Get started again. I'm John Hodulik, Telecom and Media Analyst here at UBS. I'm very pleased to announce our next speaker is Srini Gopalan , the CEO of T-Mobile. Srini , thanks for being here.
Thanks for having me, John.
As we always do, well, first of all, we've got 35 minutes for presentation or Q&A. I have the iPad here. If anybody in the crowd has any questions, please log them in, and I'll filter them into the conversation. Srini , we always start by giving a little bit of an outlook for 2026. You've been in this seat a relatively short amount of time. But we'd love to get your impressions about the company and what your priorities are as we look out into the new year.
Thank you, John. Let me start by first drawing everyone's attention to the Safe Harbor statement. I think that just disappeared a minute ago. But having cleared that bit out, look, I'm hugely excited to be here. I've been associated with this company now for almost a decade, been on the board, and now part of management, and then took over as CEO. I've got to say, look, this, this when you look at the history of everything we've built as the Un-carrier, and to be sitting here today and to be able to say, "I'm convinced that the best lies ahead," is a testament to what the team's built and is a testament to the strategic position we've put ourselves in.
When I look at, I mean, the baseline for everything we talk about was the strategic plan and the financial plan that we laid out as part of our Capital Markets Day from 2023 to 2027. That was not just a set of numbers. It was a set of capabilities that we wanted to build, which we thought was fundamental to changing, again, the way this industry works. I'm pleased to say we're well on track to not just meet those but exceed some of our goals from that. For my 2026 priorities, there are kind of probably three big capabilities that I'm spending my time focused on. The first is, and you won't be surprised to hear this, our network, right? That has two pieces to it. One, not just maintaining but extending our network lead. We are today America's best network.
We brought 5G to the U.S. We're very, very focused on extending that lead now, with all of the developments that are happening, but also into 6G, right? And I know we'll talk a little bit more in detail on what 6G and AI- RAN is, but there's a piece of kind of just we won't stop. We'll continue extending our network lead. And the second part on network, and this is as important as the reality of the network we built, is making sure that we close the perception gap. We are America's best network. Not everyone sees it as that, right? There's at least 70 million Verizon and AT&T customers who chose Verizon and AT&T because they thought they had the best network. That was true way back in the 4G era. That's changed now.
And these customers are paying a premium because they thought they were at the best network. That's no longer true. Huge opportunity there. Lots of underrepresented segments, whether that's enterprise, whether that's government, whether that's just simply network seekers who have historically not considered T-Mobile. But as we talked in our earnings call, our perception among our network perception among network seekers is now at an all-time high. And that's driving some real momentum into the business. And our latest move, Easy to Switch, or 15 Minutes to Better, is part of kind of taking away that inertia among network seekers and bringing them to us. The second big piece, so that's network, both perception and reality. The second big piece I'm focused on is our AI and digital transformation. Again, you've seen some of the. I mean, this industry in many ways operates like it's in 2002, right?
For most things, whether you're an existing customer or a new customer, you've got to go into store, you've got to call someone. We fundamentally believe that has to change, and we are changing that. Over 90 million downloads of the T-Life app. 70% of our upgrades are now done through digital channels. AI is a space we're hugely excited in, more from the perspective of how can we make the experience even better. You saw our launch of 15 Minutes to Better, which really uses some of the best tech to start smashing one of the biggest pain points customers have, which is the process of switching. I'm sure a few of you have been through the process of kind of trying to drag your 17- and 20-year-old into a store to try and switch network providers, spending most of Saturday there. That's what we want to change.
We want to put an end to that, and you know, on the digital transformation, huge distance covered on our base. And now we're going after prospects and new customers. T he third big leg of what we're doing is broadband growth. We're now the fastest we've been for the last 15 quarters, the fastest growing broadband service, a combination of FWA, where we've doubled in the last two years, and our fiber. I mean, we like broadband because what you've got as an industry, T-Mobile loves to attack, where you've got incumbents sitting on poor products with an inflated backbook price. It's what the Un-carrier is all about. T hose are really my three big priorities: network, both reality and perception, digital transformation enabled by AI, and driving our broadband business.
