Good afternoon, everybody. I'm Sebastiano Petty, and I cover the telecom, cable, and satellite space at JPMorgan. I want to welcome T-Mobile CFO Peter Osvaldik. Peter, thanks for being with us today.
Thanks for having us. It's always fun.
Of course. I think, do you have a safe harbor?
I think they were going to put it up, but to the extent that they—oh, there it is. You know, everybody, please look. We'll be making forward-looking statements and referencing non-GAAP metrics, so refer you to our filings for all the associated disclosures.
Awesome. All right. Peter, last fall, T-Mobile outlined an aggressive multi-year business plan to transform T-Mobile from challenger to champion in the wireless ecosystem, underpinned by continued postpaid share gains. Can you take a step back and help us think about T-Mobile's relative position in the industry, confidence in the growth levers from here, and where you see the greatest opportunities in the medium term?
Yeah, absolutely. Thanks. You know, if I take a step back and just think about the industry, it really is a backdrop of a growing industry. You know, whether you're looking at service revenues or profitability, you know, fun fact, from 2022- 2024, this industry grew free cash flows by 50% while also delivering more for consumers. Of course, within that whole time frame, T-Mobile has consistently out-executed and out-delivered, from a customer growth perspective, service revenue, free cash flow generation. Really, the fundamental reason for that is thoughtful, durable advantages that we've built over time, broadly categorized, you know, in our minds, around three kind of segments. One is best network, the best value, and the best customer experiences.
When you take those three elements that kind of never before have been brought together in the telco space, and you couple it with, as we've discussed before, kind of broad under-penetrated market segments that have been a tailwind for growth but continue to have significant growth vectors in front of us for years to come, that's really what continues us and having the ability to outsize returns and delivery. It's, you know, it's a fabulous place to be, both within the industry but exactly where T-Mobile's built itself up to be. In the midst of all of that, not only share-taking and revenue growth opportunities, but as we think about customer experience and value, we're going through a digitalization and a revolution in there that'll allow us to take customer experience to the next level again.
You know, across all of these areas, we're tremendously excited about the future.
That's great. Yeah, we'll touch on a lot of those topics here. Starting, as you touched on, with the postpaid ecosystem and subscriber growth, a lot of focus coming out of the first quarter on churn and gross ad activity. You know, T-Mobile posted, you know, record 1Q gross ads in the quarter. How would you describe the second quarter, you know, competitive environment in Swisher Pool, you know, quarter to date? Any update on how you're thinking about the 2025 postpaid subscriber expectations relative to what you outlined a couple of weeks ago?
Yeah, no, we continue to be very confident in what really is, at this point in time, our highest-ever total postpaid guide, as well as our highest-ever postpaid phone guide. When you think about, you know, Q2 to date or Q1 and competitiveness, it really feels very similar to what we saw in Q4 or all of 2024. Remember, this is T-Mobile as the net share-taker in the industry. Not only did we create and bring competition way back over a decade ago, but we continue to thrive in competitive environments because it creates consumer consideration and switching. That is when they go around, they ask their friends, they do research, and this unprecedented, remember, combo of the best value, best network, and experience is why we win the switcher decision. To me, Q2 to date looks exactly like Q1 and 2024.
Remember, the best growth year in T-Mobile's history and all of that vaulted history was 2024. To your point, in Q1, we demonstrated yet again not only our highest-ever postpaid gross and net additions, but also delivered, once again, outsized financial returns. When you think about service revenue, it was three times the next closest peer. On EBITDA, it was double the peer group average. We continue to maintain a completely differentiated proposition in terms of ability to translate service revenue into free cash flow, which is really the all-important value creation metric. You know, Q2 to me, going exactly as planned. I know there's been questions around gross ads. You know, from an April perspective, gross ads were up year over year.
