Item 1. Business
Item 1. Business
Business Overview and Strategy
Un-carrier Strategy
As America’s supercharged Un-carrier, we have disrupted the wireless communications services industry by actively engaging with and listening to our customers and focusing on eliminating their pain points. Our customers benefit from what we believe is an unmatched combination of value and network quality, unwavering focus on offering them the best possible service experience and undisputable drive for disruptive innovation in wireless and beyond. This includes providing added value and what we believe is an exceptional experience while implementing signature Un-carrier initiatives that have changed the wireless industry. We ended annual service contracts, overages, unpredictable international roaming fees and data buckets, among other things. We are inspired by a relentless focus on customer experience, consistently delivering award-winning customer experience, which drives our customer satisfaction levels while enabling operational efficiencies.
With what we believe is America’s largest, fastest, most awarded and most advanced 5G network, the Un-carrier strives to offer customers unrivaled coverage and capacity where they live, work and travel. We believe our network is the foundation of our success and powers everything we do. Our dense and multi-layer network provides an unmatched 5G and overall network experience to our customers, which consists of our foundational layer of low-band, our mid-band and our millimeter-wave (“mmWave”) spectrum licenses (see “Spectrum Position” below). This multilayer portfolio of spectrum broadens and deepens our nationwide 5G network, enabling accelerated innovation and increased competition in the U.S. wireless and broadband industries.
We continue to expand the footprint and improve the quality of our network, enabling us to provide what we believe are outstanding wireless experiences for customers who should not have to compromise on quality and value. Our network allows us to deliver new, innovative products and services, such as our High Speed Internet fixed wireless product, with the same customer experience focus and industry-disrupting mindset that we have adopted in our attempt to redefine the wireless communications services industry in the United States in the customers’ favor.
As part of our relentless, customer-first focus, we are transforming into an AI-enabled, data-informed, digital-first organization to continue delivering differentiated experiences to our customers. Leveraging the latest AI technology and digital capabilities, we are pioneering new approaches to serving customers with a platform to better anticipate and proactively solve their issues, offering personalized self-service options and taking authorized actions on their behalf, while simultaneously creating large-format customer experience stores for customers looking for an immersive experience, and increasing investment in domestic customer care. Our comprehensive T-Life app will further allow us to tap into customer preferences and radically simplify customer experiences in the future.
Our Operations
As of December 31, 2024, we provide wireless communications services to 129.5 million postpaid and prepaid customers and generate revenue by providing affordable wireless communications services to these customers, as well as a wide selection of wireless devices and accessories. We also provide wholesale wireless services to various partners, who then offer the services for sale to their customers. Our most significant expenses relate to operating and expanding our network, providing a full range of devices, acquiring and retaining high-quality customers and compensating employees. We provide services, devices and accessories across our flagship brands, T-Mobile, Metro by T-Mobile and Mint Mobile, through our T-Mobile and Metro by T-Mobile owned and operated retail stores, as well as through our websites (www.t-mobile.com, www.metrobyt-mobile.com and www.mintmobile.com), T-Mobile, Metro by T-Mobile and Mint Mobile apps, customer care channels and through national retailers. In addition, we sell devices to dealers and other third-party distributors for resale through independent third-party retail outlets and a variety of third-party websites. The information on our websites is not part of this Form 10-K. See Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations for additional information.
Services and Products
We provide wireless communications services through a variety of service plan options. We also offer for sale to customers a wide selection of wireless devices, including smartphones, wearables, tablets, home broadband routers and other mobile communication devices that are manufactured by various suppliers.
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Our most popular service plan offering is Go5G Plus, which includes unlimited talk, text and data on our network, 5G access at no extra cost, scam protection features, access to the same device offers as new customers and more. We also offer an Essentials rate plan for customers who want the basics at a lower price point, specific rate plans to qualifying customers, including Military and Veterans, First Responder and 55+, as well as Go5G and Go5G Next plans to deliver a full suite of plans that provide customers the features that meet their lifestyle and daily needs.
At the time of device purchase, qualified customers can finance all or a portion of the individual device or accessory purchase price over an installment period, generally of 24 months, using an equipment installment plan (“EIP”).
In addition to our wireless communications services, we offer High Speed Internet, which includes a fixed wireless product that utilizes the excess capacity of our nationwide 5G network. Our fixed wireless product is available to tens of millions of domestic households where we currently have excess network capacity, providing, for some consumers, an alternative to traditional landline internet or broadband service providers and expanding access to and choice for some consumers. With our High Speed Internet plan, customers can access the internet without worrying about annual service contracts, data overages or hidden fees.
