New York
CNN
—
Investors saw a lot of red in 2022. But a company known for its magenta logo was a stock market darling this year.
T-Mobile Stocks
(TMUS) grew about 20% in 2022, even as rivals AT&T
(T) and Verizon
(VZ) tumbled. My Bell was down about 2% while Verizon
(VZ) plunged more than 25%.
T-Mobile is now worth around $175 billion as well, more than Verizon and AT&T, both of which are components of Dow. T-Mobile’s strong performance on Wall Street is a key reason CEO Mike Sievert is CNN Business’s pick for CEO of the Year.
Sievert beat several other contenders, including Michele Buck at Hershey
(HSY)Western Petroleum
(OXY) IBM’s Vicki Hollub and Arvind Krishna
(IBM). He joins Choice of the CEO of the year 2021 Albert Bourla by Pfizer
(EFP) and previous winners Marc Benioff from Salesforce
(RCMP)Target
(TGT) CEO Brian Cornell and Chipotle’s
(GCM) Brian Nichol.
T-Mobile had an impressive year despite many economic challenges, including inflation. The company continued to gain market share at the expense of its competitors.
He also spent more money to cover the country of increase in 5G coverage and he has entered into some remarkable partnerships, including one with Elon Musk’s SpaceXto try to win more customers.
CNN Business told Sievert how T-Mobile has continued to perform well in a highly competitive business.
Sievert said the company is aware that “consumers fear inflation.” That’s why T-Mobile tries to keep prices low, even though competitors have increased the cost of many of their plans. because inflation hurts their profitability.
T-Mobile is even continue to cover costs by Netflix
(NFLX) subscriptions for its subscribers following the streaming giant’s price hikes.
“This is just another example of our strong investment in customers, changing the industry in their favor, putting them first and investing in them,” Sievert said.
The strategy is working. T-Mobile, thanks to its merger with Sprint in 2020, is now the second largest mobile operator in the United States, ahead of AT&T and behind Verizon.
The company has around 112 million customers and has been adding subscribers at a faster rate than its two main rivals. A data breach in 2021, which is T-Mobile paid $350 million this year to settle class action lawsuitsdidn’t slow growth either.
But there are a few concerns. Sievert said inflation was one of them, mostly for his employees. He explained that the company had increased the wages of the workers to take account of the rise in prices. That led to increased spending, but Sievert said T-Mobile was less concerned about inflation than other consumer companies.
“We’re somewhat inflation-proof,” he said, adding that T-Mobile’s average revenue per customer rose this year, not because of price increases, but because of due to the fact that one of the company’s most popular plans is a higher price. service that offers more features.
Growing recession concerns are also a problem, although Sievert said, “We don’t take it for granted that a recession is coming. But we are ready if it is.
Sievert noted that wireless customers are likely to be very reluctant to cut back on their phone usage, even if the economy heads south. That could make any downturn next year less of a problem than the Great Recession of 2008-2009 was for mobile phone companies.
“We are in a category that people will remember. It’s very different from 2008 before the smartphone revolution. People will cling to wireless,” he said.
It helps that wireless technology is also much more advanced today than it was 14 years ago. Sievert said T-Mobile was also able to capitalize on the fact that it spent heavily on wireless spectrum auctions to fill out its 5G coverage map across the country.
“It’s about more devices that can connect customers with devices that serve all of their lives, including the rapid growth of 5G home broadband,” Sievert said.
“We feel so lucky to have this massive multi-year lead in the 5G race in this category,” he noted, adding that T-Mobile was “last” in the 4G market not long ago. so long.
But AT&T and Verizon are also ramping up their 5G coverage plans. And let’s be honest. There isn’t much left to differentiate one wireless carrier from another. They all offer pretty much the same new and popular phones from Samsung
(SSNLF) and Apple’s latest iPhone 14
(AAPL).
Enter SpaceX. T-Mobile this year announced a joint venture with Musk’s rocket launch company to use SpaceX’s Starlink satellites to bring wireless service to areas with little or no coverage.
“The idea of being able to connect anywhere you can see the sky is potentially revolutionary,” Sievert said. “We are now trying to create a service together that will connect your mobile phone directly to a satellite,” he said.
Sievert said he and Musk worked together “repeatedly” to close the deal, adding that he was impressed with “how driven Musk and the entire management team at SpaceX were for the mission.”
“You can just feel the passion when you talk to Elon or any older person at SpaceX that they deeply believe in the importance of what they do for humanity,” he said.
Sievert, who has been with T-Mobile since 2012, took over as CEO from longtime CEO John Legere in 2020. Sievert is perhaps a little less pompous and flamboyant than Legere, who was known for taunting the competition, not to mention his long hair and penchant for leather jackets.
Still, Sievert remains confident that the business will continue to grow. To that end, he’s not worried that cable companies are also trying to cash in on the wireless boom. The two Comcasts
(CMCSA) and Charter
(CHTR) have agreements with Verizon to offer mobile phone service on the Verizon network.
Sievert said he respects cable competition.
“These are very successful companies that seem very serious about space,” he said. “But I would much rather be a mobile company using advanced 5G technology to challenge the cable space than the other way around.”
But Sievert isn’t too concerned about them hindering T-Mobile’s growth.
“Cable has been in the wireless business for years, and they’re having some success,” he said. But he added that it was more on the lower end of the market.
Instead, T-Mobile wants to keep trying to attract more subscribers willing to pay for premium plans. And Sievert said T-Mobile can do that by continuing to market itself as the so-called “non-carrier” that’s different from all of its rivals. This includes heavy use of its prominent magenta logo.
Sievert even joked that Pantone just named Viva Magenta its color of the year.
“We are trending for 2022 and 2023,” he said. But it’s been part of our imagery for a long time. And what we want people to see at a glance is that our company is a little different from all the others. This is not a tired, stuffy old telco. This is a technology company that is deeply passionate about what we do.
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