From a May perspective, May to date, gross adds are up year over year, in fact, a little bit more than they were even in April. Everything is, that's really what underpins our ability to continue to have confidence in our highest-ever guide. Again, it goes back to the differentiated and durable advantages we've created and the under-penetrated market segments.
Thanks. That's very helpful. As we look at the year-over-year pickup in churn, though, in the first quarter, have you been able to disaggregate maybe the impact from, you know, what was idiosyncratic in terms of the price up relative to maybe industry dynamics? Any way to, you know, break out or discern?
Yeah, for sure. What we saw and we continue to see now is that the vast majority of the churn increase, which, by the way, was still the lowest churn increase in Q1 on a year-over-year basis, was attributable to the rate plan optimizations that we did. Remember, that was notifications happened in March. The actual bill changes happened in April and May and impact a larger percentage of the base than in the past. Much like we said, nothing really has changed since our earnings call in that we anticipate this will continue into Q2 as part of the value creation, but then will subside.
Okay. As we look at the prepaid to postpaid migrations in the quarter, pretty relatively low relative to the last couple of years here. Any impact, or is it indicative from population immigration growth, you know, competitive issues?
Yeah, no, I think you probably saw some temporary artifacts in Q1 and why the number was a little bit lower. By the end of the quarter, it was going back to normal. I think Q2, you'll see, again, very healthy movement from prepaid to postpaid. For us, that primarily comes from customers that have entered into the prepaid space, are tenured, and are then looking to move up the brand and the value proposition. It is a really healthy way to grow the brand and grow postpaid, as well as grow the relationship with customers.
Got it. Last month, shifting to the five-year price lock, last month you revamped your T-Mobile brand offers. You introduced the Experience More, Experience More Beyond, which now include a five-year price lock on talk, text, and data. I guess, number one, what pain points is the company trying to address with these new offers? How do you measure the relative success of these new offers, whether it be churn, gross adds?
Yeah, you're going to see it across a number of factors. I mean, when you really think about what we do with rate plans and the value that we pack into them, it kind of goes to this central pillar of the three that I talked about, which is customer value leadership and continuing to innovate on customer value leadership. What you saw us do is, number one, make it more comparative, particularly as we see more digitalization, and do an apples-to-apples comparison for consumers so that they can see the amount of savings they can achieve on a monthly basis with the rate plan. That was part of it. You saw us on the better plan actually reduce pricing by $5 a line. You saw, particularly in our very highest top-tier plan, including value elements that are hard for others to copy.
In this case, one of the things that we incorporated in the very top-tier plan is T-Satellite. You know, that's a very unique offering. I'm sure we'll get into that a little bit later and the obfuscation that's happening out there versus the reality of what this offering is. Our job is to continue to pack unique value elements into the rate plan structure, continue to innovate there, and continue to make them things that are harder to copy.
Got it. You touched on in the open about your, you know, three growth segments, right? Top 100, SMRA, as well as enterprise. How much runway do you have left in each of those? Can you maybe zoom out a bit?
Yeah. And if you, you know, if you go back a little bit in history at our first capital markets day post-merger, we outlined a lot of these. We talked about smaller markets in rural areas, which for us is everything beyond the top 100, so 40% of the U.S. population. We talked about particularly enterprise and government as being an opportunity area for growth, of course, fixed wireless. And we continued to grow in all those areas. What you saw uniquely introduced incremental to all those at our last capital markets day was this concept of growth in top 100.
Yeah.
When you look at top 100, we kind of disaggregated into three cohorts: the first, where we're market share leaders, all the way down to the third, which actually looks a lot like smaller markets in rural areas for us. What we have been delivering, and we delivered yet again in Q1, is year-over-year growth against all of those categories, whether it's in the top 100, in the first, second, or third cohorts, smaller markets, rural areas, you know, enterprise, which had its best-ever quarter, government, which continues particularly there to see the benefits that the network capability leadership brings, like T-Priority, for example, and for first responders and the announcement with New York there, and of course, fixed wireless growth that's happened. One reason that top 100 and the cohort where we've already led continues to grow is the best network proposition.
