Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - T-Mobile US, Inc. | d653116d8k.htm |
| EX-99.1 - EX-99.1 - T-Mobile US, Inc. | d653116dex991.htm |
| EX-10.1 - EX-10.1 - T-Mobile US, Inc. | d653116dex101.htm |
| EX-10.2 - EX-10.2 - T-Mobile US, Inc. | d653116dex102.htm |
 T-Mobile
US,
Inc.
A-Block
Spectrum
Transactions
Exhibit 99.2 |
 Disclaimer
2
This presentation contains “forward-looking” statements within the meaning of the U.S.
federal securities laws. For those statements, we claim the protection of the safe harbor for
forward-looking statements contained in the Private Securities Litigation Reform Act of
1995. Any statements made herein that are not statements of historical fact, including statements
about the expected benefits of the spectrum transactions with Verizon and T-Mobile US, Inc.'s
plans, outlook, beliefs, opinions, projections, guidance, strategy, integration of MetroPCS,
expected network modernization and other advancements (including build-out of our network
on A-block spectrum we own or acquire in the future), are forward- looking statements.
Generally, forward-looking statements may be identified by words such as "anticipate," "expect,"
"suggests," "plan," "project," "believe," "intend,"
"estimates," "targets," "views," "may," "will," "forecast," and other similar
expressions. The forward-looking statements speak only as of the date made, are based on current
assumptions and expectations, and involve a number of risks and uncertainties. Important
factors that could affect future results and cause those results to differ materially from
those expressed in the forward-looking statements include, among others, the following: the
satisfaction of the conditions to closing of the spectrum transactions with Verizon and the closing of the
transactions; our ability to compete in the highly competitive U.S. wireless telecommunications
industry; adverse conditions in the U.S. and international economies and markets; significant
capital commitments and the capital expenditures required to effect our business plan,
including the build-out of our network on A-block spectrum we own or acquire in the
future; our ability to adapt to future changes in technology, enhance existing offerings, and introduce new
offerings to address customers' changing demands; our ability to develop effective solutions to
interoperability issues that may impact deployment of our network on the A-block spectrum
we own or acquire in the future; the availability of devices that are compatible with
A-block spectrum we own or acquire in the future; changes in legal and regulatory
requirements, including any change or increase in restrictions on our ability to operate our network;
our ability to successfully maintain and improve our network, and the possibility of incurring
additional costs in doing so; major equipment failures; severe weather conditions or other
force majeure events; and other risks described in our filings with the Securities and Exchange
Commission, including those described in our Quarterly Report on Form 10-Q filed with the
Securities and Exchange Commission on August 8, 2013. You should not place undue reliance on these forward-
looking statements. We do not undertake to update forward-looking statements, whether as a result
of new information, future events or otherwise, except as required by law.
|
 Agenda
Financial Overview
Strategic Overview
Spectrum and Network Overview
Braxton
Carter,
CFO
John
Legere,
President
and
CEO
3
Neville
Ray,
CTO
Q&A |
 Strategic Overview
John Legere
President and CEO
4 |
 Recent Activity
5
Oct 22
Launched Un-carrier 3.0, Part 2: Tablets Unleashed
Nov 5
Reported Strong Q3 Results
Nov 20
Completed the sale of primary shares raising net proceeds of
approximately $1.8 billion
Nov 21
Completed the sale of $2 billion of Senior Notes |
 Highlights of A-Block Transactions
6
700 MHz A-Block spectrum from Verizon for $3.315B in consideration
–
$2.365 billion in cash and the transfer of some AWS and PCS spectrum licenses
valued at approximately $950 million*
Including existing A-Block holdings in Boston, spectrum covers 158 million
people or approximately 50% of the U.S. population in key places such as
New York, Los Angeles, Dallas, Houston, Philadelphia, Atlanta, Washington
D.C., and Detroit. –
9 of the top 10, and 21 of the top 30 markets across the United States
–
Covers 70% of the existing T-Mobile customer base
Positive regulatory and technological developments enhance attractiveness of
transactions Build out can begin immediately after closing on licenses that
cover over half the total population
Transactions result in net gain in spectrum position in a significant number of
major markets Complements
our
already
“best-in-class”
mid-band
spectrum
position
This description summarizes two transactions that have been entered into with Verizon, one pursuant to a License Purchase Agreement and the second pursuant to a License Exchange Agreement.
