Nils Paellmann - Vice President-Investor Relations John J. Legere - President, Chief Executive Officer & Director J.

Braxton Carter - Chief Financial Officer & Executive Vice President G. Michael Sievert - Chief Operating Officer Neville R.

Ray - Chief Technology Officer & Executive VP

Brett Joseph Feldman - Goldman Sachs & Co. Philip A.

Cusick - JPMorgan Securities LLC Simon Flannery - Morgan Stanley & Co. LLC Michael I.

Rollins - Citigroup Global Markets, Inc. (Broker) Amir Rozwadowski - Barclays Capital, Inc.

Cathy Yao - MoffettNathanson LLC John Christopher Hodulik - UBS Securities LLC Jonathan Chaplin - New Street Research LLP (US) Ric H. Prentiss - Raymond James & Associates, Inc.

Walter Piecyk - BTIG LLC Colby Synesael - Cowen & Co. LLC

Thank you. Good morning.

Welcome to T-Mobile's fourth quarter and full year 2015 earnings call. With me today are John Legere, our President and CEO; Braxton Carter, our CFO; and other members of the senior leadership team.

Let me briefly read the disclaimer. During this call, we will make projections and statements about the future performance of the company, which are based on current expectation and assumptions.

Our Form 10-K, which was also published today, includes risk factors that could cause our actual results to differ materially from the forward-looking statements. Reconciliations between GAAP and the non-GAAP results we discuss on this call can be found on the Investor Relations page of our website.

Let me now turn it over to John Legere.

Okay. Good morning, everyone.

Thanks for joining us. Welcome to T-Mobile's fourth quarter and full year 2015 Un-carrier earnings call, as well as open Twitter conference.

We're coming to you live from our new signature store, which is right here in the heart of Times Square at 46th and Broadway. So, if you are waiting to go to a T-Mobile store, you can't say you didn't know where to find one.

We are again providing a live video stream, which I gently remind my colleagues here, so you can watch all the action behind the scenes on YouTube and because we're happy to add some light entertainment, even at our own expense, to earnings. So, we published our own version of the earnings drinking game yesterday, and it's all about T-Mobile.

So, that's right. Get your favorite morning beverage and play along.

If you can't laugh at yourself, then you might as well be Verizon. I mean, it's early.

I've got my iced coffee here for every time one of us happens to slip and say, dumb and dumber. Today, we're going to go through the same Q&A approach as we have in the past.

And to accommodate all your questions, this call would last up to 90 minutes, assuming you need the time. Taking questions via Twitter, text and on the phone.

So, with that, let me get into some of the highlights. Q4 was another great quarter for T-Mobile, and our results show that the business is firing on all cylinders.

We successfully balanced customer growth with profitability and our financial results speak for themselves. Our customer growth is very clearly translating to revenue growth, which has led to adjusted EBITDA growth and now yielding growth in free cash flow.

Our model's working. And this success allows us to invest in things that will fuel more growth in the future, like our network, spectrum, additional Un-carrier moves and customer care.

Let me take a quick step back and look at the results of the quarter. Our 2.1 million total net adds in Q4 mark 11 consecutive quarters of more than 1 million.

And it also is in six of the last eight quarters we've added more than 2 million. We also added 1.3 million branded postpaid customers.

By the way, this is the sixth consecutive quarter and seven of the last eight that we gained more than 1 million. In Q4, we added 917,000 branded postpaid phone net customers, more than twice our closest competitor.

By the way, for those of you keeping score, that eight quarters in a row that we've led the entire industry in postpaid phone additions. We blew past the competition and captured all of the industry's postpaid phone growth again in 2015.

And let me remind you that this was a very competitive quarter. Also in prepaid, where we have the industry's biggest and best prepaid brands, we added 469,000 new customers.

And during the same quarter, Verizon lost 157,000 prepaid customers and Sprint lost 0.5 million prepaid customers. Now, big news is we're not just winning customers, we're keeping them too.

Branded postpaid phone churn in Q4 was down 27 basis points to 1.46% and unchanged from Q3. Q4 was the best year-over-year churn reduction for us in 2015.

Now, like I said, we're delivering very strong financial metrics too. In keeping with our promise to balance growth with profits, we were able to deliver year-over-year double-digit service revenue and adjusted EBITDA growth, again this quarter, of 11.7% and 30.2% respectively.

How did the competition do? AT&T was the best in service revenue growth with 1.7%.

Oh, sorry, that's negative 1.7%. And Verizon was minus 5.6%.

And both of these guys appear to be harvesting cash and could not come close to matching our 30.2% growth in adjusted EBITDA. Q4 marked the 11 quarter in a row with overall positive postpaid porting ratios.

Our momentum continues in the first quarter. We're seeing positive postpaid porting against all of our competitors again.

Our incredible growth has been fueled by America's fastest 4G LTE network, which is also the fastest growing. Neville and his team have managed to more than double our geographic 4G LTE footprint in 2015.

Now, we have 305 million 4G LTE POPs covered and we continue to close in on Verizon. Customers know it and Verizon knows it.

Just take a look at their ads. Could you ever have imagined that Verizon would be running attack ads at T-Mobile just a few years ago?

I would have to tell you we find it to be absolutely fantastic. We've now had, by the way, the fastest 4G LTE network for eight quarters in a row and Wideband is our making our blazing 4G LTE data speeds even faster and no one has or will dispute that.

Our deployment of extended range LTE on 700 megahertz A-Block spectrum is way ahead of schedule. More than 300 markets are live, covering approximately 190 million people.

And customers are seeing the benefit, but don't take our word for it. Go online and check out #BallBusterChallenge and see it for yourself and you could possibly, but unlikely make a little money.

And of course, we're not stopping there. We've entered into agreements we announced with a number of companies for the acquisition of additional 700 megahertz A-Block spectrum licenses to add to our arsenal.

These acquisitions, which total about 48 million POPs, will further improve our low-band spectrum holdings and will take our low-band portfolio from 210 million POPs to approximately 258 million POPs. Our track record, by the way, demonstrates that we will rapidly deploy this spectrum upon closing to get this in the hands of customers.

By the way, it only took us 20 months to deploy the first 190 million POPs, and I can only imagine what the team can do with this new spectrum. These acquisitions, along with our strong financial position, will allow us to be prudent and pragmatic as we continue to build on our low-band spectrum position.

We said a number of times that we plan to participate in the incentive auction, and we look forward to a successful outcome. Finally, we continue to be a leader in customer service.

And proudly, we were just ranked number one again in the J.D. Power Wireless Customer Care Study.

That makes it three of the last four award periods that T-Mobile has come out on top, and our team is killing it. Americans continue to respond and switch to the Un-carrier.

We are still completely focused on making wireless better for customers. Our Q4 numbers show the huge effect our moves to having on the industry.

In summary, 2015 was another great year for T-Mobile. We added customers in record numbers for the second year in a row and outperformed the industry in service revenue and adjusted EBITDA growth.

We delivered on our 2015 guidance, demonstrating for a second straight year our ability to successfully balance strong growth and profitability. T-Mobile continues to deliver strong customer growth that is driving solid financials in a climate where the competition continues to struggle to match our results.

Quarter-after-quarter, we continue to win the hearts and minds of customers, and they're staying with us because we're delivering. Our business model is resilient, it's working, and we aren't going to let up.

Let me now hand it over to our CFO, Braxton Carter, for key financial highlights and full-year 2016 guidance. Braxton?