We also provide products and services that are complementary to our wireless communications services, including device protection, financial services and advertising.
Customers
We provide wireless communications services to a variety of customers needing connectivity, but focus primarily on two categories of customers:
• Postpaid customers generally are qualified to pay after receiving wireless communications services utilizing phones, High Speed Internet modems, mobile internet devices (including tablets and hotspots), wearables, DIGITS and other connected devices (including SyncUP and internet of things (“IoT”)). We serve consumers as well as business customers, who are provided services under the T-Mobile for Business brand.
• Prepaid customers generally pay for wireless communications services in advance. We serve prepaid customers under the T-Mobile, Metro by T-Mobile, Mint Mobile and Ultra Mobile brands.
We provide Machine-to-Machine (“M2M”) and Mobile Virtual Network Operator (“MVNO”) customers access to our network. This access and the customer relationship are managed by wholesale partners, with whom we have commercial agreements permitting them to sell services utilizing our network.
We generate the majority of our service revenues by providing wireless communications services to postpaid and prepaid customers. Our ability to attract and retain postpaid and prepaid customers is important to our business in the generation of service revenues, equipment revenues and other revenues. In 2024, our service revenues generated by providing wireless communications services by customer category were:
• 79% Postpaid customers;
• 16% Prepaid customers; and
• 5% Wholesale and other services.
Substantially all of our revenues for the years ended December 31, 2024, 2023 and 2022, were earned in the United States, including Puerto Rico and the U.S. Virgin Islands.
Network Strategy
Utilizing our multilayer spectrum portfolio, our mission is to become “Famous for Network.” We have deployed low-band, mid-band and mmWave spectrum dedicated for 5G across our dense and broad network to create what we believe is America’s largest, fastest, most awarded and most advanced 5G network.
We believe our spectrum position and focus on technology leadership will continue to drive network differentiation. Our innovative Customer-Driven Coverage (“CDC”) approach to network investments, and leadership in deploying the latest network technologies including Massive Multiple-input/multiple-out (“Massive MIMO”), Voice over New Radio (“VoNR”), four-carrier and higher order aggregation, dynamic network slicing and the U.S.’s first broad deployment of 5G Advanced, are
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enabled by our scaled nationwide 5G standalone network. We are also part of an alliance working to bring Radio Access Network (“RAN”) and AI innovation closer together to deliver transformational network experiences in the future.
Spectrum Position
We provide wireless communications services utilizing low-band spectrum licenses covering our 600 MHz and 700 MHz spectrum, mid-band spectrum licenses, such as Advanced Wireless Services (“AWS”), Personal Communications Services (“PCS”) and 2.5 GHz spectrum, and mmWave spectrum.
• We controlled an average of 394 MHz of combined low- and mid-band spectrum nationwide as of December 31, 2024. This spectrum is comprised of:
• An average of 41 MHz in the 600 MHz band;
• An average of 10 MHz in the 700 MHz band;
• An average of 14 MHz in the 800 MHz band;
• An average of 41 MHz in the 1700 MHz AWS band;
• An average of 66 MHz in the 1900 MHz PCS band;
• An average of 184 MHz in the 2.5 GHz band;
• An average of 11 MHz in the 3.45 GHz band; and
• An average of 27 MHz in the C-band.
• We controlled an average of 1,033 GHz of combined mmWave spectrum licenses.
• In September 2023, we entered into a License Purchase Agreement with Comcast Corporation and its affiliate, Comcast OTR1, LLC (together with Comcast Corporation, “Comcast”) pursuant to which we will acquire spectrum in the 600 MHz band in exchange for total cash consideration of between $1.2 billion and $3.3 billion. On January 13, 2025, we and Comcast entered into an amendment to the License Purchase Agreement pursuant to which we will acquire additional spectrum. Subsequent to the amendment, the total cash consideration for the transaction is between $1.2 billion and $3.4 billion. See Note 7 – Goodwill, Spectrum License Transactions and Other Intangible Assets of the Notes to the Consolidated Financial Statements for additional details.
• We plan to evaluate future spectrum purchases in future auctions and secondary market opportunities to further augment or refine our current spectrum position.
• As of December 31, 2024, we had equipment deployed on approximately 82,000 macro cell sites and 52,000 small cell/distributed antenna system sites across our network.