* |
 Enhancing Our Spectrum Position
7
Completed AWS deal with U.S. Cellular
Announced 700 MHz A-Block spectrum licenses from Verizon Wireless
Excellent opportunities to acquire valuable spectrum in the near
future
(e.g., AWS-3 and 600 MHz auctions) |
 Financial Overview
8
Braxton Carter
CFO |
 Details of Transactions
9
(1) Markets defined as Cellular Market Areas (CMAs)
(2) Markets defined as Basic Trading Areas (BTAs)
Comparable
Spectrum
Note:
$
per
MHz
pop
price
estimates
will
vary
based
on
the
year
of
underlying
population
data
used
in
the
denominator.
Comparable Spectrum Comps –
700 MHz
Highlights
TMUS receives:
700 MHz A Block spectrum in 240 metro
areas covering 150M POPs
8
of
Top
10
markets
(1)
20
of
Top
30
markets
(1)
VZ receives:
$2.365B in cash
AWS spectrum in 19 markets
(1)
covering
34M POPs
PCS
spectrum
in
8
markets
(2)
covering
21M POPs
700 MHZ
Secondary
Market
Transactions
700 MHZ
Auction
(Mar-08)
AT&T 700 MHz Auction
Top 25 B-block licenses
Verizon A-Block
Verizon
B-block
to
AT&T
(LA,
Chicago,
Miami,
etc.)
(Sept-13)
Verizon
A-block
to
Leap
(Chicago)
(Aug-12)
Verizon
B-block
to
Grain
(Carolina
Markets)
(Sept-13)
$1.47
$3.15
$4.50
$1.57
$4.08
$4.29
$1.85
T-Mobile
purchase
of
Verizon
700
MHz
A-block
spectrum
(Jan-14)
•
Secondary markets based on various Wall Street estimates.
•
Auction data based on FCC data provided with the auction results.
•
T-Mobile purchase of Verizon 700 MHz A-block spectrum based on internal
assessment of fair market value |
 Value-Creating Deals for TMUS Shareholders
10
“Best in Class”
mid-band = Speed and Capacity
New low-band = Coverage and Reliability
Subscriber and capital impacts:
–
Increased gross adds
–
Lower Churn
–
Reduction in future capex
Spectrum dispositions will not impair our ability to reach 20+20
MHz 4G LTE in 90% of Top 25 metro areas in 2014 and beyond
|
 Financing Detail
11
Purchase to be funded by cash on hand, supported by our recent
equity and debt deals
Equity
Debt
(1) Based on 3Q13 cash, proforma for recent debt and equity raise
$14.0
$16.4
Current
Post Deal
Net Debt excl. towers ($B)
(1)
2.6x
3.0x
Current
Post Deal
LTM Leverage Ratio
(1)
$6.2
$3.8
Current
Post Deal
Cash ($B)
(1)
–
11/20/13: Completed sale of 72.8M shares at $25.00 per share.
Net proceeds of ~$1.8B
–
11/21/13: Completed sale of $2B in Senior Notes due 2022/2024
|
 Implementation and Next Steps
12
Deals are expected to close in mid-2014
Rapid deployment
2014 capex guidance to be provided with 4Q13 results
Increased optionality around future spectrum transactions
–
Disciplined in evaluation of future A-Block transactions
–
Remain open to future swaps
–
Plan to participate in AWS-3 and 600 MHz auctions
|
 Spectrum and Network Overview
Neville Ray
CTO
13 |
 What are we Buying?
14
A-Block License Areas
T-Mobile’s 700 MHz A-Block holdings would cover 158 million people
(including Boston) and 70% of T-Mobile’s customers.