Hey. Thanks, John, and good morning, everyone.

We're so excited to be here again telling you about the excellent execution of having a growth platform translating to double-digit increases in recurring EBITDA, which translates into significant ramping cash flows in the future. Let me give you a quick snapshot of our strong financial results and exciting full-year 2016 guidance.

Let's start with the financial results for the fourth quarter and for the full year. Our customer growth is translating into strong financial growth as we once again delivered industry-leading metrics.

Service revenues grew by 11.7% and adjusted EBITDA came in at $2.3 billion in the fourth quarter, up 30.2% year-over-year. The adjusted EBITDA margin expanded from 30% in the fourth quarter of last year to a strong 35% this year.

For the full year, adjusted EBITDA amounted to $7.4 billion, up 31.2% year-over-year. This includes the impact from leasing and Data Stash of $158 million.

Therefore, we exceeded our full-year guidance of $6.8 billion to $7.2 billion, which excluded the impact from leasing and Data Stash. Free cash flow, adjusted for non-reoccurring MetroPCS decommissioning payments, amounted to $897 million in the fourth quarter and more than $1 billion in the full year of 2015.

Free cash flow in the fourth quarter benefited from the cash inflow of $795 million from the securitization of EIP receivables in Q4. Even excluding this cash inflow, adjusted free cash flow was positive for both the quarter and the year, indicating that we've reached an inflection point with regard to free cash flow even with the interest carry on the additional $4 billion of debt raised in the fourth quarter to fund the upcoming spectrum auction.

Free cash flow in the quarter was impacted by higher cash CapEx, which amounted to $1.4 billion in the fourth quarter and $4.7 billion for the year, reflecting the continued investment in the expansion of our 4G LTE network. Note that cash CapEx included $246 million of capitalized interest.

Excluding capitalized interest, cash CapEx amounted to $4.5 billion in 2015, towards the lower end of the guidance range of $4.4 billion to $4.7 billion. Net income and earnings per share were up strongly year-over-year.

Let me now come to our 2016 guidance. Our target for branded postpaid net customer additions is 2.4 million to 3.4 million.

In typical Un-carrier fashion, we're starting the year off conservatively and we will adjust the target in future quarters when appropriate. For adjusted EBITDA, our target is $9.1 billion to $9.7 billion, implying continued robust growth.

Our EBITDA target includes an aggregate impact from leasing and Data Stash of $0.7 billion to $1 billion. The underlying assumption here is that in the first half of 2016, we intend to focus on EIP in our promotional activities rather than leasing.

Finally, we target cash CapEx of $4.5 billion to $4.8 billion in 2016, slightly higher than our target range for 2015 as we continue a success-based investment strategy and continue to expand our footprint. Let me now say a word on our expectations for the first quarter of 2016.

Please be aware that results in the first half in 2016 will be impacted by new revenue deferrals associated with Data Stash. Remember, with Data Stash cash is received upfront and deferred to future periods.

For the first quarter 2016, we currently expect a negative impact from Data Stash of approximately $150 million. In subsequent quarters and especially in the second half of the year, the 20-gigabyte Data Stash cap we instituted in November should limit further deferrals.

Additionally, net income will also be impacted by higher depreciation due to the impact of leasing and higher interest expenses due to the $4 billion fundraised in November. Regarding taxes, we anticipate an annual P&L effective tax rate of approximately 40% for future periods.

Importantly, I am pleased to announce that the recent extension of bonus depreciation should result in no significant cash income taxes until 2020, three years later than previously expected. In summary, we've delivered very strong financial results in 2015 and expect continued strong growth in 2016.

Now, let's get to your questions. You can ask questions.

We have phone, text message or via Twitter. We'll start with the question on the phone.

Operator, first question, please.

Thanks for taking the question. I'll just follow up with some of the points that Braxton was just making around Data Stash and leasing.

You gave us the color on what you think the Data Stash impact is going to be in the first quarter of 2016. Could you maybe unpack for us what's assumed for the full year because you gave that expected impact of Data Stash and leasing combined?

And then you mentioned you're going to maybe shift your emphasis back to EIP. I'm wondering why you decided to shift back and then what's inherently assumed about the adoption of leasing and the guidance you gave for this year.

Thanks.

Sure. Braxton, you start.

And then, Mike, jump in.

Yeah. Good morning.

Yeah. The Data Stash impact estimated for the year is between $250 million and $350 million.

And remember, that's cash received upfront that's deferred to future periods. That should be added to the $0.7 billion to $1 billion net impact of leasing and Data Stash to understand the true guidance that we're giving on leasing revenue for the year.

Mike?

Yeah. And as we also said, we're going to be using both tools this year.

And we wanted to make sure that was clear in the guidance of $0.7 billion to $1 billion on combined leasing and Data Stash. We've got two great ways our customers acquire phones.

They're both working out terrifically. And we wanted to make sure, since we're here giving guidance now, to give a number that lets you understand we're going to be employing both tools throughout the year.

You can see our current promotion favors EIP. And as Braxton said, that's something you can expect to be favoring in the first half of the year.

But when you pan back and look at the year, we wanted you to understand both EIP and JUMP! On Demand and leasing will be tools we'll be using throughout the year.

And the $0.7 billion to $1 billion is the number to expect on the annual basis.

I think, Brett, the reason this is prominent is that it was highly likely that as people were modeling our exit from Q4 into this year that they probably were assuming a much higher percent of leasing than we currently have. We're not expressing a strong negative opinion on leasing as it relates to EIP.

We're just giving you the trend of what we're successfully pulsing into the market right now which, as you can see in the first half, especially, is much more emphasizing on our very successful EIP program, and we retain the right, as we will, to shift the news each tool. So it's more of a way for you to look at what I believe are a very strong set of results and a very strong guidance for the year that has us growing considerably.

And the last one would be, just to be clear, because you asked straight ahead, is there anything we're seeing with leasing that would lead us to use both tools this year? And the answer is absolutely not.

We're finding great success with both. In the fourth quarter, we tended to favor JUMP!

On Demand with our super phone, and we killed it in the fourth quarter. So, both tools work out great for our customers and our company, and both will be in the plan going forward in 2016.

Is there a particular reason why one type of offer resonates a little better at certain points in time than others?

Well, we like to be a little bit unpredictable competitively. Right now, we've got a great offer out on EIP, but there isn't any magic sauce to it under the covers.

Okay, great. Thanks for taking the question.

Hey, operator. Next one on the phone?

Hi. Thanks, guys.

I wonder, first, if you could detail the $138 million gain you saw from the sale of a license. Was that a swap or an absolute sale?

And then, second, talk about some of the additional markets you bought in the 700 A band. Thanks.

Yeah. The $138 million gain was a swap.

So, that was a non-cash gain, Phil.

Neville?

Yeah. The 700 new megahertz license is a big excitement for us, so almost 50 million POPs on top of the 20 million license POPs we've secured in the fourth quarter.

So, for me and my team, another 70 million POPs are running after we've already started, so very excited about that piece. The footprint is expansive, both geographically as well as the POPs numbers, and it's pretty much coast-to-coast.

We've got stuff from Eastern Washington to Florida to Upstate New York to right through the Midwest. So it's a broad expansive set of licenses, and just delighted with the progress we've made on securing more A-band for the coming year.

And Phil, the...

And this essentially...

