Just four weeks ago, T-Mobile touted "industry-leading" post-paid net account additions of 299,000 subscribers and post-paid churn of 0.77%, as well as growth in Q2 service revenue, net income and free cash flow. 

And four years ago, as it worked to close its acquisition of Sprint, T-Mobile promised to grow its ranks, not diminish them. 

But on Thursday, the self-described "Un-carrier" announced that it's laying off 5,000 workers, mostly "corporate and back-office staff," with some technology employees included. 

"Today’s changes are all about getting us efficiently focused on a finite set of winning strategies, so that we can continue to out-pace our competitors and have the financial capability to deliver a differentiated network and customer experience to a continually growing customer base, while simultaneously meeting our obligations to our shareholders," T-Mobile CEO Mike Sievert, in a note to staff that was included Thursday in a company 8-K filing to the SEC. 

Within the broader wireless telecommunications industry, T-Mobile's cuts hardly stand out, with AT&T, Verizon and Dish Network, among other wireless companies, also conducting layoffs this year. 

But T-Mobile's execution has sensitivity attached to it based on the declaration made by former CEO John Legere, who in 2019 made the kind of promises you'd typically expect from a telecom executive trying to get the $26.5 billion Sprint M&A  deal approved by regulators.

"This merger is all about creating new, high-quality, high-paying jobs, and the New T-Mobile will be jobs-positive from Day One and every day thereafter," Legere said. 

In April, GeekWire happened to notice that the combined company actually employed 9,000 fewer workers than it did before its two parts were formally combined three years earlier. 

Responding to the pub, a T-Mobile press rep did some top-notch contorting: “We’ve upheld our jobs commitment," the rep declared. 

"Before we merged with Sprint, we said we’d have more employees as a combined company than the two standalone companies would have had on their own without the merger — and we have done just that," the rep added. "The merger has also allowed us to do many things we otherwise would have been unable to do like deliver choice and connectivity for underserved and small markets and rural areas, in addition to creating new businesses and growing our consumer and enterprise businesses — all of which have created thousands of jobs for T-Mobile, as well as our vendors and partners.”

Despite a renewed spike in new COVID-19 cases across the U.S., the Consumer Technology Association is moving forward with the return of a live CES event in Las Vegas in January, with T-Mobile CEO Mike Sievert delivering the keynote address. 

This is CTA's first keynote announcement for the event, which will unfurl in Las Vegas from Jan. 5-8, with media days taking place Jan. 3-4.

The bold return of the world's biggest trade show to live status is being announced as new COVID cases surge to nearly 60,000 nationally and the number of fully vaccinated individuals continues to hover at only around 50%. Nevada just reported 2,400 new COVID-19 cases and 20 COVID-related deaths over the weekend. 

CES' announcement also comes as producers of other major trade events anxiously press on with a return to live collaboration, saying damned the delta in the process. 

The National Association of Broadcasters, for example, is planning to convene NAB in Las Vegas Oct. 9-13, while the IBC is aiming to return its eponymous yearly event in Amsterdam during the dimly lit Dec. 3-6 period. 

Meanwhile, the recently merged SCTE*ISBE and CableLabs are planning to go live in Atlanta with Cable-Tec Expo Oct. 11-14. 

"As we return to in-person events, we look forward to convening innovators and business leaders from around the world who will showcase how technology impacts and improves every facet of our daily lives,” said Gary Shapiro, president and CEO, CTA, in a statement. “The pace of innovation has accelerated over the last 18 months, and the rapid roll-out of 5G will only increase the momentum. There’s so much excitement in this space and for the first time, we welcome Mike Sievert to our keynote stage to share more about T-Mobile’s vision for fueling 5G innovation.”

So how is T-Mobile’s long-awaited “Uncarrier” revolution of pay TV service going a little more than 60 days after launch?

Meh.

“It’s neither a massive cost center or a massive profit center,” said T-Mobile CEO Mike Sievert, speaking Wednesday at the Citi 2021 Global TMT West Conference.