251 metropolitan areas, including 9 of the top 10 and 21 of the top 30
markets. Legend
New license
Existing |
 Enhanced Spectrum Position
15
Transactions significantly improve T-Mobile’s spectrum depth
Total spectrum in Top 25 Major Metro Areas (in MHz)
(1) MHz totals do not tie out exactly due to rounding
(1)
(1)
45
31
0.4
77
42
30
9
82
AWS
PCS
700MHz
Total
Before
After |
 Importance of Low-Band Spectrum
16
Cell sites overlaid with 700MHz will
benefit from a significantly larger
coverage footprint in suburban and
rural areas
Cost effective coverage extension
outside of dense urban areas
Sub-Urban
and Rural
Coverage
Improved
in-building
penetration
with twice as strong signal indoors
compared to mid-band
Significantly improved in-building
experience
In-Building
Penetration
Complements
Mid-Band
Spectrum
Excellent supplement to strong mid-
band portfolio
Additional capacity and speed in
addition to extended reach in
suburban and rural areas
Mid-band coverage
Low-band coverage
Sub-Urban
Rural
Urban |
 Resolution of A-Block Interference
17
Lower 700 MHz Band
Digital TV Channel 51
Channel 51 service areas cover less than 50% of licensed POPs
Mitigation techniques exists to shrink these zones today
Fully resolved as part of the Broadcast Incentive Auction
E-Block transmissions
Dish agreed to reduce the power levels of transmissions from its
E Block spectrum and FCC approved associated order in October
Resolved with 700MHz interoperability agreement
E
A
B
C
A
B
C
D
Digital TV
698
704
710
734
740
746
716
722
728
Uplink
Downlink
Ch.51 |
 Early Deployment Opportunity
18
A-Block build-out can start in 2014 outside the Ch.51 Service contours
with more than 50% of covered population in such areas
Initial markets where Ch.51 is not present include Washington DC,
Dallas, Philadelphia, Houston, Miami and Minneapolis
T-Mobile has large number of existing sites (~15,000) outside Ch.51
service contours, presenting early deployment opportunity
|
 Handsets and Infrastructure
19
Infrastructure
A-block network infrastructure
has already been developed and
deployed
We have a large base of existing
sites to facilitate rapid
deployment
We have a strong record of
deploying new bands and
technologies rapidly
Handsets
First devices compatible with A-
block already exist today
Device development required to
support T-Mobile network is
relatively small
Initial devices supporting A-
block and T-Mobile network as
early as 4Q2014 |
 Recap Highlights
John Legere
President and CEO
20 |
 Recap Highlights
21
700 MHz A-Block spectrum from Verizon for $3.315B
–
$2.365 billion in cash and the transfer of some AWS and PCS spectrum licenses
valued at approximately $950 million*
Including existing A-Block holdings in Boston, spectrum covers 158 million
people or approximately 50% of the U.S. population in key places such as
New York, Los Angeles, Dallas, Houston, Philadelphia, Atlanta, Washington
D.C., and Detroit. –
9 of the top 10, and 21 of the top 30 markets across the United States
–
Covers 70% of the existing T-Mobile customer base
Positive regulatory and technological developments enhance attractiveness of