...total proceeds paid was roughly $700 million, and it's roughly $1.20 per megahertz POP. And there's going to be a lot of goodness as we roll that out during 2016.

And that includes the spectrum that you traded?

That excludes it.

Excludes. Okay.

Thank you.

Okay. I'm going to go into Twitter, and I think we should answer a question or two from Walt Piecyk.

Otherwise, his face is going to take over the entire screen here. I count seven or eight from Walt; at least he's not Periscoping.

By the way, if you ever follow Walt on Periscope, they have the most horrific, boring less-followed Periscopes in history like Charades, et cetera. So Walt, I'm following you, but certainly not anybody else.

The depth of his questions range from the first one, which is, does Braxton need us to send over a fresh razor#beardgame, which we'll move right by. But I think this is an interesting question because I think its got a lot of pertinent aspects to it.

What percent of smartphones in the base can use 700 megahertz A-Block? Neville?

Yeah, I'll take it. So we had a tremendous year last year with driving band 12 700-megahertz A block into our device portfolio and obviously into our customers' hands.

We targeted to get to about 50% of our LTE customer base with band 12 and we're there or slightly above. So we're making great progress.

Pretty much everything we sell now has band 12 within it. And so we're really starting to unleash the benefits of that great band 12 footprint.

John referenced earlier on 190 million covered POPs now with band 12. So a great story and tremendous progress in a very short period of time both deploying the spectrum and getting the handsets into the marketplace where our customers can enjoy the benefits.

The other thing to add, it's kind of obvious, but this is one of the things that's driving up satisfaction and driving down churn. As Neville said, substantially all of our sales now are 700 megahertz compatible.

And what we're observing is that when someone has a 700-megahertz phone in a 700-megahertz market, their churn rates are better. Their satisfaction rates are higher.

And that's to be expected. But you can see the benefit of that as it flows into our system and as we continue rolling out the spectrum.

That original 190 million POPs that we acquired is now fully deployed and we're now working on the stuff that was deployed in the fourth quarter or purchased in the fourth quarter. And there's some great underlying stats and whether the question that this responds to comes up today or sometime this week, I will also point out to you that we're to the point now where 50% of our voice calls are being carried on VoLTE, so Voice over LTE, which is an amazing experience and adjunct for all of our customers, which is not one of the capabilities that our competitors have fully enabled.

And we will keep a close eye on that step because it's a major benefit for our customers that may or may not be visible in some of the testing that's done on coverage. Jim Cramer writes TMUS numbers look very strong.

Well, I don't know if you're on the phone, Jim, but we're going to have Jim here, by the way, I'll just say at about 10:30 or so. I really appreciate him jumping off the desk after a short – long-weekend and coming up.

So I'll answer the questions when you come here, Jim. Let's go back to the phone for one more.

Great. Thanks a lot.

I was wondering if you could revisit Binge On. Maybe, Neville, you can just talk about where we are on the traffic and how that has worked out in terms of the usage and in terms of the capacity.

And then maybe Mike or John on what has it done to your churn in terms of making it stickier for customers? And particularly on the gross adds side, is this more of a retention device or you're really seeing improved porting trends as people see this as a differentiated factor or is that something where you think there's a greater opportunity to drive Binge On awareness?

Thanks.

Yeah. Hey, Simon.

So when we activated Binge On, we've seen, as we've talked through before, a material reduction in network traffic. So the benefit that Binge On brings with customers now being able to enjoy three times the amount of video approximately compared to prior, that's translating into a reduction in load on the network as they really enjoy a great video experience on their smartphones.

That percentage is in the 10% to 12% range in terms of reduction of data that they're seeing on the network through Binge On, so a material shift.

Mike, do you want to pick up and throw it to me?

Yeah. Just on the business side, it's kind of, Simon, yes to all of those.

But one thing that's interesting you didn't mention is that we're also seeing that Binge On and the rate plans that came out with Un-carrier X are driving not only our brand value proposition, but also driving data attach. We're seeing these are accretive to MRC loading.

That's a leading indicator of ARPU. You can see it in our results in the fourth quarter, ARPU was very strong.

ABPU and ABPA hit all-time high. That means people now are paying more for T-Mobile services through their own choice of buying more from us than they ever have before in the history of our company.

And Binge On, and the way we designed the rate plans and the way they attract people to use more data and buy more data, are a big piece of that. Of course, it helps make us more attractive.

We killed it in the fourth quarter. And we think it's a reason to stay.

Yeah. Let me just add a couple of things and you – at the tail of your question was something about the competitive environment in porting, which I'll touch on because a number of people have been having come in.

I maintain my belief that Binge On will be one of the biggest things that we've ever done as a company. And reminding you that it is one of a series of Un-carrier moves that are designed to solve pain points for customers, and this big evolving pain point was overages and overbuying as it relates to the fastest-growing data stream of all, which is video.

It's also a preemptive start to our move into video and capability and content for our customers, and one of a number of things that we can do from our very strong position of wireless. Now, Binge On's early results are astonishing.

Certainly, our partners like Netflix are seeing gigantic increase in daily viewers. And even some of the people that aren't currently at this moment part of the zero-rated program, some of the bigger ones are seeing just a huge increase because of the savings that go along with Binge On.

Now one of the things that I think we need to point out all the time, because somehow in the market as people's coverage seems to be getting somewhat at parity, certainly, us and Verizon, now speed is not at parity. But what people tend to forget that when you pick T-Mobile, you get Music Freedom, you get Binge On, you get international data freedom.

These qualitative items along with the commitment that we will continue to add to this is a huge differentiation in our brand and why the competitive environment continues to play in our favor. Your questions about the porting, here's what I would say.

Competitive environment, non-competitive environment, these are noises made by people that are kind of at the mercy of what's happening on a day-to-day basis. Here's a few numbers for you, and what I would tell you is that it's been 11 quarters now where we've been positive on a porting basis against the entire industry.

It's been eight quarters since any carrier has positively ported against us on the postpaid side, and that continues into Q1 as well. So here's some numbers.

Q3, the overall porting on the postpaid side was 1.76. Q4 was 1.67.

And I'll just give you an idea, last week, the last seven days, 1.8. So that covers several different periods.

If you want to pick on any of the guys, the stories – the underlying story kind of tells something similar. Verizon in Q3 was 1.33.

In Q4, it was 1.44. Last week, it was 1.5.

So we're comfortable with all of those. They can flex their muscles.

They can run their balls commercials. They can give [profanity] (29:00) away.

It doesn't matter. Now, you get AT&T which kind of matches what we're seeing with them.

AT&T's strategy at this coming (29:07) point in time is to try to sell together something people want with something people don't want and lock them into both of them. And that's finally where they're starting to look at unlimited.

But in Q3, the porting was 1.98. In Q4, it was 1.92, and last week it was 2.04.

So keep swinging the bat, and I think that's probably what's got them attempting to wake up. But I think what they're going to realize is no one really cares.

And Sprint, certainly – we've all been watching what they've been doing, they were certainly one of the big holiday gift periods, there was more 18-inch small TVs given away in the City of New York than even before. But Q3 was 2.09, Q4 1.56, so certainly progress but not worthy of a taskforce here at T-Mobile.

And last week, they were 1.8. So we're feeling pretty damn good, thank you very much.

And I think that's a combination of carefully pulsing in and out our actions, balancing profitability with growth as well as the Un-carrier moves that we've put in and more that we will have. So I hope that answers your question.

That's great color. Thanks, John.