I mean, you put that all together, it's really about taking the Un-carrier to the next level. This morning, in fact, and we're beginning to align the organization around that. We've made good progress. This morning, in fact, we had an 8-K where both Jon Freier and Mike Katz have moved into broader roles which are aligned to this strategy. They've had some kind of tweaks on their titles. But importantly, it's about aligning the organization behind the strategy.
Got it. Makes sense. All right. That was a great overview. Maybe we'll eventually get to a lot of those topics. Maybe let's start with the subgrowth. You know, you sort of increased expectations for subgrowth through 2025. You've actually done better than expected, certainly than we expected to date. What drove that initial outlook and what's the sustained performance that you've seen thus far?
Sure. T here's two pieces to think about in sub growth, right? I'll come to the piece on how we think about guidance, how we think about our philosophy to approach that. But first, and this is kind of the 50,000-foot view that I think is really important, which is there's a flow of demand towards us, especially from new customers but also existing customers upgrading. And there's a real driver to that flow, which is our differentiation. You know, historically, we were best value, right? Now, and best service. Now we're best value. We've maintained that as well as best network and the best digital experience. You put that all together, and it's the one place customers don't have to make a trade-off. Now, there's a rule in telco, and I've worked across the world in telco, right?
There's this golden rule that I can get only one of the three. If I get the best network, I must be paying a premium. If I'm paying, if I'm getting value, I must be getting a bad network, right, and we're all about smashing through that contradiction. There's one place where you can actually get all three, and because of that position, we're seeing kind of gravity flow towards us. We're seeing huge demand. We're seeing that in terms of our NPS. We're seeing that in terms of perception and purchase intent. That's, if you'll have it, the Uber phenomenon that's happening, which is why we're outgrowing the industry. Now, the specifics of 2025, look, the way we think of every year is we tend to think of what will drive switching in the year.
We tend to look at, like, in 2025, for example, there were more 36-month plans that were coming to an end, right? And that's some of what led us to have a higher expectation, right? We tend to look at what are CLVs. So really, is there enough demand, and is the demand robust economically, right? Is there enough demand? Gets driven by how many switching events there are. And, how robust is that economically gets driven by looking at what our CLVs are and what we expect them to be, right? So in 2025, our guide came from a view of there is going to be these jump balls. We're great at jump balls because of the first piece I talked about, our competitive position. And we saw very robust CLVs. W e guided, and we actually went out and overachieved that.
You should expect us to look at the world similarly in 2026. What are the jump ball events? What are CLVs? We tend to guide not based on how many postpaid nets are there in the industry. That's kind of, for us, a really hard number to get our head around because what one person calls a postpaid net, another person doesn't. We tend not to look at this from the perspective of what did we do last year versus what should we do this year. We tend to look at it quite purely from a how many jump ball events, how strong are CLVs, therefore, where should we position ourselves so that we grow in a responsible manner and we grow in a manner where we try to rate industry economics along with our growth.
Got it. I don't want to jump the gun here, but as you look at the 2026, how are the jump balls? How do you have them shaping up? I agree with you, the way we look at the mobile industry. You had a big cohort coming off these 36-month payment plans last year. How is the cohort in 2026 look versus 2025? And also, how have you seen sort of CLVs evolve through the year?
CLVs in 2025 are looking really strong, right? We'll talk more about this at guidance because I don't want to kind of start steering guidance on 2026.
Okay. That's right. G o ahead and get started.
I get that, John. No. But look, we'll talk about this more at 2026 guidance. What you should expect from us is a responsible guidance. That's based on our view of jump balls, and our view of CLVs rather than something that's somehow wedded to an industry nets number or our nets number from last year.
Got it. I think one of the main concerns among wireless investors is the competitive environment, right? You have a new leadership at Verizon that seems to be more focused on subscriber and, I would say, branded market share gains. What do you think the ramifications are for wireless and for T-Mobile as we look out to 2026?