transactions
Build out can begin immediately after closing on licenses that cover over half the
total population
Transactions result in net gain in spectrum position in a significant number of
major markets
Complements
our
already
“best-in-class”
mid-band
spectrum
position
*
This description summarizes two transactions that have been entered into with Verizon, one
pursuant to a License Purchase Agreement and the second pursuant to a License Exchange Agreement. |
 22
Q&A |
 23
Appendix |
 A-Block: 21 of the Top 30 Cellular Market Areas
24 |
 AWS/PCS License Exchange Markets
25
Note: License exchange markets ranked by Cellular Market Areas (CMAs)
AWS markets defined by Cellular Market Areas (CMAs)
PCS markets defined as Basic Trading Areas (BTAs)
The spectrum blocks being exchanged by the two companies for realignment purposes
net to zero. CMA
BTA
TO T-MOBILE:
CMA
BTA
Covered
Covered
AWS
PCS
700
Total
AWS
PCS
700
AWS
PCS
700
Total
AWS
PCS
700
Total
Market
Market
Market Name
POPs (MM)
POPs (MM)
(MHz)
(MHz)
(MHz)
(MHz)
(MHz)
(MHz)
(MHz)
(MHz)
(MHz)
(MHz)
(MHz)
(MHz)
(MHz)
(MHz)
(MHz)
2
Los Angeles, CA
17.2
50
30
0
80
10
12
40
30
12
82
(10)
0
12
2
7
404
San Francisco-Oakland, CA
4.4
7.7
50
50
0
100
10
10
12
40
40
12
92
(10)
(10)
12
(8)
9
Dallas-Forth Worth, TX
6.6
60
40
0
100
10
12
50
40
12
102
(10)
0
12
2
24
Atlanta, GA
5.7
48
50
0
98
10
12
48
40
12
100
0
(10)
12
2
112
Detroit, MI
4.9
50
40
0
90
10
12
50
30
12
92
0
(10)
12
2
35
Sacramento, CA
2.0
50
45
0
95
10
12
40
45
12
97
(10)
0
12
2
107
434
Stockton, CA
0.7
0.7
50
50
0
100
10
10
12
40
40
12
92
(10)
(10)
12
(8)
53
Syracuse, NY
0.6
50
20
0
70
10
40
20
0
60
(10)
0
0
(10)
107
Daytona Beach, FL
0.6
47
48
0
95
10
12
47
38
12
97
0
(10)
12
2
111
Vallejo-Fairfield-Napa, CA
0.5
50
50
0
100
10
10
12
40
40
12
92
(10)
(10)
12
(8)
289
Melbourne, FL
0.5
50
50
0
100
10
12
50
40
12
102
0
(10)
12
2
124
Santa Barbara-Santa Maria-Lompoc, CA
0.4
60
20
0
80
10
12
50
20
12
82
(10)
0
12
2
160
Gainesville, GA
0.3
50
60
0
110
10
12
50
50
12
112
0
(10)
12
2
340
California 5 - San Luis Obispo
0.3
60
15
0
75
10
12
50
15
12
77
(10)
0
12
2
22
Athens, GA
0.3
40
50
0
90
10
12
40
40
12
92
0
(10)
12
2
215
Chico, CA
0.2
50
45
0
95
10
12
40
45
12
97
(10)
0
12
2
336
California 1 - Del Norte
0.2
50
34
0
84
10
12
40
34
12
86
(10)
0
12
2
270
Bellingham, WA
0.2
70
40
0
110
20
50
40
0
90
(20)
0
0
(20)
254
Redding, CA
0.2
50
45
0
95
10
40
45
0
85
(10)
0
0
(10)
346
California 11 - El Dorado
0.2
50
45
0
95
10
12
40
45
12
97
(10)
0
12
2
274
Yuba City, CA
0.2
50
45
0
95
10
12
40
45
12
97
(10)
0
12
2
344
California 9 - Mendocino
0.2
50
40
0
90
10
12
40
40
12
92
(10)
0
12
2
343
California 8 - Tehama
0.1
50
45
0
95
10
40
45
0
85
(10)
0
0
(10)
345
California 10 - Sierra
0.1
50
45
0
95
10
12
40
45
12
97
(10)
0
12
2
337
California 2 - Modoc
0.1
50
34
0
84
10
40
34
0
74
(10)
0
0
(10)
34.2
20.8
BEFORE TRANSACTION
TRANSACTION
AFTER TRANSACTION
CHANGE
TMUS Spectrum Ownership in
AWS/PCS/700 MHz Bands
TO VERIZON:
TMUS Spectrum Ownership in
AWS/PCS/700 MHz Bands
TMUS Spectrum Ownership in
AWS/PCS/700 MHz Bands |