I wonder if – see if I can find – Bill Hall (30:22) had a question that kind of left my screen. I'll see if I can find it again, but it was, here it is, prepaid 2015 commentary, with the majority from MetroPCS, 2016 prepaid net add guidance, you expect a tougher environment with Cricket momentum?

Mike, do you want to talk about that?

Yeah. It's going fantastically well.

It's one of the things that we probably should talk more about. We're killing it in prepaid and, of course, it's being led by MetroPCS.

This is the best brand in the industry in prepaid bar none. Our team is killing it.

They're firing on all cylinders. But also some of the macro trends are swinging our way.

We've seen a shift in consumers from kind of low-end pay-as-you-go types of plans to these higher quality plans, like MetroPCS has, that are monthly, that are backed by one of the top networks. That favors Cricket to a certain extent as well because they fit that category.

But MetroPCS is a much, much stronger brand with far better execution. You'd see it in the numbers.

So we're really pleased with what's happening. Specifically to your question, yes, the majority of our growth is on MetroPCS as opposed to our other brands.

And we expect the headwinds – rather tailwinds, strong trends in 2016 to continue.

Yeah. I'll just add a comment.

I couldn't be happier or prouder of the MetroPCS team. As we came together with MetroPCS and we kept that brand intact, these guys are running at record pace.

And by the way, right now, as we speak, this kind of a week, the volumes of business that these guys are doing are absolutely unbelievable as they have each time. So yes, a majority of our prepaid is coming from Metro, and we will continue to pivot in that direction.

I'd actually kind of pose one interesting question. I was talking with the team last night about this.

I think T-Mobile is the only company that has successfully run prepaid and postpaid businesses at the same time. If you go back over several quarters, you had this one period or so where I think Sprint thought that it was going to be fun to play in the prepaid game, had some big numbers, but we found out it was heavily to the detriment of their postpaid business.

And then they backed off and kind of they're somewhere in between now. Cricket has had some success, but AT&T has been absolutely bleeding postpaid phone mix.

You know that AT&T lost 1.5 million postpaid phone subscribers just this year. So contrary to the belief that most of the donation in the industry is coming from Sprint, it's actually coming from AT&T, and I think they're in for a bit of a rude awakening.

So the prepaid business, very strong and an awful lot more that we can do. And by the way, we see MetroPCS' main target to not be Cricket per se, but to be Sprint.

And I think you'll see a lot more about the competition between MetroPCS and Sprint.

Just a quick fact to it on that, it's interesting, although we just violated the drinking game, so everybody can drink while I'm sharing the factoids (33:37).

Thanks, Mike.

Yeah, you're welcome. What's interesting is, traditionally, MetroPCS and Sprint postpaid have – Sprint has been a significant contributor to MetroPCS.

And you might have seen that we're targeting Sprint customers with the latest promotion. Well, porting from Sprint customers is up by about 50% since we began that promotion.

So it shows that there's a lot of affinity for MetroPCS from that customer base with the same kind of focus on low prices and value.

Let us go back to the phone.

Hi. Good morning.

Thanks for taking the questions. Two, if I could.

First, I was curious if you could disclose how much synergy you recognized in 2015 from MetroPCS and then how much is left to recognize during 2016? And then secondly, almost a year ago, the company discussed the efforts to focus on the business segment and to take advantage of the expanding LTE coverage by expanding the marketing footprint.

Can you give us an update on each of these initiatives and if there's a way to quantify the impact to results from those aspirations that you've had? Thanks.

Great. So we've got synergies on MetroPCS, we've got the at-work marketplace, and then I thought I heard more about the retail...

Marketing footprint expansion.

...footprint expansion. Okay.

Braxton?

Yeah. So, on the synergies, Mike, the $1.5 billion plus of run rate synergy, we're there now in the first quarter of 2016 and it's fully embedded in our guidance.

During 2015, roughly $0.5 billion of that was CapEx synergy, and that certainly was achieved with the shutdown of the CDMA networks on July 1st of last year. The balance of the $1 billion worth of OpEx, which was primarily driven by network expenses, continued to ramp throughout the year.

And it's really interesting, when you look at cost of service and the cost of running our network, not only a significant decline as a percent of revenues, but absolutely down in dollars year-over-year and that was the recognition. Not 100% of the synergy was there, but by the end of the year we had reached a run rate that was the majority of the synergy.

But you can definitely count on Q1 being at full run rate. What a success story after so many failed mergers and failed integrations in the history of wireless, very, very well executed.

Mike?

Yeah. You asked two questions about starting with the business customers.

Our business sales are going fantastically well, and it's one of the things we probably should talk more about. Just a couple of quick statistics.

In the fourth quarter, our run rate was more than double what it was earlier in the year and more than double the prior year, so fantastic run rate, more than four times though at retail. So it shows that our focus on small and medium businesses really took off in 2015.

But what's interesting is that it wasn't just limited to small and medium businesses. Even though we focused there and we said we were going to focus there, we saw a surprising influx from enterprise customers as well, who really appreciated the overall value proposition that we brought and that we continue to bring.

So very pleased with what we're seeing on the business front. You asked about the marketing footprint.

Right now, if you kind of think about where we have our full mix, our network is in full swing and our distribution is in full swing. That part of the country represents about 230 million POPs.

Think about that. We're rolling up all the growth in the industry, more growth than AT&T, Verizon and Sprint combined.

And yet, our full mix of marketing distribution and network are in about 230 million POPs. We see an opportunity to increase that this year and into, say, the middle of next year by 30 million or 40 million as we fill that distribution, conduct local marketing and, of course, finish the 700-megahertz roll-outs that we talked about.

So there's a great opportunity to continue to expand where we have our full competitive suite, and we see it in about that range, 30 million or 40 million within the next year, year and a half, rolling out systematically.

Okay. I want to acknowledge Jim Patterson who has sent in a bunch of questions.

And, Jim, I'm not sure – why don't we do this. Since you're live and active here, rather than pick from one of your plethora of questions, send whichever one you want me to answer and I'll get that one next.

And I want to point out I'm one of your weekly avid readers and I think you do a great job. You focus a little too much on that yellow company, but your thoughts are generally very good.

Let's go on the phone one more time, while I wait for Jim's incoming.

Thank you very much. I was wondering if we could chat a bit more about how you folks are looking at sort of tackling opportunities for gaining subscribers in 2016.

Historically, you have been Un-carrier when it comes to how you promote through the course of the year. And I was wondering how we should think about sort of your seasonal marketing trends through the course of the year.

And then also, if we think about sort of the bolstering effect of your low-band spectrum in the 700-megahertz arena, how does that provide you with additional opportunities for markets that perhaps didn't have as strong coverage before, but now have been sort of augmented with additional capacity and reach?

Okay. I'm going to start in dual acknowledgement on the first piece, and I'll turn to Mike to cover both of those along with Neville.

But one of the things you said was that we have, in the past, been Un-carrier in our marketing approach. We know no other way.

I mean it's the basic fabric of who we are and you'll continue to see the same things that we do. We don't have the same gigantic TV spend that the other guys have.

We're very targeted. We use social extremely well, and you'll see that.

Now, I did want to acknowledge the team of people at T-Mobile who I thought made a great set of commercials at the Super Bowl. I think we played way above our weight class.

And if you probably saw on the YouTube AdBlitz summary, we were voted the number two and three top commercials at the Super Bowl. And Peter DeLuca and our whole team and the outside agencies I thought did a fantastic, fantastic job; something to be very proud of.