You know, as we've made the leap from 4G- 5G and have become the network leaders, we've seen a whole category of customers that we, you know, call network seekers. Basically, the category of customers that look for network performance above all else. They're willing to pay premiums to get the best network, and that's driving growth. Even in markets where we had the leading market share, we see more growth as a result of that.
All right. Thinking about the rural opportunity, you know, the U.S. Cellular acquisition, you know, is still pending. Does that augment your small markets rural opportunity? I guess maybe relatedly, where are you in terms of distribution there, and how important is that in the small markets rural area to your longer-term efforts?
Yeah. Just to remind everybody, in terms of the U.S. Cellular or all of the pending acquisitions, when we laid out our ambitious multi-year plans, what we did was include the capital outlay, but we did not include any of the benefits, meaning for U.S. Cellular, you know, when the transaction closes, we are very excited about that, and that will be upside to the multi-year plan, but included again in the capital envelope. It will help and benefit certain areas of smaller markets and rural areas. With that also comes some incremental spectrum that we are very excited to put to work. We are famously known for being able to rapidly deploy spectrum for the benefit of customers, including U.S. Cellular customers. It will definitely have a benefit in certain geographies of the country from a smaller markets and rural areas perspective.
In terms of distribution, you know, really what we're guided by is the customer, meaning as we continue to build the network in smaller markets and rural areas. Remember, this is a year where we've pivoted to now thousands of new macro sites will be built, including in smaller markets and rural areas. We tend to bring the distribution at the point at which the network is at parity or better, and that starts the growth cycle. That distribution, particularly in a digital age, can come in the form of physical, national retail partnerships, or more and more so digital outlets as well, particularly in smaller markets and rural areas. It will continually be guided by how the customer wants to be served. That's the focus point.
I guess relatedly to that, you unveiled the T-Life app at your capital markets day. You highlighted on the call, I think, that the number of postpaid phone upgrades completed digitally had doubled quarter over quarter, well over 50% of gross adds at the end of the quarter. Just remind us, I guess, remind us what the T-Mobile Life, or taking a step back, T-Mobile's digital roadmap overall, including T-Life and how you plan to unlock value there and scale that.
Yeah. It is one of the things we're very excited about. From a digital journey perspective, I'd broadly categorize it in a few things. One is, how do you make the customer experience better, more simple, yet more personalized? How do you predict and prevent problems? Of course, how do you run your business more efficiently, including how do you actually more effectively deploy capital? We can get into that with something unique called customer-driven coverage on our behalf. The T-Life element of that was meant to really address the first couple. We knew the first thing you had to do is, of course, create a fabulous digital property and get it in the hands of your customers. It started from nothing a couple of years ago, and we ended the year with over 50 million downloads on T-Life.
The journey from there was going to be, let's start with upgrades, simplify, digitalize, personalize the experience, then add aligns, and then new prospects, all powered, of course, with the ability to utilize data and be AI-enabled in a way that you couldn't have been a couple of years ago. Upgrades was the first journey. For those that are T-Mobile customers that have lived through upgrade experiences years ago, next time you upgrade, I definitely suggest you try this slick new experience. It's really, really great. Makes it much more smooth, and it allows the ability, as we deploy more and more features, to personalize it. The view, and this is the difference, is a lot of companies approach digitalization, AI, automation with, how do I take costs out of the system? You know, how do I deflect more calls?
I don't want to deal with customers. I want the AI to deal with customers. For us, much like the ethos of this company has always been, how do you put customer centricity at the forefront, make their experiences better? When you do that, of course, costs will naturally come out of the system. You know, if you envision a future world, some of which underpinned the capital markets day multi-year guide, where you have much more digitalization of transactions, that means you have a different retail footprint and, you know, like a global care footprint, those kinds of things, which benefit costs, but that's a secondary consideration for us.
