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At the end of 2012, T-Mobile US found itself in a tough spot, with a market capitalization under $6 billion, trailing significantly behind industry giants like AT&T and Verizon. However, a transformative rebranding effort in 2013 saw the company position itself as the “un-carrier,” emphasizing a fresh approach with simplified pricing, flexible contracts, and enhanced customer benefits. This strategic shift, coupled with the crucial merger with Sprint in 2020—providing essential mid-band spectrum for 5G—catapulted T-Mobile into a new phase. Today, the company enjoys a market cap exceeding $200 billion and serves over 100 million customers, establishing itself as one of the largest and most valuable mobile networks globally.
Despite this remarkable growth, T-Mobile continues to uphold its original ethos and the “punching upwards” mentality that drove its rapid rise, as stated by CEO and President Mike Sievert. Sievert, who became CEO in 2020 after serving as COO since 2015, remarked, “We have more opportunities in front of us than ever, as we’ve evolved from merely a telecommunications provider to a technology leader, giving us a fresh platform to serve our customers.”
Through partnerships with leading AI firms like OpenAI and Nvidia, T-Mobile has been recognized by TIME as one of the 100 Most Influential Companies in 2024, positioning itself to shape the future of connectivity over the next decade. In a recent discussion with TIME, Sievert shared his perspectives on the company’s vision.
This interview has been edited and condensed for clarity.
In your conversation with Nvidia CEO Jensen Huang earlier this year, you talked about co-inventing the future. What does that future look like to you?
Given T-Mobile’s current standing, we possess a unique opportunity to influence the future of connectivity.
Connectivity has become increasingly essential in our lives. Just last week, a significant storm hit Seattle, leading to a power outage at my home, yet our connectivity remained strong. Even though the closest T-Mobile tower was offline, our self-healing network rerouted signals from a farther tower.
It dawned on me that if I had to choose between power and connectivity, I would lean towards connectivity. Being able to check in on my children and my mother, even in the absence of electricity, underscored the crucial service we provide. This realization drives us to collaborate with leading experts in the field to envision what connectivity will entail in ten years.
AI technology will undoubtedly be a significant force in this future: networks will be designed for real-time optimization, ensuring users experience optimal connectivity wherever they are.
With Jensen, we are exploring what we call AI-RAN (Radio Access Networks). We already have computing capabilities at our numerous network nodes nationwide, and our goal is to virtualize this into 60 data centers positioned near the edge of our network—this will allow us to leverage the efficiencies that come with a centralized virtualized data center.
Network demands vary throughout the day. By utilizing excess computing resources for AI tasks during off-peak hours, we can significantly enhance user experiences.
What does it mean to virtualize the network into data centers, and how does this improve user experience?
In our core operations, AI-RAN can create self-correcting networks in real-time, which becomes increasingly vital as data loads rise. AI technology will amplify network demands, making it crucial for us to stay ahead of this escalation.
Imagine a future where you’re uploading a high-definition video to an AI cloud, and a large vehicle temporarily blocks the signal between you and the tower. As you move, the network will automatically recalibrate to ensure your upload continues uninterrupted.
We expect AI workloads to play a pivotal role in our edge cloud strategy. Presently, we manage two types of workloads: substantial cloud tasks requiring extensive computing resources and localized AI processing on devices. These are fundamentally distinct approaches.
We foresee a “Goldilocks demand,” where emerging large language models (LLMs) will increasingly focus on processing video, images, and audio. To analyze real-time data effectively, a blend of cloud-like computing power with proximity to the user is essential, making edge clouds an ideal solution.
While we have yet to establish a business model for this initiative, I recently presented an exciting multi-year plan at our capital markets day that did not include this aspect. Still, we consider it a substantial opportunity, especially as T-Mobile has developed a vast infrastructure and technological capabilities that were not available a few years ago.
We believe that as AI applications become increasingly immersive, they will benefit from the Goldilocks architecture I described. Whether this assumption holds true remains to be seen, but the positive news for our financial outlook is that it doesn’t matter—we’re committed to building it, knowing it will enhance our core business.
Your collaboration with OpenAI has led to the creation of “IntentCX,” an AI-driven platform designed to comprehend and address customer needs in real-time, slated for launch in 2025. What does an ideal customer experience mean to you?
A crucial part of our strategy is to eliminate friction points. To become an outstanding wireless service provider, we aim to reduce customer interactions by proactively addressing potential issues.
