T-Mobile US Inc (NYSE:TMUS) Q1 2019 Earnings Conference Call Transcript

Apr 25, 2019 • 04:30 pm ET

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T-Mobile US Inc (NYSE:TMUS) Q1 2019 Earnings Conference Call Transcript

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Q & A
Operator
Operator

Thank you (Operator Instructions) We'll take our first question from Philip Cusick of JPMorgan.

Analyst
Philip Cusick

Two, simple ones if I can. Mike, can you talk about where we are in the process of expanding the 4G network and distribution into areas where you don't have 700-megahertz spectrum and then Braxton, can you talk about just simply what was EBITDA growth on an -- just for ASC-606 and lease accounting. Thank you.

Executive
Mike Sievert

So, on the first one, I think we've reported in the past, we've done a major distribution expansion and this generally followed the expansion of the network, it's fairly agnostic to low-band versus mid-band. What it looks at is whether or not in that marketable area, we have sufficient coverage and enough households to be able to get two wall indoor coverage, and if we have enough households in that area with very high quality coverage, then we launch distribution and that can be through low-band mid-band or a combination there of. And so the POP coverage flows and then the distribution coverage flows.

We've now got distribution coverage to well north of 265 million people, and that's a big milestone from when we started talking about this a couple of years ago and told you about geographic expansion and that's two things, number one, the geographic expansion is starting to work, because this is an initiative that we've been talking about for some time.

We told you, it takes 12 months to 18 months for those stores to become productive, we're starting to see some of the results of that which is just terrific. And second, there's a lot of runway left; as we create more and more conditions where that's the case, particularly in the context of the new T-Mobile, where we can create a game-changing experience in more rural areas, there's lots of runway left in both scenarios.

Analyst
Philip Cusick

Can you help range some of the impact there, Mike, for this quarter or for the last few quarters?

Executive
Mike Sievert

Only to say it's contributing. And that it takes 12 months to 18 months for those stores to start producing and that our experience has been that the most productive expansion investments we've made have been in greenfield areas, pretty intuitive. Small towns, suburban fringe, those areas have out produced the expansions we did to add density in the urban cores. Our urban cores are our most productive areas by far, but of course there's cannibalization effect as you add distribution density in those areas.

And so, from a future investment standpoint, you'll probably see us focused more on suburban fringe and greenfield markets.

Executive
J. Braxton Carter

Yeah Phil. I think, one of the things that we really pride ourselves is transparency and providing investors with all those tools to truly understand the underlying momentum of the business. The new lease standard is fairly de minimis to the overall results and RevRec certainly has several moving items with it, but not overly material. I would just point you to our Q and to our