Got it. Now shifting gears to broadband, T-Mobile introduced new 5G broadband pricing and packaging in late 2024. That has not only broadened the aperture, the TAM, to more price-sensitive subscribers, but also resulted in, I think you highlighted, lowest-ever churn, record broadband RPU growth each of the last couple of quarters. In one Q24, you once again led the industry in broadband net adds. Are you continuing to see tailwinds from the pricing and packaging changes and maybe help us think about volume expectations from here in FWA?
Absolutely. I mean, there's a number of things that continue to drive the success of that business. You're right, it's been years now, not just quarters, but years now where we've been over 400,000 net adds a quarter. We've continued to lead the industry. We had our lowest-ever churn quarter and our highest Q1 from an RPU growth perspective. Part of that was definitely kind of mirroring the philosophy we have in the wireless space, kind of a, you know, a good, better, best philosophy from a rate plan perspective. One, with an entry-level rate plan, you can drive interest and traffic in. Then typically when consumers see the incremental value from higher-tier rate plans, they self-select up. That is just like it's driving it in the mobile phone space, it's driving it in the broadband space as well and helping to grow RPU.
That said, from a volume perspective, you know, we're very comfortable with everything underpinning our guide to get to 12 million subscribers by the end of 2028. You know, the product is performing and resonating really well. When you think about things that are important to customers around this product space is, you know, am I getting the speed and reliability that's necessary for me? Our product, if you just look at Q4 to Q4, third-party reports recently released, speeds have increased by 50%. Q4 versus Q4. In a year, we've increased speeds by 50%. We continue to win customer satisfaction recognition from multiple, multiple third parties. It's a product that's resonating, it's durable, and that's what's continuing to drive the growth and the lower churn and the higher RPU.
Great. On the T-Fiber side, Lumos JV just closed. You have, you know, Metronet's pending, but the Lumos JV has ambitious build targets. I guess how quickly can the team scale that build and what gives you confidence, you know, in hitting your target of three and a half million passings by 2028?
Yeah. I mean, part of the reason we chose Metronet and Lumos was, yes, pure play fiber and a way to disrupt, much like T-Mobile has disrupted wireless over the decades. That's the plan in fiber as well. We chose it with partners that have demonstrated ability to build and scale. You know, we released Metronet during capital markets day. We said their peak year or month of build, sorry, was about 70,000 a month. That was in summer, of course. You know, that's your peak month. Lumos equally has started to scale significantly. These are management teams that can scale the build. We've got great capital sources for them as part of the JV. We've got great partners, both in the management teams but the PE firms.
We're very confident in the ability for, you know, Lumos to reach 3.5 million by 2028. And then Metronet, once it closes, to continue their build and scale further and reach 6.5 million households passed by 2030.
Do you still have limited appetite for fiber M&A at this point, or is it more about just integration and, you know, scaling?
The philosophy has not changed there. I mean, we will continue to look at, are there value accretive fiber opportunities, probably more in the pure play fiber space. We have kind of shown our cards there with Lumos and Metronet. That is our preference because that is our ethos. That is what we know how to do. You know, there is probably limited numbers of targets in that space that are available. We will continue to look at them. It would have to be much like the first two, the right partners at the right value creation opportunity for us. You know, you would expect us to continue looking. Nothing to announce here, but to the extent something meets all that criteria, we would be interested.
Yeah. I think at a conference earlier this year, you mentioned that you don't necessarily need a quote unquote big deal to compete. You know, we do still constantly kind of get that question. I guess how do you update us? I guess how you and the team are looking at convergence in the U.S.? Obviously AT&T was here this morning and, you know, lots of focus on broadband and fiber builds, and scaling their locations past. You know, I guess help us think about that.