Look, I think, on the whole, we're used to a competitive industry. We've seen whatever we've seen on Black Friday as well is per kind of pretty consistent with historic levels of competition. This has been a competitive industry. The shape of competition changes, from sometimes being focused on rate plans to sometimes being focused on devices. That's why we tend to look at CLVs and how robust they are. To your specific question on Verizon, look, I mean, our strategy has been different from theirs. When you look, I don't think Verizon has a network share problem, right? If you look at their network share as a whole, it's pretty robust.
Right. Including wholesale, you're saying?
Exactly. W hen you look at network share, which is what Verizon is a t the heart of it, right? Our bias has been always to focus on branded nets, and so with the way we think of it is that feels more like a brand problem or a brand distribution problem and shares between brands rather than a Verizon network problem, but frankly, you're probably better off dealing with that question with them. What we're very, very focused on is growing responsibly, growing with innovation, which is why things like 15 Minutes to Better were a big part of it. We want to grow because consumers see the value of having no trade-offs, and consumers see the value of a simple five-click process instead of having to wait four hours. That's what should drive our growth because when we drive our growth like that, CLVs are robust as well.
Got it. Yeah. And we'll come back to the digitalization and the 15 Minutes to Better. You said Black Friday was pretty much in line with what you've seen in the past. I mean, can you talk a little bit or put some more color around that? What you saw from competitors, what T-Mobile had in the market, and how that positioned you for the holiday selling season?
Yeah. Look, we upped our guide on postpaid nets t o 3.3 million. We're having a great quarter. We were confident of hitting our guide. Black Friday, like all events in this industry, you know, when promotions pulse in and out. It's obviously something we monitor closely. I think where we are is a level of competitive intensity, which has been pretty consistent with where this industry has been in the past. We're feeling good about CLVs and the way we guide it. I think most importantly, it's really easy, John, to get lost in, you know, this promotion versus that promotion. A couple of things that are worth keeping in mind. When you look at Black Friday headlines, for example, and I can tell you why and how it works for us. As the switching leader, we tend to get full account switching, which means it's not just the headline offer, it's the entire account that comes over. And a reasonable proportion of that account will not take the headline offer because you're getting an entire family in.
So when we look at CLVs, we look at the CLV of the account, right? Also, the broader picture is while we can get kind of distracted by specific promotions, there is a direction of flow which gets driven by the differentiation of having best network, best experience, and best value.
Got it. Makes sense. Maybe a couple sort of more micro questions. If you look back to the third quarter, churn only grew by 3 basis points, and upgrades were effectively flat for T-Mobile. Now, those are very different trends than what we're seeing from your competitors. So, you know, how are you achieving this and sort of how is T-Mobile positioned, I guess, across these metrics as we look out to next year?
Let's take churn, right? Again, it's useful to see these things in a multi-year arc, right? What you've seen over the last five years is a big improvement in our churn. Now, that's kind of entirely rational when you put that together with what's happened on our network experience. We've maintained our value position while the network offering has improved substantially, right? Now, we also don't have the lumpiness of 30-36-month contracts. W e didn't have the suppression, and then the release from the suppression. W hat you've seen when you look at it over a period of time is a secular reduction in churn driven by the quality of the offering, right? On the upgrade side, upgrades are more complex to predict because they're a function of what is the inflow of plans, what kind of subsidies do they have linked to them, what kind of periods do they have. It gets linked to devices and things like that.
I think our secular upgrade trend, though, has been driven by something else, which is as the network has moved to become the best network in America, fewer and fewer of our customers have felt the need to upgrade device to experience the best network, right? Because the network, I mean, even when you take the latest devices, right, our network clearly outperforms our competitors. We're 40% faster speeds than one and 90% faster speeds than the other, right? What you're seeing, therefore, is a stickiness to network quality independent of device, which is one of the factors that leaves structure that leads to structurally lower upgrade rates for us.
Got it. Now, one of the hallmarks that we've seen for T-Mobile over the last several years is just its faster service revenue growth than your competitors, you know, by a pretty good gap. Can you unpack sort of the drivers of that faster service revenue growth and the sustainability of that premium that you get versus the industry?