And at the same time, our network was cleaning things up. And I think you'll continue to see that fun, innovative marketing approach.

But Mike, do you want to comment on that?

Yeah. I think just to build on it.

One of the things, Amir, that you can expect from us is that we're – as John was saying a few minutes ago, we pulse in and out with promotions. But we only pulse in with Un-carrier moves, meaning, when we come up with these major changes in how the industry works, they're permanent.

So, Binge On, for example, is a big move that we think addresses one of the most important needs customers have as Internet consumption switches to mobile. And as video consumption takes off, we wanted to solve a major problem.

So, those are the kinds of things we do with our Un-carrier move. And yeah, we've got – we're far from being done.

This hash tag we throw around, it isn't rhetoric. We won't stop.

We've got a lot left to do on Un-carrier moves. Promotions are different.

They pulse in. They pulse out.

We're there to meet the need when the market's there. For example, February is a big month in this industry as people have tax refund checks, et cetera.

We have an active promotion right now, and you can continue to expect that game plan going forward. And then, finally, you talked about rolling out our network and our commercial operation.

I addressed that right before the question. But, yeah, we do see a big opportunity to continue to roll out our retail footprint and our network in a coordinated fashion and that's what you can expect from us.

It's incredible that Neville and his team have that entire 190 million POPs swap already complete. Now we have 20 million POPs more on low band from fourth quarter, and 48 million POPs more we just announced today that we'll get to work on and simultaneously, we're working on the distribution to match.

Together, we see another 30 million POPs or 40 million POPs of our full marketing opportunity growing from about 230 million POPs people with another 30 million POPs or 40 million POPs over the next year, year and a half.

So, let me just grab two or three of those things, because this is an earnings call. I know we're going to focus on the detailed financials because they're extremely impressive.

However, the Un-carrier machine, I just want to remind you of, it's got a purpose. It's what we stand for.

And it's solving customer pain points but also making institutional change to the United States wireless industry. And I would submit to you, therefore changing wireless around the world.

That's something we're very, very proud of. I would point out that it almost seems as if our competitors have stopped trying until they need to, copying our moves.

Newsflash: Un-carrier 11, Un-carrier 12, they are definitely coming. They are definitely as big or bigger than anything we've ever done and if I was Moe, Larry and Curly I would start [profanity] (43:22) myself right now.

I mean, get a jump on it. Do it early.

Don't wait. And I would also point out that little by little, the changes that we made two years ago, two-and-a-half years ago, they are ultimately all getting around to them even after the initial statements by the bigger competitors.

Think back to Fran Shammo at Verizon's comments when we announced Wi-Fi Unleashed stating that our customers don't need that capability because we have a substantial network, et cetera, blah, blah, blah, up until last week when guess what? Voila, they moved around to Wi-Fi calling.

So, ultimately they'll all get there and it is part of who we are, what we stand for and the brand attribution of the company, which I think outside of an earnings call, that brand attribution and who we stand for and what our people are, is one of the most significant parts of the momentum of this company and there is plenty, plenty more to do. Sorry to evangelize.

Well, not really. Okay.

Let's see. We can try this one, Neville.

You can use it to a couple of them. I think this is an older one by Jim, but what percent of minutes go over voice over Wi-Fi.

Maybe you can talk about VoLTE as well. How much has this grown in 2015?

Is it a meaningful portion of total minutes?

Yes. Thanks for the question, Jim.

So, it's around – it hovers around 5% of the minutes on the network, which is tremendous. You've got to laugh.

As John just mentioned, you know, if you're a Verizon customer, you had to wait two years before you could enjoy Wi-Fi calling on your smartphone. So, it's been a long time coming for some folks.

But we see regular – millions of customers use the service every day, so it's working extremely well. I think the other big piece that we've talked to already on this call this morning is VoLTE, so Voice over LTE.

And I love to talk about fastest network, for sure. We've been there for two years now; fastest growing without doubt.

We're the most advanced, too. And the key metric there is, and the key technology piece, is Voice over LTE.

And we're about 50% now with all of our call volumes around VoLTE. So, you look at VoLTE, Wi-Fi calling, this movement of the calling base onto IP, we are so ahead of the game.

I challenge any of our competitors to put up a stat that comes anything close to half of their call volume on VoLTE. And why is that important?

It's critical because it allows us to commit more and more spectrum to LTE going forward, which allows us to maintain our pace on LTE performance, our speeds, our capacity, our growth, all of the great things we've talked about in this set of results. So, VoLTE is a big deal.

I love to shame my competition into throwing out some numbers and see if any of them can match 5% or 10% of their calling volume at this point in time. One of them is at 0%.

I won't mention them, otherwise I'd have to take a drink I think. But there, we are.

So, VoLTE moving very, very well. And first to Rich Communication Services, first to Video over LTE, and the first and now the most dominant carrier on VoLTE, so great progress.

Okay. Let's go to the next question on the phone.

Hi. This is actually Cathy Yao calling in for Craig.

I just had a question on bad debt expense, which includes the loss from sale receivables. That number increased.

I think last time we had talked about it, you mentioned that bad debt expense rose earlier in the year because of increasing build size (47:11) rather than an actual increase in the frequency of defaults. It looks like the prime mix went down in the quarter, which you attributed due to the sale of receivables.

Can you talk a little bit more about the moving pieces and what you're doing in terms of tightening up credit policies as you mentioned in your investor briefing?

Yeah, sure, and good morning.

Hi.

We, in the third quarter, definitely signaled that we'd see a slight uptick in bad debt expense in the fourth quarter and that's exactly what happened. I think more importantly, going forward, churn is definitely a forward indicator.

We're highly confident that Q1 results will be sub-Q3 levels of bad debt expense. When you look at some of the details, there actually was a sequential decrease in bad debt expense, but we, on our securitization of receivables, did an extension to the facility that accounted for a slight uptick in that category relating to some accounting ramifications of that extension, so great news.

We also talked about, in prior calls, the increase was a function of a shift to subprime during the cash-rich tax season of the prior year. And certainly...

Right.

...there is an impact due to higher amounts financed on smartphones. But to really counteract that for the upcoming year, we've taken several steps that have tightened credit for subprime during the first quarter of this year to counteract that phenomena that we saw in the prior year.

So, yeah, we are very focused on this issue, and you'll see a lot of real positive developments in Q1. And thank you for pointing out the prime/subprime mix.

When you look at our disclosures in the K, the face of it shows that there was more of a shift to subprime. That is solely a function of the EIP securitization.

The facility that we put in place has a cost of capital of 2%, and we spent a great deal of time optimizing this throughout the year. We could have knocked the transaction out much earlier at a higher cost but we're looking at efficiency of the securitization and, of course, one of the very low cost of capital.

And we did that through tranching off higher prime segments for the securitization. And since those went off balance sheet, there's a distortion in the mix.

In our fact book, we do normalize that, and there has been no change whatsoever in the prime/subprime mix from Q3 to Q4.

Okay. Got it.

Thank you. That's very helpful.

Okay. Next question on the phone.

Okay. Thanks.

Just a couple of questions on some of the metrics, first on churn. There's a lot of – you guys gave a lot of detail firstly around band 12 and Binge On, but you got tougher comps coming in the first quarter.

