T-Mobile CFO Stresses Satellite and Fiber at Morgan Stanley Conference
T-Mobile’s SpaceX-enabled text messaging service, T-Mobile Starlink, is just the start of space-based communications the carrier plans to offer, CFO Peter Osvaldik said late Wednesday at a Morgan Stanley financial conference. Much of the discussion was about satellite communications and fiber, demonstrating T-Mobile’s evolving business plan.
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T-Mobile unveiled beta testing of T-Mobile Starlink during the Super Bowl in February (see 2502100002). The service “begins with texting, and then later we’ll bring” voice and data, Osvaldik said. T-Mobile isn’t revealing the financial terms of its deal with SpaceX, he said. “It’s a long-term, exclusive relationship.”
“We partnered with SpaceX because, obviously, they have a unique, differentiated capability to not only develop satellites, but also deliver payloads into space,” Osvaldik said. There are 500,000 square miles in the U.S. “where there is no terrestrial coverage, and the economics don’t make sense to bring terrestrial coverage,” he said: The service also provides “peace of mind” for customers, especially during emergencies like hurricanes and the Los Angeles wildfires. Osvaldik said even his brother and family, “avid” mountain climbers, are eager for the service: “He’s like, 'When can I get this?'”
Osvaldik said fiber can be “a great business.” T-Mobile anticipates closing joint ventures announced last year to buy fiber providers Metronet (see 2407240020) and Lumos (see 2404250047) sometime in 2025, he said. He also forecast a 2025 timeline for closing T-Mobile’s purchase of wireless assets from UScellular (see 2412270031). Some parts of the fiber business are slightly different from wireless, he said. With fiber, “you canvas the neighborhood as you’re going to build it, do all the smart things to generate excitement before you’re actually digging the ditch and tearing up people’s yards.”
T-Mobile is seeing gains, especially among customers it views as “network seekers,” Osvaldik said. Those are “customers who value network quality above all else, are willing to pay a premium,” he said. “Those are ones we're seeing come to T-Mobile as the reality of the network leadership starts and continues to grow in consumers' minds.”