Yeah. I mean, our view on convergence really hasn't changed. It's been very consistent. Nothing we've seen would change that view. That is that really the U.S. is already a converged play. I think a lot of times investors ask what's happening with convergence, informed a little bit by, you know, what's happened in Europe and hasn't Europe converged? Actually, if you look at the biggest markets in Europe, the U.K. and Germany, it's a significant minority of customers that are converged. You know, I think it's somewhere in the 25% range. The reason behind that is there's no real functional utility increase for the customer from a wireline, wireless bundle. What it does is a discount. In the U.S., one thing you've seen is over five years now, over 85% of the customers have had the ability to buy wireline and wireless from the same provider.
To the extent that convergence has happened in the U.S., it's been in the run rate for five years. The reason is, you know, in the U.S., we have other ways. Bundling is a way to drive churn down. Bundling is a way to drive discounts as a result. You know, you think about family plans in the U.S. There's a reason that the second, third, fourth, fifth line is a lot cheaper than the first one. That is, you bundle things together, you get reduced churn and you get higher value on the account basis. Similarly, when you bundle an iPad or a watch together with your mobile phone.
Really what we're seeing and continue to see is customers, you know, when you look at, again, third-party analyst reports, not just us crowing about it, that look at what is a consideration for switching, whether it's in the wireline space or the wireless space, and what are the factors that would drive customers to switch? You kind of see the chart go like this. When you get to, well, I want a wireline and a wireless bundle, you're like down in the low single digits, right? Because what's important, particularly for mobility customers, is network quality, reliability, price, value, all the things that, you know, make up those three pillars for us more so than bundling. All that said, and the reason we're investing in fiber JVs is fiber in and of itself, in our mind, can be a really good accretive value creation.
The reason for that is, of course, we bring unique attributes like the brand, the distribution, customer relationships that would allow you to get either faster penetration, deeper penetration, or lower subscriber acquisition costs than a purely disinterested financial investor could do. That is how we get to, you know, great returns in that space. It is not a thesis of, well, convergence is coming and you have to worry about it. It has been here for five years.
Got it. Now shifting gears to financials. You raised guidance most recently in late April. Help us maybe think about the guidance increase in terms of what portion of the service revenue and ARPA upside was driven by just organic relative to maybe some of the acquisitions you closed. Help us maybe help us.
Yeah. Yeah. So yeah, that was a fun day to increase service revenue, even more so than we said in the past, up to about 6% year over year increase. When I dissect that, M&A, which really would be at this point, Vistar and Bliss primarily, is about half of that increase. So, you know, about half a percentage. We went from five to roughly six. The other half is all organic. Switching to ARPA, Vistar and Bliss are actually not included in ARPA. The ARPA 3.5% increase is really just all organic fundamentally. So it, you know, really speaks to the power of what's happening there, both from a deepening of relationships as well as a self-selection up the rate card across all of our products.
I guess similarly on the core EBITDA side, some of the, you know, feedback we've been getting, you know, centers around, you know, the upside to revenue, but maybe not that much flow through down to EBITDA. Maybe once again, kind of helping us think about the inorganic or organic pieces around EBITDA guidance and what, if any, conservatism is kind of baked in given, you know, some of the macro industry.
Yeah. The only inorganic portion of the EBITDA raise was Vistar and Bliss, and that was about $75 million of EBITDA that we flowed through. Then there was an incremental amount that was organically driven. You know, it's one of those funny things where only T-Mobile could be called an investment year while still delivering outsized EBITDA and over 5% growth at the midpoint. It fundamentally runs down to a few things. One, remember, we are funding the highest ever customer net additions guidance in our history at this point of the year. We're also investing prudently in value creation to drive those ambitious multi-year outcomes, inclusive of thousands of new macro sites on the network, as well as digitalization. You know, all of those things we talked about around upgrades, new prospects, add-on lines, that's all in the funding envelope.
You know, we had really good line of sight to service revenue because of the ARPA increases. We gave you line of sight to that. You know, sometimes we do not flow all the way through to EBITDA until later, and we have line of sight to that.