In 2023, we achieved our lowest churn rate ever—though, given our size, that still meant 8 million customers switched to other providers. I liken it to an “accident chain”—each customer who left encountered a series of problems that led to their frustration and eventual departure. Each individual leaves behind a trail of data indicating what went wrong and how we could have acted differently.
Historically, we haven’t utilized this data to its full potential; we’ve only skimmed the surface. However, over the past two years, we’ve restructured our data systems so that AI can analyze all pertinent information—network data, billing data, customer interactions, and more—simultaneously to uncover these trails.
We aim to develop advanced bot technologies that will genuinely impress. However, it’s not about creating barriers between us and our customers; it’s about using this technology to foster an experience that builds their loyalty to us.
T-Mobile recently announced a transformation from being a “challenger” to a “champion.” What does this change entail?
As I guide a team that has achieved remarkable success over the past decade, one of my primary challenges is maintaining everyone’s drive, humility, and determination to embrace the future. Our approach has evolved.
In the past, T-Mobile was a smaller player competing against much larger rivals, fostering a culture of striving against giants for the benefit of our customers. We initiated the “un-carrier” movement because we were fundamentally different from those large corporations. We often reminded ourselves that one day we’d reach or exceed their size, but we must remain distinct from them—companies that overlook their customers, take them for granted, and lack innovation. The pressing question now is how we can uphold that ethos during this successful period.
This encapsulates our transition from “challenger to champion.” Rather than simply addressing the shortcomings of others, can we set new industry benchmarks that no one else has envisioned? For example, can we lead the way in offering direct-to-cell service through a partnership with SpaceX, eradicating dead zones and enabling mobile phones to connect directly to custom low Earth orbit satellites? We announced this initiative two years ago and are nearing its launch. Another example is “T-Priority”—using advanced 5G technology to establish a dedicated 5G network for first responders nationwide. Our focus during this challenger-to-champion phase is to pioneer innovations that others cannot replicate.
During a recent earnings call, you referred to T-Mobile’s “secret sauce.” How would you describe it?
One defining aspect of our success over the past decade is our commitment to delivering on our promises—something no other company in our industry can claim. If you were to compare our Capital Markets Day in 2021 with those of our competitors, you’d find that we are the only company still actively pursuing the initiatives we outlined. This reliability resonates with investors, the public, and our customers, showcasing our capacity to execute.
Additionally, we must stay ahead of emerging trends. Perhaps we were fortunate, or maybe we were insightful, but a significant part of our success has stemmed from recognizing the potential of 5G technology. While most of the industry believed that 5G would focus on new devices rather than smartphones and that it would rely on millimeter wave spectrum, we took a different perspective.
We understood that customers wanted their smartphones to work seamlessly everywhere, delivering speeds at least ten times faster than before. The technology to achieve this lay in mid-band spectrum within a layered 5G network. Consequently, we acquired Sprint, which held a wealth of mid-band spectrum but struggled with its business model. This merger has arguably been the most successful in telecommunications history, laying the groundwork for our current company.
We accurately anticipated the trajectory of 5G, and while competitors scramble to catch up, they find themselves years behind. It’s crucial to keep looking forward, and we are determined to navigate the next era successfully.
Are there any aspects of AI’s future that concern you?
My main concern lies in our ability to adapt quickly. Technologies are evolving rapidly, changing our interactions with computing and with each other. Companies that can predict these changes, invest wisely, and seize opportunities will ultimately prevail. A common question surrounding AI is whether it’s merely a fleeting trend or if it will genuinely create lasting value. I firmly believe this is not an AI bubble; it’s our responsibility as companies like T-Mobile to harness these advancements and showcase their transformative potential.
If companies like ours fail to demonstrate significant breakthroughs enabled by this technology, the perceived benefits will lag. This is one reason why partnerships with firms like OpenAI and Nvidia are so appealing—they recognize our proactive approach and share a mutual interest in delivering real value for end users while generating financial benefits for all parties involved.
We are already witnessing the promise of AI. After two years of dedicated effort, I announced a goal in September to reduce direct problem-solving and customer service interactions by 75% within three years.
We are on track to accomplish this. We have a detailed quarterly roadmap in place, and we’re already witnessing the value materializing. This is just one of several metrics I shared. We’re proving to ourselves that our goals are attainable, as we’ve laid the groundwork. Our T-Life app is operational, and by 2025, we aim to address the most challenging aspects of this initiative. Once we initiate key delivery components, I believe we will be on the cusp of realizing the full extent of this opportunity within the next year, and we can already sense that potential.
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