Yeah, absolutely. I mean, if you just look at last quarter, we talked about 12% postpaid growth, right, with 6% growth in EBITDA. You look at our multi-year guide, it's kind of a 5% growth in service revenue, 7% growth in EBITDA, and probably most impressively, a continued 26% free cash flow generation, right, which is industry leading, which ultimately, given all the accounting shenanigans on every other metric, the true show-me-the-money metric for me is cash, right? Now, all of that is sustained on the one hand with volume, which we've talked a lot about, and the second is our value growth, and if you look at our value side, we again changed our guide this year to 2% ARPU and 4% ARPA growth, excluding M&A on the ARPA side because you'll have some dilution there.
Now, all of that growth in value per customer or, more importantly, value per account, there's kind of three drivers to it. The first is on our inflow or the new customers we take in. The fact that we're able to do more for more, which is sell people up the ladder with things like streaming benefits, with things like T-Satellite, with everything else we're adding to it. On the back of the fact that our existing customer base is, or what you'd call the backbook, historically stood for value, means you get a lot of accretion, just by people coming in, right? Even when we talk about things like a 2% ARPU growth, if you look at our pure consumer business, it's higher than that because we're also growing in business, which tends to be ARPU dilutive.
Piece one of, outside of volume, piece one of our formula tends to be more for more, sell up the rate plan ladder, at the front end or for new customers. Piece two of it is then more for more on our base, especially with things like FWA, which is adding ARPA and creating growth there. And there's the third piece, which is the smallest of the three, but something that we're acutely conscious of from time to time, which is looking at our legacy rate plans and doing rate plan optimization on those, right? So when people talk to me about pricing power in this industry, I see us having substantial pricing power because you look at 4% ARPA growth, right? That, to me, is the heart of pricing power.
Pricing power isn't simply the ability to kind of, you know, do the old cable-style whack-up pricing, right? It's also what you do in terms of value delivery and more for more, that creates value growth.
Given that, I guess, the cable style, as you referred to it, which I'll be using in the future, price increases are such a small percentage of the ARPU benefit you've seen or the ARPU trend you've seen. It sort of suggests to me that those ARPU trends are more sustainable than people might think.
Absolutely. I mean, this is I mean, what we're here to do is create sustainable pricing power in this industry, right? And of course, there will always be a mix. We can debate how small, how large. That'll vary depending on, what happens with legacy plans. But the heart of pricing power for me is a combination of all three, right? It's a combination of being able to upsell at the front end. It's a combination of then being able to attach more product to existing customers. And then when you have, rate plan optimization that you need to do, bringing that in. But that gives us substantial pricing power, certainly for us as a business. To your point, sustainable pricing power.
Right. Another sort of hallmark of the third quarter was despite the strong revenue growth and the subscribers, you had some pressure on margins due to some new spending. So could you talk about that, those new spending initiatives, and are they expected to continue into 2025 into 2026?
Yeah. I debate the pressure on margins.
Okay.
In a quarter where we delivered 6% EBITDA growth, it's ironical to talk about pressure on margins. But look, the investment is undebatable, right? We invested in three or four big places. One is the digital transformation that we just talked about, the digital and the AI transformation. Now, let's spend a few minutes on that, right? Because we're investing in the way we've always thought about it is the digital and AI transformation is here for us to dramatically change the experience because we've not gone at this from the perspective of how do we shave off 5% of costs.
We've gone at it from how do we dramatically change the experience with the belief that if we dramatically change the experience or when we change the experience, what will fall out is much happier customers and way lower costs, which meant we had to first invest in the capabilities, so which was a big investment in our digital and AI capabilities, including our deep partnership with OpenAI. The second thing you've got to do is then customer adoption, which is it this isn't kind of, you know, here's my app, go try it tomorrow. The first thing we did with upgrades was say, when you walk into a store, right, and now this happens in every T-Mobile store, when you walk into a store, the first thing that'll happen is you download the app, and we show you how to do the upgrade, a bit like airlines, right?
