Craig Moffett from MoffettNathanson. Your line is open.

Hi, thanks. You reported in the release that you’ve converted about 10% of customers over to the T-Mobile – Sprint customers over to the T-Mobile network and that’s really sort of brings back memories of the way you manage the metro PCS merger some years ago. I wonder if you can just contrast those two, maybe particularly with Neville and talk about what’s different this time in trying to integrate particularly the 2.5 Ghz spectrum what you did in the metro PCS merger which was effectively running off a network and then moving over this spectrum. And just how that should inform the way we think about the cadence of the synergy realization here?

Neville, do you want to jump in?

Happy to take it. Hey Craig. So the situations are comparable, but they are different and favorably, so, I think the biggest – the other is that, as we look to metro PCS, I mean that was primarily a CDMA customer base. And so, we have different technologies and we knew we have to retire and move all of those customers out of the CDMA phone effectively. Here we are with combining our traffic and our customer bases across Sprint and T-Mobile. On the update today Mike mentioned in the opening remarks 85% of the Sprint customer base have a compatible phone with the T-Mobile network. So that 10% traffic number which is remarkable in a very short period of time. It’s there because we can start open a network customer just on LTE, our Sprint customers have access to that great nationwide 4G now too. But because they have compatible LTE handsets and we’ve activated and we are moving through VoLTE very quickly, which is the primary voice bearer for us. It’s not we are competing on different technology, as it was with metro. We can move those customers at much faster pace. And so, I am always hopeful and confident now that we can move through the migration of traffic and ultimately spectrum and then move to decommissioning at a faster pace. I mean, that’s the game plan. And as I said earlier we are furiously building out the network capability to house that spectrum, the 2.5 Ghz that we have a huge volume of, as you know, Craig. And as we do that, we can support more and more traffic and start to ultimately migrate these customers across. Very similar playbook in many ways in terms of how we approach it, but we are in a much better place to move faster, because of the handset compatibility.

One follow-up to the previous question about the enterprise segment. What do you plan to do with the wire line network from Sprint?

The competition and post- integration – are there any strategic acquisitions you are interested into accelerate though. Obviously, and I knew this asking, it’s not that I can address directly, but I can tell you this, and I said it a little bit earlier, I like being a pure play. I like being, we are focused and we are disciplined. And that’s going to be one of the ways that we win. Wireless is where things are going. You’ve heard us say, John Ledger said for years, you’ve heard us say over and over, all content in communications of all kind of leading their linear forms and going to the internet and the internet is going mobile. Mobile is heating the internet. And so, as a mobile pure play, that’s a great place to be. Now, on the other side of it, I’ll just say, while we are focused and disciplined we have a fantastic balance sheet. And an incredible source of Sprint and so, we won’t be at choose to strategic opportunities if they make sense in our business model. But I think you are investing in this company, because you see that we have an opportunity to win in this huge market and we intend to focus and to do just that. And operator, why don’t we do go to the phone?

Thank you. And it looks like our next one is from Jonathan Chaplin from New Street. Your line is open.

Thanks. Thanks guys. Great quarter. One for Mike and one for Neville. So, Mike, or maybe if Peter. Were there any synergies captured in 2Q or is it too early? And then, how much of this is – what are you assuming for synergy capture in the second half guidance? And this one is definitely for Michael. The $43 billion, you said a few times that you expect it to be higher, is that just from acceleration or the synergy number or the EBITDA number in year would be larger than you initially thought it would be? And then for Neville, when you get to fulfills on the 5G deployment, how many – where does that 700 sites per week goes to? Thanks.

You heard – I’ll have Peter comment on the first one. You heard in my remarks that, we moved faster than expected on so many elements of integration in the second quarter and you saw us flow the cost through for some of those things. And then, yes, that does allow us to start to see some runrate synergy impacts from those moves. I also said that that sets us up well to invest in the next round. So, you have to kind of keep it in balance, because the bigger pieces to the earlier discussion are still in front of us. The actual operational integration spending was pretty light in Q2. You will see benefit of it flow in, but that benefit is really allowing us to move to the next base in the round of bases and swing again. And so, in 2020 and 2021, these are big investment years and it’s important we start to get some of that runrate to flow in, because that actually helps to fund us as we go along. So, I think I kind of captured that in my remarks, but, Peter, why don’t you add to that and then tackle the other?

Yes, absolutely, Mike. So, there is no doubt, right, with the long incumbency of the deal, as well as COVID-19, right, it’s a differential that’s put out there almost two years ago, but we do remain highly confident in our ability to exceed and to your point, Mike, yes the moves that we made in Q2, you saw us accelerate and diligently do things and we put the 8-K out there both from organizational design acceleration, this phone rationalization acceleration. You see what the pace of the 2.5 rollout did, which is again the first step of the three and ultimately leads to the decommissioning which is the biggest part of the synergies – avoided site builds already, that’s already something that we are capturing. And so, yes, in the second half of the year, we are already going to be capturing some synergies and that’s then only build them through the investment periods. And again, as Mike said, I think we are quarter into this journey. It’s a multi-year journey where a quarter in we are already seeing optimistic signs and we are moving quickly what’s prudent to do so. And we do owe you an update on that as soon as we can we will.

