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T-Mobile exceeds ambitious 2020 5G goals

Yahoo Finance’s Brian Sozzi breaks down T-Mobile’s 2020 success.

Video Transcript

MYLES UDLAND: Let's talk a little bit more about a name that came out yesterday with some preliminary results for their fourth quarter, giving investors an overview of where they think they're headed in 2021. And that is T-Mobile. Brian Sozzi, I know you were listening to the company's call yesterday. You've gone over the results, and you're set to talk to the company's CEO as well later this morning.

BRIAN SOZZI: That's right. Looking forward to speaking with Mike Sievert at 11:30. But listen, T-Mobile stock is up now close to 70%, helped-- up 70% over the past year, helped by about a 3% gain here in the early going. Why is it up? Well, I think they really explained, you can really decode it in what they said last night at the City Tech conference that I keyed in on.

They came out and they said they had 5.5 million postpaid net additions in 2020. That's their highest number ever, specifically in the fourth quarter. Very competitive with the new iPhone 5G launch, 1.6 million postpaid net editions. That's more than two times the guidance they just put out about 2 and 1/2 months ago on their earnings release. So the market certainly likes that.

They also like, I think, what Mike Sievert said at the conference on 5G. They have 106 million folks on their ultra band 5G. They came out last night, they set a 200 million target by year end. Also, maybe number three reason why you're seeing the stock up here in the early going.

They hinted strongly when they report earnings in a couple of weeks that they might come out with some longer term targets. The Street, Myles, as you know, loves to see longer term targets. And within that, they hinted they might be a little more aggressive on share repurchases than they have been because for the past, let's say, year, they've been integrating the Sprint acquisition.

MYLES UDLAND: You know, and we should note for our viewers, our current company is Verizon, of course, competes with T-Mobile in the wireless space. But Sozzi, I wanted to follow up, you know, specifically on the 5G kind of component here and maybe think about it more broadly.

Because, you know, you've been in the game a long time. You've seen a lot of these paradigm shifts where all of a sudden, industry X is all about this new technology. We see it with Verizon, AT&T, T-Mobile. All they talk about is 5G, 5G, 5G. In terms of how T-Mobile is saying it, what is that for them today, and how is it changing the plans they're offering, the phones they're selling, or the customers they're acquiring?

BRIAN SOZZI: Well, I think from an investor standpoint, and you're right, I guess I have been around for a while, I know I still look 22. But yes, I have seen a lot of these cycles before. But this is a real cycle. This is a real-- going to be a real upgrade in how people consume content, consume the internet. These are faster speeds.

I just got a new 5G iPhone, and it really works. Like, the speeds are noticeable. And I think over time, because of those extra speeds, you will see T-Mobile, you will see Verizon potentially being able to push through higher price increases on monthly bills. Right now, you're not necessarily seeing that. It remains very competitive on phone plans.

You're seeing a lot of unlimited phone plans. You're seeing these 5G iPhones essentially being given away right now to get people interested in 5G. But ultimately, I think you're going to see a lot of pricing power exerted across the board. Really driven by Verizon and T-Mobile, AT&T, not so much.