And now 70% of our upgrades are digital. That's a huge movement. We're going after exactly the same thing with new customers, right? We're now with Easy Switch; all new customers can become customers of T-Mobile by downloading the T-Life app. And I often say this. T-Life with time becomes our only IT system. It's the universal interface by which you interact with T-Mobile. Now, all of that investment in has also meant kind of running things in parallel because it's not like we dramatically reduce stores purely because we've got the app. The first thing that the stores do is work with customers to drive that adoption. With time, will we see fewer stores? Yes, right? But we're going through that. We've gone through, especially, in Q3, and as we go through Q4, that period of investment on the digital side.
When we talk about network, again, very similar thing. We've rolled out thousands of new sites. The revenue stream from those sites will follow, right? And that's what you're seeing in some of this investment. I'm looking forward and quite excited to share our 2026 and 2027 guidance, because, as I said at our earnings call, we will increase our guidance, to reflect both the M&A but also the underlying strength, that we're seeing in the business. And that will also reflect, and we'll spend some time talking about, the dividend from the investments, in digitization and AI.
That's great. So in terms of the spending, the spending is on the systems and just promoting the app, getting people to understand the power and to create that usage and.
Also in the dual running, right? Because it's not like both, and when you talk about Q3, there was also outsized customer growth.
Right .
But to your in terms of the investments, it's in customers who will pay off next year with strong CLVs. It's in digital and AI, which is both kind of, the systems itself but also the parallel running. Because you're coach, you're driving adoption. And then it's a network, where you are building thousands of new sites.
If we're looking at over the next two years, you said the 2026, 2027 guidance. We'll get to the point where not only do we see that some of the spending come down, but we'll also start to see the payoff of these digitalizations.
We will see the payoff of these digitizations, absolutely.
Got it. Great. Maybe let's turn to broadband and first starting with fixed wireless. Very strong, frankly, surprisingly strong third quarter numbers in terms of fixed wireless. What drove the acceleration and, sort of, you know, and I know you have the 12 million guide out there, but talk about sort of, you know, how much runway you have, maybe heading into that and maybe beyond the 12 million guide?
Split that into two, right? I mean, like with a lot of this stuff, I think it's, it's simpler than kind of lots of tactics. It's just a it's just an awesome product, right? That's the heart of what's driven the outsized growth. Now, you look at you look at this product, right? We've doubled the number of customers in the last two years. Each customer uses 30% more, and yet our speeds are close to 50% higher, right? So you've seen now a product which has scaled to 8 million customers, and it's still getting better. It's an incredibly easy product to use. All you need to do is plug it into a wall, right? You don't need drilling. You don't need the complex fixed line process. It's just an addictive, easy product to use, and the quality of performance has been outstanding. It doesn't surprise me that we've seen those outsized results.
We've got a 12 million guide out there, and you know this team. We're working every day to see what we can do, right, to make that even better, right? Do we have any news? No, not right now, but what makes us really positive about this product and the amount of capacity that this product has is the evolution of mobile technology, right? What we're seeing is better routers, which is great. We're also seeing innovations happening even in 5G, which is things like L4S, which allows us to optimize and shape our traffic much better. We're excited about where 6G could go in terms of further capacity. We haven't yet built in any impact from additional spectrum that'll come in, right?
Now, all of this, remember, is in the fallow capacity model, right? We're also seeing great uptick, uptake of this stuff, in B2B, which is really good because it's off-peak usage. W e're seeing multiple growth factors and really strong momentum as we move from the 8 million towards the 12 million .
Right. You mentioned 6G, and I want to sort of move from fixed wireless, but T-Mobile was featured prominently in the NVIDIA, Nokia announcement not too long ago about AI- RAN. Can you talk about the benefits to incorporating AI into your network in the RAN? What does it do for the fixed wireless business, and what could it do for the overall network and maybe the timing on when we should see this?