The virtual pay TV service, branded TVision, is fulfilling its role as an option for T-Mobile to offer TV service to customers who purchase 5G fixed broadband service. For now, it remains confined to T-Mobile customers, as well as those belonging to recent acquisition Sprint. 

Also Read: T-Mobile’s TVision: It’s the Video Multitool that Wireless Rivals AT&T and Verizon Lack (Review)

Sievert, along with T-Mobile CTO Neville Ray, spent the bulk of Wednesday’s discussion focused on 5G rollout and wireless customer growth initiatives. 

Absolutely no tidbits were offered in terms of TVision customer growth or usage.

TVision offers three traditional-looking mid-range vMVPD bundles, starting at $40 a month, along with a somewhat revolutionary $10-a-month bundle featuring a smattering of popular entertainment networks. Almost immediately following its launch of the service at the beginning of November, T-Mobile was challenged by its program licensing partners, namely ViacomCBS and Discovery, for its method of dividing channels among its tiers.

Some didn’t like the way they were confined to the $10-a-month tier. 

T-Mobile’s answer was to offer any customer signing up for the three bigger “Live TV” tiers access to the cheaper, super-skinny “Vibe” channels.

The question is, how much did this undermine the TVision business model? 

A little more than two months after closing its $26 billion merger with Sprint, T-Mobile reported a surprisingly robust first quarter despite setbacks associated with the COVID-19 pandemic, and according to some analysts, is positioning itself to be a wireless leader as 5G technology starts to take hold.

T-Mobile completed its Sprint merger on April 1, ending what had been a seven-year dance between the third- and fourth-largest U.S. wireless operators. T-Mobile first began exploring a Sprint merger in 2013, but didn’t make an offer until more than two years later. What followed was an 18-month federal approval process, followed by another six months battling with a handful of state attorneys general trying to block the deal. When the dust cleared, the pandemic forced T-Mobile to close its retail outlets across the country, delaying what was expected to be a major marketing push to increase awareness in the new T-Mobile brand.

“If one were so inclined, one might conclude that there is someone out there who just doesn’t want these companies combined,” MoffettNathanson principal and senior analyst Craig Moffett wrote in a note to clients. “For our part, we think New T-Mobile will be worth the wait.”

What has driven a lot of this optimism is a combination of T-Mobile’s Q1 results, which don’t include Sprint, and the promise of better days once the merger is fully integrated.

Q1 Strength

T-Mobile’s Q1 results were surprisingly good, especially during a pandemic that forced most of its retail stores to close. As the country went under lockdown, T-Mobile managed to add 777,000 new postpaid wireless subscribers in Q1, beating analysts’ consensus estimates of 752,000 additions. Though Q2 may be a bit lighter in terms of postpaid net additions — Sanford Bernstein analyst Peter Supino estimated T-Mobile would add about 100,000 postpaid customers in Q2 from the full effect of the pandemic — that is expected to turn around in Q3 and beyond.

The impact of Sprint churn won’t be known until Q2 results are released sometime in late July, but indications are that it has improved. Fueling that optimism is lower churn at T-Mobile during the first quarter; its superior network, which should increase customer satisfaction; and its aggressive rollout of 5G technology.

Churn at T-Mobile was 0.86% in Q1, well below the 0.99% most analysts expected and in line with much larger competitors AT&T and Verizon Communications.

“We believe this fact adds to our thesis that Sprint churn will improve substantially and quickly, to the benefit of growth and margins,” Supino wrote.

Supino estimates free cash flow for T-Mobile will double to $12 per share by 2023 and in the nearer term, lower churn rates will boost both consensus estimates and confidence in the merger. Supino’s own confidence in the deal is reflected in his
$124 per share 12-month price target on the stock, about 24% higher than its trading price of $100.17 per share on June 4 and 43% above its closing price when he raised his outlook on the stock.

For the year, T-Mobile shares are up about 28%.

T-Mobile has taken a different approach to 5G service than AT&T or Verizon opting for a slower-speed service (less than 1 Gigabit per second) based on the 600 Megahertz spectrum, which is easier to deploy and more adaptable to the spread-out rural areas where most of its customers live.