Maybe for Braxton, do we have a sense that you're going to continue to see the same sort of year-over-year trends that we've seen up until this point as we look out to 2016? And similarly on ARPU, you saw some – actually some nice sequential improvement in ARPU on a year-over-year basis, and you talked about higher data, tax rate.

Can we depart from sort of the flat ARPU outlook and potentially look for some improvements in ARPU going forward? Thanks.

Yeah. Sure.

So, I think Mike touched on this earlier. One of the real benefits of the rapid roll out of the 700 megahertz is higher customer retention and satisfaction and that's one of the underlying trends that we're seeing in churn.

And as we continue to seed the base with 700 megahertz handsets and as we continue to roll out the spectrum that we acquired in the fourth quarter and the new spectrum that we just acquired, there should be goodness coming. Early indications for Q1, very favorable trends in the churn profile.

From an ARPU standpoint, we continue to look at this as general stability. And John, I think one of the things that you have to do is you have to look at some of the impacts of Data Stash on ARPU.

Data Stash is cash received that's deferred to future periods. There was about a 1.2% positive impact in the fourth quarter on Data Stash due to the expiration of the gift that we were given.

But I was very clear in the guidance section on Q1, we expect about $150 million drag in the first quarter, and that's a function now that we don't have a gift, people are on full deferral mode and they're building up to that 20 gigabyte cap. So, we'll see that build for the first half of the year, and then, really normalize for the balance of the year and future periods and it'll only be a function of growth in the base versus the entire base being penetrated with Data Stash.

But there are a lot other puts and takes. We're very focused on family plans.

And you look at our customer per account metrics where we've shown constant significant progress in the pulsing of family plan promotions in and out of the marketplace. And while it provides a higher MPV to our business, that is somewhat of a drag on ARPU.

Now, offsetting it on the plus side, the positive effects of Binge On that Mike talked about, positive effects on data attach, and we have an unlimited family plan promotion in the first quarter, that will have a positive impact. You take all the puts and takes together, we continue to message general stability from an ARPU standpoint.

But I do want to point out, looking at average billings per user, average billings per account, you've seen consistent significant increases on a year-over-year basis of the total consideration being paid into T-Mobile, which is a testament to the value proposition that we're bringing our consumers.

I see Mike leaning forward trying to jump in and give additional detailed guidance. Are you, Mike (54:17)?

Oh, yeah. You also asked about churn.

It's going really well for the reasons we talked about a few minutes ago. Our customers are more satisfied than ever.

Our churn levels have been falling throughout the year. Q4 was our best quarter of the year on churn when you look at it on a year-over-year basis with 27 basis points of improvement, which was just terrific.

So, our team is really killing it when it comes to satisfying customers and keeping them at T-Mobile. Last year in Q1 was an all-time record on churn.

So, that was our best quarter. And we see a real opportunity going forward to potentially establish a new all-time record.

So, we're feeling good about the trend lines.

Great. Thanks, guys.

What Mike means to say is he's highly confident that we will have better churn in Q1 than ever before. Listen, I just want to put one tiny – again, I know this is earnings and everything is going to be very quantitative – but there is something that's happening at T-Mobile that you can't ignore and I say this all the time since we started this journey, getting aggressive on the marketing, acquiring customers has two things that we needed to show.

One is that it would lead to revenue growth, would lead to profitability, would lead to cash and we've talked about that today. Second thing, though, is that ultimately, the network would become the same breadth and reach and speed or better than anybody else, which it has and that's why we will continue to fight the perception issue because customer experience for us is improving.

And that's why churn is at all-time low. But please don't jump past the fact that three out of the last four periods of six months each that our customer care organization was voted JDP number one, and I will tell you that in the latest period, they had the highest score ever by a wireless carrier ever in the United States.

So, that experience and the culture of this company, which I would tell you, goes beyond just the customer care organization. Every employee in this company spends every waking moment either on social or directly taking care of customers and that's a big deal.

You won't see us referring to our customer care organization as a unit cost that needs to be decreased. It's a significant value add of our business and it's part of why, altogether, we do see ourselves moving to churn levels that the company has never seen before.

Okay, next question.

Thanks. Couple of quick questions for Braxton on the guidance.

So, Braxton, you humiliated your subscriber net add guidance for 2015. I'm wondering if you're taking the same sort of conservative approach to EBITDA guidance for 2016.

And the guidance range is pretty wide. Given that subscriber growth doesn't have the same drag on EBITDA now with EIP and leasing that it used to, what determines where you come in within that range or maybe even above the high end of the range?

And then finally on this topic, as I look at the midpoint of cash EBITDA guidance and CapEx guidance and what you're paying in interest expense, it seems like you're looking at sort of equity free cash flow of about $2.5 billion before you factor in the impact of working capital drag and factoring – what should the working capital drag in factoring be? What should we be sort of thinking of for those factors to get to get to equity free cash flow?

Thanks.

Braxton, I think the first question was I know you just gave subscriber guidance five minutes ago but are you laying down – and this is the first tee on golf, and we think that you're lying about your handicap. So, I think your track record over the past couple of years of significantly outdoing your guidance has caught up with you.

Yeah. The gig is up, Jonathan.

No. We're playing exactly the same game plan that we played the last two years.

We did actually increase the postpaid net add guidance range over where we started at 2015, which is a signal of our confidence and the momentum of Un-carrier. But from an EBITDA standpoint, you have it absolutely correct.

Our internal aspirations are to be at the very high end, if not exceed and we feel we have adequate runway within the EBITDA guidance that we've given. The way I'd look at the EBITDA guidance is almost as a layer cake.

Reported EBITDA includes the non-cash benefit from leasing and the non-cash drag from Data Stash, and you subtract layers of the cake, you derive a core EBITDA of between $8.4 billion and $8.7 billion. So I think you're looking at that absolutely correctly, and we do believe again that the growth is a variable on EBITDA, but that no matter what assumption you look at that will be probably within that range.

From a free cash flow standpoint, I think that's one of the really exciting things that's occurring with the T-Mobile story, and it's the third leg of the stool on the financial strategy that we've been executing, having a significant growth platform, double-digit increases in revenue translating to double-digit increases in core operating EBITDA, which then translates into significantly ramping levered GAAP operating free cash flow after all the changes in working capital. We expect a significant increase in the cash flow.

You can derive pieces of that from our guidance. We've not put a range around our cash flow this year, importantly due to two reasons.

The first reason is the unknown amount of expenditures that will ultimately happen in regards to spectrum and what the debt carry would be associated with that. I'll point back to my prior comments which we stand behind going into this quiet period of the auction.

The second unknown is what really transpires from a growth standpoint. Obviously, we're conservatively positioning our growth guidance.

John's given the color. We got significant momentum going with the quarter.

We're very happy with what we're seeing. But there is significant changes in working capital associated with how quick and how fast we're growing.

So we're leaving the levered operating free cash flow guidance with all changes in working capital at the level of a significant ramp.

Right. But you commented sort of the midpoint of expectations on EBITDA.

Can we assume the same increase in free cash flow that you see in EBITDA for the year?

Again, there's true variables, what is our true interest carry going to be and how much growth that we have. But I think, directionally, you're looking at it correctly.

Awesome. Thanks, guys.

You're welcome.

Let me jump over and take one of the questions that's coming in from the IR site, Andrew Beal (1:02:16). SG&A grew 15% in 2015 versus 11% service revenue growth.

Why is that? And can you get SG&A back below 40% of service revenues?

Thanks.