Just let me start with the timing, right? Look, some of these developments will take time. Some will come in quicker. But there's one thing that's really clear in my mind. We led this industry through 5G, and we will lead it through 6G, right? We will drive the ecosystem, and we will be the 6G leaders. On the specifics of 6G or AI- RAN, and you can use those interchangeably, three big elements that are exciting. First is what Jensen at NVIDIA often calls the physical AI, right? And what is physical AI, right? Now, I think there's a piece of moving away from ChatGPT as the fundamental form of AI to actually automation and robotics. Now, to make that happen, you need low-latency connection between the robot or the device and the network.
Only 6G can give you that. You also then need a network that's not just capable of processing bits and bytes, but that's also capable of processing tokens, which is edge AI, right? Now, this has been talked about for a while, but with 6G, it becomes real. That opens up some fascinating new revenue opportunities. So to have robots actually functioning, to have factories automated, or what Jensen, at NVIDIA calls, physical AI, and I love that phrase, you need a network that can deliver for, that can deliver physical AI, a network that's low-latency enough, and a network that can process, not just bits and bytes, but also tokens. So that's one big exciting opportunity. I think the second big thing, is what it does for our network because you'll have more bits per hertz. You will have more efficiency through the standards.
You will also just have greater optimization protocols. So today, most apps are quite hungry, right? W e'll end up not optimizing how much bandwidth we give. With 6G and AI, and this is, where AI helps optimize our own loads, you will see a lot more being squeezed out of the network, and that helps massively with things like fallow capacity models.
Right.
And the third, probably as big piece, is going to be cybersecurity, right? And what we can do from a cybersecurity perspective, including things like 6G will have ISAC, which effectively is the equivalent of a radar in the network. And the applications from a cybersecurity perspective, especially being quantum safe, are huge. P ut all of that together, and that will come in through different points. S ome of the efficiency improvements we're already beginning to see as part of 5G Advanced. Some of the physical AI stuff, some of the other stuff will flow through. And it's really important that we work with NVIDIA, with Nokia to build a U.S. ecosystem, and with time, a Western world ecosystem that really drives 6G forward.
Got it. Just before we move on, I mean, when you talk about improvements in spectral efficiency from 6G/AI- RAN, what can you sort of size that? Is that sort of two to three X what you're seeing, or are we talking dramatic change in in sort of efficiency of the network?
It's early days. It's early days, so it's difficult to size right now. I'd just say it's substantial.
Got it. Okay. All right. Maybe moving on to fiber. Srini, you have a lot of experience in fiber with your experience in Europe. What are the main learnings from your fiber experience in Europe that can be applied to the U.S.?
So, yeah, I've rolled out fiber in, I think, 12 countries now. But the two big learnings from Europe are one, customers will make different trade-offs on the speed value matrix. I t isn't fiber takes it all, right? You will have, and that's why we're really bullish about FWA. It never ends up being one technology takes it all because customers will not, everyone wants a 2 Gb connection with kind of, and paying whatever price they pay for it. You will find people positioning themselves at different points, and we feel really good about FWA and kind of the progress FWA is making, especially when you compare it with the progress DOCSIS is making. The second thing that I think you learn in multiple countries is the strategy of an incumbent and the strategy of a challenger are very, very different.
If you are the incumbent because what you're trying to do is protect a declining cash pile from copper, then, kind of, you know, land grab and homes passed becomes a key metric because what you're trying to do is protect a legacy declining business, especially in B2B. If you are the challenger, which is what we are, then your focus is building scale on paying customers. It's homes connected. It's penetration that ends up being the big deal, and it's the economic return you make on the investment. That's the big deal. If you're an incumbent, you want to make sure you protect a decline in your existing business. If you're a challenger, you want to make good ROE on it. That's why we're focused and obsessed by what penetration we drive, what kind of economic return we drive in our JVs.
Right. So you have targets out there for 12-15 million homes passed by 2030. You know, can you give us a sense of sort of where you are now, how that builds over time and what kind of penetration rates you expect to see as the strategy matures?
Our penetration rates that we're assuming for the returns we've talked about are very consistent with industry standards. We're seeing a lot of benefit from the T-Mobile brand, from the T-Mobile distribution.