Okay. Maybe help us think about, you know, the macro environment and, you know, obviously changes very much day to day. Just thinking about that and then overall consumer sentiment, does it inform or change how you view, you know, taking additional rate or optimization opportunities from here? How are you thinking about that?
Yeah. I mean, you know, this isn't the industry that is going to be the canary in the coal mine on the macroeconomic front. We've proven that through the pandemic. You continue to grow. That is because of the critical nature of communications. You know, communications has moved up priority of wallet for consumers dramatically so. We aren't seeing anything that would indicate to me, at least in this category, I have something to be concerned about yet. Our uptake on the highest tier rate plans, our most premium plans, continues to be over 60% of new accounts activating on those. You know, our bad debt levels, second quarter in a row, were the lowest in the industry. I'm not really seeing anything from a payment pattern perspective that would concern me.
You know, for us, it continues to be the same impetus for what allowed us to increase ARPA. You know, to the extent something changes in that space and people become even more conscientious of value than they are today, and that drives even more switching consideration, fabulous place to be when you have the best network and the best value combination.
Got it. As you think about the 60% take rates of your premium plans, is that just kind of what you touched, that driven by what you touched on earlier, just increasing value proposition within your offers? What's the silver bullet there?
Yeah. I mean, that's really it. You've seen us do this time and time again, introduce new rate plans, again, pack unique and valuable features, particularly into the top tier plan and let customers self-select up that rate plan. That allows us to drive that 60% penetration rate. What's also equally exciting is when you think about the base, the base is just over 30%. That drives a lot of upward momentum ability for, you know, long-term ARPA expansion. That was underpinned in our capital markets day guide as well. We anticipate continued ARPA growth year after year.
I guess closing the loop on, you know, financials and ARPA before we pivot to the end of the conversation here. The question we got, you know, coming out of results was, you know, very strong ARPA results in the first quarter, but postpaid phone ARPU was a little bit light in Q1 relative to your full year guide of 1.5%. Does that suggest anything about the freeline contribution in the quarter? We should be thinking about it?
No. I mean, our 1.2% year over year ARPU growth in Q1 was actually higher than the full year 2024 versus 2023. You saw us actually increase that guide because of the strength of adoption as well as rate plan optimizations to 1.5%. You know, the question of freelines, it's interesting. From time to time, we very strategically, and in this case, very much coupled with rate plan optimizations and very tenured accounts, may pulse in some smart loyalty offers. To the extent that, you know, when I think about Q1, it's a completely immaterial amount of gross adds. To the point you just made, the fact that you couple that with ARPU and ARPA increases just demonstrates the actual quality of the base.
That is how we can continue to deliver outsized service revenue and outsized free cash flow conversion.
Got it. On the four Q call, you talked about, in terms of shifting to capital allocation, a steadier cadence of share repurchases in 2025. Is that still the expectation? Just, you know, again, given the macro competitive environments as well as current deal pipeline, is there any risk to that or is that still the right kind of level?
Yeah. No, you know, there's two things. When you think about the capital allocation philosophy, what we laid out at Capital Markets Day is this business and the free cash flow generation is going to create an $80 billion envelope from Capital Markets Day through the end of 2027. We initially allocated it in three tranches. One is to fund, you know, announced M&A, so about $10 billion there. Outflows, yes, but actual the benefits not included in the EBITDA service revenue guide that we gave. The other thing was up to $50 billion in terms of total shareholder returns. That's inclusive of dividends and share buybacks. We had that $20 billion strategic envelope within the context of our two and a half leverage, which we continue to think is the right leverage.
You know, the comments around how shaping would be in share buybacks was in 2024. You saw some starts and stops, and you know, we approached it a little bit differently for 2025. Certainly one of the things we always look at is, are there other value creative opportunities, right? That's the capital allocation philosophy we've always followed. I'm not here to kind of comment on day-to-day share buyback activity. Of course, one of the things we look at is what is our assessment of intrinsic value of the company in terms of are we going to deploy share buybacks? Yes, we are in the market.