And I hope you hear us saying, and we are laying down some facts to back it up now that our aspiration is to go faster and bigger. And, look, I think ultimately you are going to measure our team, based on three simple things. Did we outgrow the competition through this first timing cycle as a new company? Did we unlock the synergies bigger and faster than we promised and translate that to enterprise value? And did we set up the company for long-term success? And this management team is laser-focused on all.

Jonathan on the back-end of your question there on the runrate, obviously we are going to do better than the 700 per week. But I am delighted with that ramp during the pandemic. So, the great news is, we’ve got great resources out there working very safely and with health and safety paramount. Our supply chain is actually really robust. We had a few scarce in the early days of the pandemic, but as things are moving really well. And I want to get into a nice robust steady state and go build this network out as we said over the next two years. I will really want to break of the back of the 2.5 deployment over the next 18 months. I mean, that’s the plan and we have a runrate and a production rate that network factory now is rolling out operates and incremental site activity on a very, very strong site. So we are in a good spot.

Thank you guys

I am going to step out right now. But we are going to take one last question and then, Peter will wrap us up. So, from my part, thank you for this great discussion. This was a phenomenal quarter and operator, the last question please?

Our last one comes from Peter Supino from Bernstein. Your line is open.

Hi. Thank you. I was wondering if you had any insights on Sprint subscriber churn and I know that COVID-19 makes it hard to separate the drivers of changes in churn. But do you see anything about the way Sprint subscribers are interacting with the network that gives you a quantitative sense of how their experience might be changing? Thanks

Hey, Peter. It’s Matt. I’ll start and then if Neville wants to jump in on any other factors there. So, we haven’t seen anything that surprised us and we feel great of what we have in Q2 in terms of subscriber churn for Sprint. We’ve seen lots of positive signs. We’ve been able to rapidly enable roaming and the ability for Sprint customers to get access to the T-Mobile network and we’ve seen noticeable declines in churn rates from those customers who have gotten on the network, which is partly why we are going very fast at getting a build out done, or we are very happy about the handset compatibility and why we are aggressively moving fast at bringing those enhanced coverage experiences to Sprint customers. We’ve also seen great participation from the Sprint customer base into some of the offers and programs that T-Mobile traditionally have like T-Mobile Tuesdays or we have that for a number of years. It’s a massive, it’s a great platform for customers to just could thank every day for being a customer. It’s an example of something we’ve rolled out to Sprint customer base and we’ve seen great adoption of that new customer and that’s a very positive sign. So we have an engaged customer base. Very excited about being a part of the T-Mobile company and what we have in front of us. And so, we are feeling very positive about where things are headed. All that said, we don’t know how that’s going to look when we come out of the suppression in Q2 from COVID. We are watching that. Again, as Mike said earlier, we are planning for a highly competitive back half of the year. We are pushing forward getting to normal. We need to buy systems. So we can really take share in the marketplace.

I just add to [Indiscernible] this access to the T-Mobile network for the Sprint customer base is absolutely key. I mean, we know the coverage churn was a major concern in the Sprint base. And you’ve heard our numbers today. I mean, 10 million customers every day are now accessing the T-Mobile network and that’s everywhere, right. It’s not – this isn’t kind of a roaming thing where it’s just geographic expansion into rural environments. This is happening in building in Manhattan and Seattle. It’s happening in urban cores, it’s happening in suburban environments, as well as rural. Only about 35%, 40% of that traffic is actually in rural environments. So, Sprint customers are already seeing a dramatic improvement in the coverage. We did that that they have closed. We opened up the networks for Sprint customers with compatible handsets which is the vast majority as we cover it. And so, big improvements in – that coverage experience has been a key. We are already starting to move towards looking customers over completely to a T-Mobile network experience. We’ve been very targeted without to make sure that customers on the Sprint side that had very difficult and challenging coverage situations, we’ve moved some of those already completely over to T-Mobile network and there will be more of that obviously as we now ramp up our build spectrum migration and all of the activities we talked about today. So, very pleased with the progress there and very positive signs in terms of the uptake from Sprint customers using rather T-Mobile network. With that I am going to..

That’s helpful. Thanks very much.

Well, thank you, Peter for the great question and thank you everybody for tuning in and we are really looking forward to continuing on this journey and speaking with you again next quarter. Operator?

Thank you. Ladies and gentlemen, this concludes the T-Mobile U.S. Second Quarter 2020 Earnings Call. If you have any further questions, you may contact Investor Relations or media departments. Thank you for your participation. You may now disconnect. And have a pleasant day.