You have the highest NPS there is. You would imagine great distribution, you know, some.
We're feeling really good as we build towards that. I mean, if your underlying question there, John, is about scale, I think this is a misunderstood thing, right? Because when we think about scale, we think about broadband customer scale rather than fiber homes passed scale. I'm not sure why fiber homes passed scale is relevant, right? Fiber ultimately is a local scale business, and fiber homes passed on a local level matters because of things like permitting. But when you're looking at national scale, what matters is broadband scale because you want to be able to market to a large number of customers. And that we have with FWA plus fiber. If I was to convert our FWA and fiber into homes passed equivalents, our plan is already like 45 million homes passed, right?
Just because that's the scale that matters. The scale that matters is ultimately how many customers you have, right? Which, with FWA plus our fiber rollout, we will be at scale.
Right. Got it. What are the prospects of doing more, fiber to the home JVs? And can you just talk about the, the sort of economics you're seeing both in terms of those JVs and just in the, the broadband, the fiber business in general?
Everything we've seen so far from the JVs are really strong and positive. We will do JVs when we get them at the right economic terms. W e're always open to that conversation. But like I said, we don't feel the need to rush into a game of more and more fiber homes passed, purely because it leads to some mythical thing called convergence on the back of that, right? What we're focused on is driving scale with FWA and driving scale with our JVs, especially from a homes connected and paying customers perspective.
Got it. Those comments sort of lead to the question we've been getting a lot. You know, a lot of change happening in the broadband world. We're also seeing a sort of increase in sort of overall deal activity. What's your view and T-Mobile's view on, on cable? Obviously, the valuations have never been cheaper. They're out there, their fundamentals are obviously under some pressure. Are cable assets attractive to T-Mobile as a way to sort of, I mean, I think you might have already answered it, but gain scale and sort of drive a converged product?
No.
Okay. That was very clear. Maybe we have a little bit of time. Maybe give us an update on the UScellular acquisition. How's the integration going? And anything you can tell us about sort of synergy realization?
Look, USc ellular is going great. We updated our synergy number from $1 billion in 3-4 years to $1.2 billion in 2 years. It's a huge contribution to our SMRA strategy. It brings us 47 MHz, right, for 37 million pop, which is just great in terms of what it does to our network. The integration is well on track. We've got a playbook, the Sprint playbook, and that's really what we're using here. W e're feeling really good about it.
Great. All right. And just quickly to wrap up, you've been spending about $10 billion in annual CapEx. Is that a sustainable level? And how should we think of free cash flow over the next several years, you know, given all the inputs on the broadband side, the momentum you're seeing in subscriber growth and just the overall outlook in terms of the growth of that metric?
First on CapEx, we moved $9.5 billion to $10 billion this year to account for USc ellular. I think we've suggested already that 2026 will be $10 billion again. But you should see those as one-time, and don't drag right on your spreadsheet to make it $10 billion . Our long-term guide continues to be $9 billion to $10 billion , right, with going up because of the USc ellular, this year and next year. In terms of the overall business, I'll just answer the cash flow and then kind of try and wrap up the whole thing. Look, from a cash flow perspective, we have the unique position of generating industry-leading free cash flow conversion. And all the investments that we're making today, only further underscore that point, right, and further build on this ability to maintain that industry-leading free cash flow generation. That's a huge metric. It's one we're laser-focused on.
If I was to kind of put all of it together, look, I feel it's a complete privilege and honor to be able to lead this business at this point in time where we've had 13 years of continuous success, as the Un-carrier, and I'm able to sit here and say the best is yet to come, and that conviction of the best is yet to come for me gets driven by the incredible team that we have, the bench strength that we have, our proven ability to execute, and our willingness to transform ourselves, as you're seeing with the network, as you're seeing with digital and AI at the point where, in many ways, we're at our most successful.
That hunger, that desire to continuously transform ourselves and reach for the next thing and reach for the next source of growth, this whole attitude of we won't stop is what makes us special.
Great. It's a great way to leave it. Srini, thanks for being here.
Thank you.
Thank you. That's great.