Okay. On the M&A front, we talked about Vistar and Bliss that was closed earlier this year. I think just last week you announced a partnership with IPG Media Brands as well. Can you maybe level set where you are today in terms of your advertising capabilities, how the recent deals amplify what you're doing and, you know, if you're strategically complete in that area?
Yeah. You know, one of the, this is one of those areas where we talked about at Capital Markets Day of how do you take unique assets that you have that allow you to play in smart adjacencies and create disproportionate returns. Advertising is certainly one of those. Look, we are one of the largest advertisers in the U.S. to begin with. We acutely understand the ecosystem from an advertiser perspective, yet we also have a $1 billion-plus advertising business already. That is inclusive of a number of things, including our own retail media network and stores. The impetus behind Bliss and Vistar were really two things. One is certainly with Bliss, there are internal cost savings that we can generate there, but can we create even a better platform, enhanced targeting capabilities, enhanced measurement capabilities on a Bliss type of platform?
All of this though starts with we want to make the consumer experience better. You know, ads chasing you around the internet that don't feel relevant. How can we as T-Mobile in the right way, with customer centricity and privacy in mind, enable advertisers to, one, be more efficient, but also more effective? When you think about Vistar as an out of home and digital out of home, how do you take the ability in our customer relationships and actually create, again, done with centricity and privacy in mind, better targeting, better measurement, and more effectiveness and even out of home? That was the case for Vistar. We're very excited about that. I think there's a lot of runway of growth there. Nothing else, you know, from an M&A perspective we're looking at now. Could something come in the future? Perhaps.
It would, again, have to follow the same value or creative methodology.
Is there any appetite to maybe invest in other adjacencies above and beyond advertising in the medium term?
Yeah, perhaps. Again, it does really focus on how can you take those assets that I keep speaking about, distribution, the brand, and can you convince yourself smartly that there are really adjacent businesses that you can disproportionately create value? Those would be ones you would look at. Remember, that's part of why we created a $20 billion capital envelope to begin with, spectrum purchases should they come up, this kind of type of potential investment. We do not have anything we are looking at, you know, to announce immediately, but it is something we are going to be thoughtful about.
Okay. As we wrap up here, on the one Q call, you touched on it earlier, you announced T-Satellite, pricing of $10 per month, except for the Experience More Beyond and Go 5G Next plans, which get it for free. How do we measure success of T-Satellite? You know, is this just helping, you know, a driver of migration to higher plans? Is it a brand halo thing? How are you thinking about that?
Yeah, it's going to be a number of fronts. I mean, first, it's really important to understand how distinct and differentiated T-Satellite is. I mean, this is an offering that, it's not the perfect analogy, but think about it as, you know, towers in space. And do you want to go after it with one or 10, or do you want to have 550 and growing, right? I mean, it's the same philosophy of capacity and ability. So it's a very differentiated offering. You'll see more education around that because there's a little bit of obfuscation there. It's going to drive a few things. One, on that best network pillar, this is a great way to extend, you know, connectivity.
Remember, we broadly think about connectivity as certainly the terrestrial network where we're heavily advantaged, but also Wi-Fi and planes, you know, the unique things that we offer from an international travel perspective. This is a great way to augment and has been live in beta form. We've seen over a million text messages. We've seen it save lives. I mean, there is definite benefit to consumers on this as an extension of a terrestrial network. This is a seamless connectivity play. You know, it works with the majority of modern devices. It will not only drive perception around the network and connectivity in whole, it's paired in our very premium rate plans. It drives upsell into those rate plans. It continues to be, you know, a customer value proposition that others can't emulate.
Peter, I think it's a great place to leave it. Thank you for joining us today.
Thank you for having us. Always fun. Appreciate it, everybody.