That’s why T-Mobile has been able to make its version of 5G available to about 215 million homes and now offers service in Detroit; St. Louis; Columbus, Ohio; and the San Francisco Bay Area, in addition to its initial rollout in New York and Philadelphia. In contrast, Verizon and AT&T have adopted millimeter wave technology that offers higher speeds (up to 10 Gigabits per second) but requires denser placement of towers. Verizon offers 5G in parts of 31 cities across the country (including New York, Los Angeles, Washington, D.C., and Denver) and expects to eventually be in front of about 30 million homes with the service. AT&T has said it is on track to deliver nationwide 5G service by the middle of the year.

While the 5G rollout continues, most Sprint customers can “roam” on T-Mobile’s 4G network — about 80% of Sprint customers have compatible handsets — and are finding the experience to be vastly better.

On a conference call to discuss first-quarter results, T-Mobile president of technology Neville Ray said about 10 million Sprint customers were using the T-Mobile network per week, or about one-third of the total postpaid subscriber base the company has with Sprint.

Sprint customer churn was a big question mark in the merger. It has historically been about twice that of legacy T-Mobile. Although it’s hard to predict what churn rates will ultimately be, T-Mobile CEO Mike Sievert said, he noted that customers leave a provider for two main reasons: network and value. In his mind, the New T-Mobile is providing both.

Value Proposition Is Key

Value, perceived or otherwise, can make a big difference in the wireless space. Cable companies like Charter Communications, Comcast and Altice USA have introduced aggressively-priced wireless offerings over the past two years and have seen spikes in customer additions. In Q1 alone, Charter added 290,000 wireless customers (nearly double that of the previous year), while Comcast added 216,000 (ahead of 170,000 in 2019). Altice USA, which launched wireless service in September 2019, added 41,000 customers.

On the T-Mobile call, Sievert suggested he expects value to drive consumer decisions as stay-at-home orders are lifted: “As the nation starts to emerge post-COVID-19, customers across the industry will likely be looking for better value in a tougher economic environment.”

Sievert added that he expects “AT&T and Verizon customers will most certainly be looking to get out from under their high monthly bills in search of a better value.” 

After a nearly two-year slog through the federal approval process and a brief scuffle with a handful of states' attorneys general, T-Mobile dragged its $26 billion merger with Sprint Corp., across the finish line Wednesday, creating what it hopes to be a much stronger No. 3 wireless carrier.

T-Mobile first announced its intention to merge with Sprint on April 29, 2018, confirming what had been at the time one of the worst kept secrets in the telecom business.  The merger faced some backlash from consumer groups objecting to the removal of a viable wireless competitor (Sprint), but the company managed to pass federal regulatory muster by agreeing to conditions to sell its prepaid wireless business and a chunk of spectrum to Dish Network.  Last year, a handful of states’ attorneys general -- including AGs in New York and California -- sued to block the deal, but a federal court ruled in favor of the telecom companies in February. 

With the closing of the merger, the New T-Mobile will be led by former T-Mobile chief operating officer Mike Sievert. Sievert had been expected to assume the CEO role from John Legere on May 1, but the company said it decided to accelerate the transition.

“I’ve been fortunate enough to lead this company for the past seven years, but now it’s time for me to hand the reins over to Mike Sievert,” Legere said in the press release. “The Board of Directors and I agree that it makes perfect sense for Mike to assume his leadership role on day one of the new company. He’s ready!”

The new T-Mobile has committed to spend about $40 billion over three years on 5G deployment and to expand its rural wireless service to reach 59.4 million homes. It has also promised to deploy a new in-home broadband option to more than 52% of U.S. ZIP codes, with a plan to obtain 9.5 million U.S. households by 2024, with 20% of those homes in underserved areas. The new T-Mobile also expects to build 600 additional retail outlets.

“WIth this powerful network, the New T-Mobile will deliver real choice and value to wireless and home broadband customers and double down on all the things customers have always loved about the Un-carrier,” Sievert said in a press release. “T-Mobile has been changing wireless for good — and now we are going to do it on a whole new level!”

T-Mobile stock was up about 2% ($1.9 each) to $85.81 per share in early trading April 1.