Competition
The wireless communications services industry remains competitive. We are the second largest provider of wireless communications services in the U.S. as measured by our total postpaid and prepaid customers. Our wireless communications services competitors include other carriers, such as AT&T Inc. (“AT&T”), Verizon Communications, Inc. (“Verizon”), and DISH Network Corporation (“DISH”) as it continues to grow its network. In addition, our competitors include numerous smaller and regional providers, including Comcast Corporation, Charter Communications, Inc., Cox Communications, Inc., and Altice USA, Inc., many of which offer no-contract, postpaid and prepaid service plans. Competitors also include providers who offer similar communication services, such as voice, messaging and data services, using alternative technologies. In addition to our wireless communications services, our High Speed Internet service competes against other broadband providers, including traditional wireline solutions, such as Cable, DSL and Fiber broadband providers, and fixed wireless solutions, including AT&T and Verizon’s fixed wireless products, and Satellite Internet providers. Competitive factors within the wireless communications services and broadband industries include pricing, market saturation, service and product offerings, customer experience, network investment and quality, development and deployment of technologies and regulatory changes. Some of our competitors have shown a willingness to use discounted pricing or offer bundled services as a potential source of differentiation.
Human Capital
Employees
As of December 31, 2024, we employed approximately 70,000 full-time and part-time employees, including network, retail, administrative and customer support functions.
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Attraction and Retention
We employ a highly skilled workforce within a broad range of functions. Substantially all of our employees are located throughout the United States, including Puerto Rico, to serve our nationwide network and retail operations. Our headquarters are located in Bellevue, Washington, and Overland Park, Kansas.
We attract and retain our workforce through a dynamic and inclusive culture and by providing a comprehensive set of benefits, including:
• Competitive medical, dental and vision benefits;
• Family-building benefits designed to meet the diverse needs of our employees, including IVF and IUI, adoption and surrogacy benefits;
• Annual stock grants to all full-time and part-time employees and a discounted Employee Stock Purchase Program;
• A 401(k) Savings Plan;
• Nationwide minimum pay of at least $20 per hour to all full-time and part-time employees;
• LiveMagenta: a custom-branded program for employee engagement and well-being, including free access to life coaches, financial coaches and tools for healthy living;
• Access to personal health advocates offering independent guidance;
• A generous paid time off program, including paid family leave;
• Tuition assistance for all full-time and part-time employees, including full tuition partnerships with multiple schools; and
• A matching program for employee donations and volunteering.
Training and Development
Career growth and development is foundational to T-Mobile’s culture and success. We want to deliver the best experiences from the best teams, and one way we do that is by offering an array of development programs and resources to build diverse talent and empower our people to succeed through every step of their career. We put employees in the driver’s seat and give them access to mentoring, training, videos, books, job search and interview tips, and much more.
By strategically investing in the following three key areas of career development and learning, we are developing our talent now and for the future.
• Evolve skills and careers – Learn every day, champion relentless improvement, develop critical skills, explore career possibilities, and build the desired career;
• Advance leadership expertise – Build critical leadership capabilities, enable leadership growth at all levels, and develop skills to lead in the future; and
• Champion belonging and inclusion – Promote inclusive habits and behaviors and enhance belonging and connectedness.
Belonging and Inclusion
Our diversity, equity and inclusion efforts are focused on fostering a workplace that helps us better serve our customers and communities across the nation. We aim to create an environment where employees feel included, valued and empowered, contributing to a stronger, more connected business. T-Mobile has an inclusive hiring process that seeks diverse talent to be candidates for employment, but all of our hiring decisions continue to be based solely on merit.
Employee Resource Groups (ERGs)
Many of our employees participate in one of six Employee Resource Groups (ERGs) and their sub-groups, which are instrumental in promoting connection. Each of these groups is open to any and all employees, and there are 38 chapters nationwide that organize volunteer opportunities and local events.
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Our ERGs include:
• Veterans & Allies Network;
• Accessibility Community at T-Mobile;
• Multicultural Alliance;
• Asia Pacific & Allies Network;
• Black Empowerment Network;
• Indigenous Peoples Network;
• Eleva Network (focused on the Latino community and allies);
• Multigenerational Network;
• Pride; and
• Women & Allies Network.
These groups offer immersive experiences, mentorship programs, networking opportunities, and community service projects. They are designed to help participants grow as professionals and community leaders .
External Diversity Councils
In partnership with civil rights organizations, we had previously established two External Diversity and Inclusion Councils. These councils offered guidance for our efforts in areas like workforce recruitment, procurement, community investment, and corporate governance. The work with these external councils concluded as planned after a successful 5-year collaboration and the councils have been dissolved.