Yeah. So when you look at SG&A, really interesting story there.

In true G&A, there was about $200 million year-over-year increase, and roughly half of that is bad debt expense. And again, we've talked a lot about bad debt expense on the call.

The other half is the transformation that we're undergoing in our IT infrastructure. We're modernizing our back office systems.

We're migrating from facilities-based apps to cloud-based apps. There's a different accounting construct when you go to cloud.

And all of that's good news because at the completion of the modernization efforts we expect on significant efficiencies coming through the business. The balance of what we're doing is a function on the S part of SG&A.

And the increases that we're seeing relate to the overall volume that we're seeing of gross adds increasing during the year. Very targeted.

Our spend is certainly on at the level that you're seeing with AT&T and Verizon, or for the Drinking Game Dumb and Dumber. And the way to look at this, I think, appropriately is from a cost per gross adds standpoint.

And when you take the total selling expenses divided by the gross add production, we're fairly flat on a year-over-year basis. So, really, no changes other than continuing scale of the business.

Okay. There's a question Jim Patterson sent in, which is how is the M2M or machine-to-machine business coming along?

Is there a transition from 2G to 4G underway and timeline?

It's a real strong point for us. And one of the things you see within our wholesale business is that while there has been some softening of the low-end wireless subscriber, MVNO type of business that we see, in favor of big brands like MetroPCS that I already talked about.

To counterbalance that, machine-to-machine is really taking off. And it's based on the trends that you've heard of a million times, the Internet of Things, and it's real and people want access to these wireless networks.

One of the things that I think is going to favor T-Mobile in 2016 in this area is that we have made an announcement and the commitment to our machine-to-machine partner base that we will have a GSM layer up at least through 2020. And so, I'll get to your question about LTE coming on in a minute, but this is really important because there's a big legacy base out there whether it's alarm systems, all kinds of applications that are already on the GSM base.

And we're the only carrier committing to have GSM in place through 2020, which is a huge strength. The other thing we're doing is working very closely with our partners to transition to LTE.

And we're seeing the cost of modules coming way down, and we're helping with that. And it's also going to be a source of strength for us as we refresh these relationships and bring new relationships in.

So, Jim, generally, speaking, it's going really well, and we're very optimistic about machine-to-machine growth in the next year and two years.

If I could just add a couple of points on the tech side here. And so, you guys understand what's happening with GSM.

It accounts for less than 5% of our core volume today. And so, back to the top of the discussion on capacity and growth, we're driving extremely hard into LTE for a voice experience.

And what we're doing with GSM, as customers migrate away from all 2G voice experiences, is we're now able to commit this greater volume of spectrum to LTE and at the same time really thin out the GSM layer. And you've seen some of our competitors abandon GSM in a huge rush because they haven't figured out how to carry great services like many of the M2M services on a thin GSM layer.

So we're going to do both. We'll maintain GSM.

Keep it thin. And at the same time, migrate the lion share of our use on the network over to LTE.

Okay. Let's go back to the phone.

We'll take one or two more.

Thanks. Good morning, guys.

Good morning.

Good morning, Ric.

Seeing Braxton's previous hat, I think it might be worthy of a question about Mexico. How is the No Borders going along and then I'll come up with a follow-up question.

Go ahead, Mike.

Yeah. This is a big source of strength for us.

As you know, in the middle of the summer, we announced Mobile without Borders. It was an amp of one of our prior Un-carrier moves, Simple Global.

And this is still one of the biggest reasons why people come to T-Mobile. We started down this path in the fall of 2013 and still today, over two years later, it's distinctive.

It has not been copied. You can travel all over the world with T-Mobile and have completely unlimited and free data.

You can have free texting. Your voice minutes are $0.20.

And in Canada and Mexico, it's full speed LTE and minutes are included in your plan. And so, just removing borders is something that is particularly important for people that live near borders, but it's also important to business customers and many other segments.

We've seen our business respond in places like Southern California, Texas – in Texas, in border cities like Seattle. So it's really nice to see the business responding.

And, of course, we're investing in local advertising in these areas as well to make sure people know that when they cross that border, absolutely nothing changes. They just keep using their plan as normal.

Okay. That's great.

And then maybe a question for Neville as well. You've done a great job on LTE, VoLTE, the low band stuff, the treadmill never stops.

What are your thoughts on 5G? What the heck is it going to be?

Is it low band? Is it high band, connected cars, virtual reality, augmented reality?

But just kind of as we look out into the future give you a chance to wax on maybe about 5G.

Yeah, I think it's all of those things, Ric. So, it's interesting, right?

We're starting to see a lot of news starting to form in and around the 5G space. One competitor has pushed out and talked about, I think in a somewhat misleading fashion, about consumer 5G in what I think the near term, inside the next couple of years.

I think the Verizon guys, if they're under so much pressure from us from a network perspective, they're looking to change the story and move on to the next thing. They're losing the LTE game very, very quickly.

So let's change the story and focus on 5G. The fact of the matter is there will be trials.

We'll be running our own trials as we move through 2016 both in the lab and in the field on some of the early 5G use cases. The real consumer benefit, and when you think about 5G in a smartphone, you're talking a 2020 story.

And nobody that understands the technical space and where we are with standardization would really tell you anything different. That doesn't mean there won't be trials and use cases that form and storm ahead of that.

But we are right there in the middle of the 5G game. We're very active both with CTIA, with now 5G Americas here in the U.S.

And, of course, we have an incredible partnership with Deutsche Telekom. And DT is probably the leading player in the European market in the 5G space.

So, we have access to all of that knowledge, all of that information. I think folks have seen some of the early announcements and Verizon trying to move and say that they're going to be the first to 5G, well, it's kind of BS to be honest.

We're there in the race. We'll make sure that there's nothing in the 5G space that we don't deliver to our customers on or before our competition does.

And just one last thought, the spectrum you mentioned it, Ric, there's going to be a lot of new bands of spectrum that get worked through and identified for 5G. And ironically, T-Mobile here, we've already got significant spectrum holdings in what we believe will be declared 5G spectrum allocations.

That doesn't mean anybody has the spectrum that they need for a full 5G vision, but we're out in front and the other guys for their trials are filing STAs, they're having to get test licenses. We already have a big swath of spectrum across many parts of the country that we can use for 5G tests and trials.

So, we're in a good spot. I think we want to manage consumer expectations carefully here and make sure folks understand that, yeah, there is going to be great 5G stuff, high speeds, really low latencies, but it's going to be a while yet.

So let me filter out some of what Neville said in a more aggressive way. A couple of things.

The piece that we do here is that there is an appetite out there for the world to understand what is 5G, when is it coming, what does it mean to me, and is there an inherent advantage if anybody has it. So we take that.

Secondly, though, what Neville said I believe is extremely visible right now, which is Verizon has spent so much of their existence just leaning back on having, in their minds, the best network and that's significantly under attack. So now they're trying to change the definition to having some inherent advantage of this next-generation capability, and I will tell you that up to and including a couple of weeks ago when Lowell McAdam sat on TV with Jim Cramer and tried to describe a Super Bowl of the next Super Bowl with a 50x speed on a consumer device in the audience, that is pure [profanity] (01:12:50); it's not going to happen.

Either he doesn't know or what they're attempting to do is what they've done several times, is to connect the current to a long-term strategy for 5G, but call it 5G way before the standards and/or the handsets and capabilities are available. What I think what we will do is point out, as Neville said, our testing, our own laboratory environment, DT's capabilities, the spectrum we already have, I think what we'll do is just factually come out and help you understand when it's coming and why we are not even not at a disadvantage, but we are kind of in an inherent advantaged situation.