Suppliers
T-Mobile considers a broad range of suppliers, including those that are veteran-owned, disability-owned, woman-owned, minority-owned, and LGBT-owned, and we include small and large businesses of all kinds in our procurement processes. Purchases and contracts are awarded based on the best qualified and most competitive suppliers to enable T-Mobile’s success.
Environmental Sustainability
Efficiencies and Reducing Our Carbon Footprint
We are actively working to identify efficiencies in our energy usage and reduce our environmental impact by:
• Pursuing a science-based net-zero emissions target for 2040, covering Scope 1, 2, and 3 emissions;
• Investing in renewable energy, meeting our RE100 pledge since 2021, through initiatives such as Virtual Power Purchasing Agreements and clean energy projects producing over 3.4 million megawatt hours annually;
• Enhancing energy efficiency in our facilities, including retail stores, data centers, and cell sites; and
• Promoting a circular economy through a robust device reuse and recycling program.
Responsible Sourcing
We believe our suppliers are a valuable extension of our business and corporate values. Our Supplier Code of Conduct outlines expectations around ethical business practices for our suppliers. We require our suppliers to operate in compliance with the laws, rules, regulations and ethical standards of the countries in which they operate or provide products or services. We expect our suppliers to share our commitment to ethical conduct and environmentally responsible business practices while they conduct business with or on behalf of us. Our Responsible Sourcing Policy further outlines T-Mobile’s expectations in this area.
We employ a third-party risk management (“TPRM”) process to screen for anti-corruption, global sanctions, human rights and environmental risks before engaging with a supplier. Our TPRM process also continuously monitors current suppliers for policy violations and risks.
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Regulation
The FCC regulates many key aspects of our business, including licensing, construction, the operation and use of our network, modifications of our network, control and ownership of our licenses and authorizations, the sale, transfer and acquisition of certain licenses, domestic roaming arrangements and interconnection agreements, pursuant to its authority under the Communications Act of 1934, as amended (“Communications Act”). The FCC has a number of complex requirements that affect our operations and pending proceedings regarding additional or modified requirements that could increase our costs or diminish our revenues. For example, the FCC has rules regarding provision of 911, 988 and E-911 services, porting telephone numbers, interconnection, roaming, internet openness or net neutrality, robocalling/robotexting, disabilities access, privacy and cybersecurity, digital discrimination, consumer protection and the universal service and Lifeline programs. Many of these and other issues are being considered in ongoing proceedings, and we cannot predict whether or how such actions will affect our business, financial condition or operating results. Our ability to provide services and generate revenues could be harmed by adverse regulatory action or changes to existing laws and regulations. In addition, regulation of companies that offer competing services can impact our business indirectly.
Except for operations in certain unlicensed frequency bands, wireless communications services providers generally must be licensed by the FCC to provide communications services at specified spectrum frequencies within specified geographic areas and must comply with the rules and policies governing the use of the spectrum as adopted by the FCC. The FCC issues each license for a fixed period of time, typically 10-15 years depending on the particular licenses. While the FCC has generally renewed licenses given to operating companies like us, the FCC has authority both to revoke a license for cause and to deny a license renewal if a renewal is not in the public interest. Furthermore, we could be subject to fines, forfeitures and other penalties for failure to comply with FCC regulations, even if any such noncompliance was unintentional. In extreme cases, penalties can include revocation of our licenses. The loss of any licenses, or any related fines or forfeitures, could adversely affect our business, results of operations and financial condition. In addition, the FCC retains the right to modify rules related to use of licensed spectrum, which could impact T-Mobile’s ability to provide services.
Additionally, Congress’s and the FCC’s allocation of additional spectrum for broadband commercial mobile radio service (“CMRS”), which includes cellular, PCS and other wireless services, could significantly increase and intensify competition. We cannot assess the impact that any developments that may occur in the U.S. economy or any future spectrum allocations by the FCC may have on license values. FCC spectrum auctions and other market developments may adversely affect the market value of our licenses or our competitive position in the future. A significant decline in the value of our licenses could adversely affect our financial condition and results of operations. In addition, the FCC periodically reviews its policies on how to evaluate carriers’ spectrum holdings in the context of spectrum transactions or acquisitions. Most recently, for example, in September 2023, the FCC sought public comment on whether it should initiate a rulemaking proceeding to consider changes to its mobile spectrum rules and policies. A change in these rules and policies could affect our access to additional spectrum resources and competition among us and other carriers.