But it's not going to be 2017 or 2018 where consumer applications are going to be changing the way you watch the Super Bowl. So, sorry to point that out.

So, you can just do what you do at most Super Bowls, which is watch our commercials and point out how great they are. Okay.

Let's go to one more question on the phone.

First of all, John, my Periscope game has definitely stepped up. If you were watching yesterday, I had a great one with some wolves out in South Salem, in New York.

So, everyone should...

And (1:14:04)

...everyone should subscribe to @Walt. No, there was 100 concurrent streamers.

I think I had like 300 total. The game has stepped up there, @WaltBTIG.

Please subscribe. John, can you just, A), go back to the A block question, which is are you adding distribution points in these areas where you're lighting up A block?

Because if you look up in Westchester and Connecticut, you put 700 megahertz there, so now we're getting coverage, but are you going to start to add more T-Mobile stores in some of these areas that you're lighting up?

Yeah. And I think, Walt, I think Mike attempted to answer this a couple of times.

But I think what we've said is we currently cover about 230 million or so POPs with retail distribution. And we see an immediate possibility of covering another 30 million to 40 million more POPs with retail distribution.

And we're already underway, mostly through TPR, to add 300 to 400 more retail stores immediately, but more following beyond that. But, Mike, is there any...?

Nope. That's it.

So, yes, Walt, that's a big, big part. And I – as I'm going through all of the Twitter feeds, there's quite a few customers, and it happens mostly on My Social, and I know it would be hard for you to understand, but My Social is one of those where a lot of people actually come in and speak to me.

But quite a bit of it is, hey, we love what you're doing, when are you coming to Arkansas, or when are you coming here or when are you coming? And I think that is a big part of what we do.

So, we immediately think there's a 30 million to 40 million more POPs of coverage that we can build retail distribution on.

TPR stands for T-Mobile Premium Retailer for people listening in. That's a partnership strategy.

We've rolled out stores with partners. We'll also be doing some corporate stores, and we're coming today to you from our first signature store here in Times Square, as John said a few minutes ago.

And we expect to do more of this as well, not a lot more, I mean these are signature stores, but there are some more of these coming your way as well, big format, experiential stores where you can really see the full power of wireless and what it can do for you.

And, Walt, I promise that I'll come in to one of your Periscope and share with my followers, and you may have a record...

John, I don't need your – John, I do not need your help. The quality of my Periscopes were going to attract plenty of users.

But I do have one follow-up. I do have one follow-up which is, can you talk about any thoughts that you may have in 2016 about launching your own over-the-top video service?

Something to add another service, maybe, for your customers? Obviously, you're getting a lot of experience with Binge On.

It's something you can integrate on the wireless side. Just talk to us about, is this something you're looking at, and what's the possibility of getting something done in 2016?

Yeah. I'll start.

I mean, it's what we said from the stage when we were doing Binge On. It's going to depend on what our customers want.

That's what always guides the Un-carrier strategy. We listen and we figure out what they want, what can change the industry, and then we go and do that.

It's a pretty simple formula on Un-carrier. What we said then was the jury is out.

What we had to go on at that time was go90 from Verizon. It was extremely unpopular.

And so, we were looking at it saying, hey, that's obviously not something that customers' want, which is to hire Verizon, to curate their content for them. But we have our ear down, we're listening, and if it's something our customers want, then we'll look at it.

Yeah. And, Walt, I haven't used this analogy in this call, so I'm going to put it out there one more time because it's really a good reminder and we said at past quarters in a row.

We maintained the belief that all content is going to the Internet and all Internet is being consumed mobile. What we've done now is we've made it very clear in the recent past that in that continuum there's one thing we do really well and we're going to focus on it.

But things like Binge On where the (1:18:00) expressing how we can use our position to migrate on that continuum in ways that people hadn't thought about. So, what I think we've done is we served notice that either through partnership, merger and acquisition, and/or investment, we are going to use that position in this brand to migrate what's happening on that continuum, and we rule out no aspect of it.

But I think it's also got much broader implication for the larger players in the cable industry and the content industry. And I think we're very pleased and proud to be really good in growing in brand and prominence in one of the pieces of that very important and growing continuum.

Well, got it. Thank you.

Let's take our last question before Walt speaks anymore.

Great. Thanks for fitting me in.

I wanted to go back to, I think it was Jonathan Chaplin's question regarding free cash flow and EIPs. So, you guys sold $795 million of EIP receivables in the fourth quarter.

I was wondering if there was a comparable number we could think about for 2016 that you think you could ultimately sell or at least give us an idea of what the capacity is of what you could sell? And then another question that we get quite often is the potential impact of leasing on upgrades.

So, if you think about it, with leasing I think that you guys allow customers to potentially trade in their device ultimately three times I think per year. Not that I think that that's going to happen, but if you do start to see customers trading their device more frequently than they do on EIP, one could argue that there could be a greater cash outlay responsibility by T-Mobile that could potentially be negative at least in the short-term to free cash flow.

What do you think that the impact of leasing is going to be on the upgrade velocity as we go forward? Thank you.

Yeah. Sure.

Yeah, we'll continue to look for opportunities and securitization. Leasing creates some different challenges because you basically have a cash stream flow versus an asset on your balance sheet.

And you have to look at the construct a little differently. It is something that we're taking a look at.

We have zero interest in doing a transaction that the yellow guys did that has a high single-digit cost of capital associated with it. We have some ideas.

We'll take a look at it. But I think from a guidance standpoint, I would assume if we do anything, it would be at levels consistent with what we've done for 2015.

And from a upgrade standpoint, we've had to jump on the JUMP! construct for several years.

That was one of our very early Un-carrier moves. We understand the upgrade patterns very well.

And I think the way I would look at upgrades is that it's going to be episodic. When there's launches of new generation of iconic handsets, you'll see upticks and upgrades either under EIP or under JUMP!

On Demand. And when there's a lack of that type of catalyst, it will be more normalized.

But the one thing I want to point out is when there is an iconic phone launch, that's a tremendous opportunity for T-Mobile. We create a lot of pent-up switching demand where we're going to definitely over index on growth into our company given our relative market share in the marketplace.

So, we look at it as a real opportunity when those episodic signature launches come.

Okay.

So, I guess, the point there being is that you guys...

Go ahead.

I guess, the point there's that you guys aren't expecting to see any meaningful increase in upgrades as a result of bringing on leasing?

One of the things, Colby, that Braxton I think pointed out was that, remember, EIP has had JUMP! attached north of 80% ever since the beginning.

So, almost everybody has had these upgrade rights through almost the entire Un-carrier journey. So, JUMP!

On Demand doesn't really change the equation vary materially. And there's sort of a natural – and I think your question got to this.

There's sort of a natural inhibitor as well. People don't exercise the rights they have because it's a big project to change out your phone.

So, there's a certain impedance to it, anyway. And when it does happen, it tends to happen about around big phone launches as Braxton said, and we're able to look at it and say, actually, that's a positive development for satisfaction and retention.

Great. Thank you.

Okay. I think we're going to cut it there.

I appreciate everybody's patience and time and sending questions in under many formats. And I appreciate everybody listening, and we look forward to speaking to you again next quarter, if not before.

Thank you very much.