Congress and the FCC have imposed limitations on foreign ownership of CMRS licensees. Direct foreign ownership in the licensee of more than 20% is prohibited. Indirect foreign ownership of more than 25% through an entity controlling the licensee must be reviewed and approved by the FCC as not inconsistent with the public interest. Consistent with that established policy, the FCC has issued a declaratory ruling authorizing up to 100% ownership of our Company by DT.
For our Educational Broadband Service (“EBS”) licenses in the 2.5 GHz band, FCC rules previously limited eligibility to hold EBS licenses to accredited educational institutions and certain governmental, religious and nonprofit entities, while permitting those license holders to lease their licenses to commercial providers for non-educational purposes. Therefore, we have historically accessed EBS spectrum primarily through long-term leasing arrangements with EBS license holders. Our EBS spectrum leases typically have an initial term equal to the remaining term of the EBS license, with an option to renew the lease for additional terms, for a total lease term of up to 30 years. In April 2020, the FCC lifted the restriction on who can hold EBS licenses and the 30-year limitation on lease duration, among other changes. The elimination of these restrictions allows current license holders to sell their licenses, including to T-Mobile. While a majority of our leases have contractual provisions enabling us to match offers, we may be forced to compete with others to purchase 2.5 GHz licenses on the secondary market and expend additional capital earlier than we may have anticipated. T-Mobile has started to acquire some of these EBS licenses, but we continue to lease spectrum in this band and expect that to be the case for some time.
While the Communications Act generally preempts state and local governments from regulating the entry of, or the rates charged by, wireless communications services providers, certain state and local governments regulate other terms and conditions of wireless service, including billing, termination of service arrangements and the imposition of early termination fees, advertising, network outages, the use of devices while driving, service mapping, protection of consumer information, zoning and land use. Notwithstanding this federal preemption, several states are considering or have passed laws or regulations
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that could potentially set prices, minimum performance standards and/or restrictions on service discontinuation that could impact our business in those states.
For example, following the FCC’s adoption of the 2017 Restoring Internet Freedom (“RIF”) Order reclassifying broadband internet access services as non-common carrier “information services,” a number of states sought to impose state-specific net neutrality, rate-setting, and privacy requirements on providers’ broadband services. The FCC’s RIF Order expressly preempted such state efforts, which were inconsistent with the FCC’s federal deregulatory approach at that time. In 2019, however, the DC Circuit issued a ruling largely upholding the RIF Order but also vacating the portion of the ruling broadly preempting state/local measures regulating broadband services. The court left open the prospect that particular state laws could still unlawfully conflict with the FCC’s RIF Order and be preempted. In the meantime, the FCC sought to repeal the RIF Order through its adoption of the 2024 Open Internet Order, though the latter was struck down by a federal court of appeals in January 2025.
While most states pursuing net neutrality legislation sought to codify the federal rules repealed by the RIF Order, there are differences in some states. For example, California has passed separate privacy and net neutrality legislation, while many others have passed privacy laws, and New York has passed a broadband rate-setting law. There are also efforts within Congress to pass federal legislation to codify uniform federal privacy and net neutrality requirements. Ensuring the preemption of separate state requirements, including the California laws, is critical to this effort. If not preempted or rescinded, separate state requirements will impose significant business costs and could also result in increased litigation costs and enforcement risks. A number of states also subject wireless service providers to registration requirements. State authority over wireless broadband services will likely remain unsettled unless resolved by the courts, the FCC or Congress.
In addition, the Federal Trade Commission (“FTC”) and other federal agencies have jurisdiction over some consumer protection matters and the elimination and prevention of anticompetitive business practices with respect to the provision of non-common carrier services. Further, the FCC and the Federal Aviation Administration regulate the siting, lighting and construction of transmitter towers and antennae. Tower siting and construction are also subject to state and local zoning, as well as federal statutes regarding environmental and historic preservation. The future costs to comply with all relevant regulations are, to some extent, unknown, and changes to regulations, or the applicability of regulations, could result in higher operating and capital expenses, or reduced revenues in the future.
Available Information
The SEC maintains an internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically at www.sec.gov. Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) are also publicly available free of charge on the investor relations section of our website at investor.t-mobile.com as soon as reasonably practicable after they are electronically filed with or furnished to the SEC. Our corporate governance guidelines, director selection guideline, code of ethics for senior financial officers, code of business conduct, speak up policy, supplier code of conduct, and charters for the audit, compensation, nominating and corporate governance, and executive committees of our Board of Directors are also posted on the investor relations section of our website at investor.t-mobile.com. The information on our website is not part of this or any other report we file with, or furnish to, the SEC.