T Mobile's Opportunity to win Sprint and 5G

T -Mobile & 5G
The purpose of this project was to:
1. Update an investment idea and research work
created in ’18 that was a “big idea.” One that Wall
Street had absolutely not discussed, or focused on;
i.e. it was not considered.
2. Present to prospective employers how I frame new
opportunities and explain very complex situations

T-Mobile: How 5G creates the opportunity for a
transformation and substantial value creation
T-Mobile’s consistent obsession on increasing customer satisfaction
and value, being a consumer advocate and disruptor, Sprint’s
limitations, and the transition to 5G has created a substantial
opportunity for it to enter new markets and create more customer
lifetime value.
The merger with Sprint would be a major win for the consumer and the
nation as it will result in a more capable, higher quality, greater
coverage 5G network that is built faster than the status quo, especially
in rural markets. It will also bring more competition to the ISPs.
All rights reserved, Inflection Capital Management, LLC 2

A Unique Opportunity: T-Mobile is afforded an opportunity for substantial shareholder value creation due to its
obsession for enhancing the relative consumer value of its service, hamstrung competitors, and the transition to 5G.
Winning Brand For Consumers: T-Mobile, know for its “Un-Carrier” product enhancements, has created substantial
consumer affinity and brand love over the past six years, resulting in substantial and continuing market share gains.
Given the fixed-cost nature of wireless service, those gains have resulted in substantial profit and cash flow growth
which allowed the financial strength for the Sprint proposal.
5G Precipitated the Merger: Wireless technology transitions like 3G to 4G, and 4G to 5G, allow wireless operators to
enhance their relative network service levels and significantly disrupt market share. The 5G transition also creates the
opportunity for T-Mobile to acquire Sprint as the economics and physics of the merger allows them to deliver a superior
5G service in terms of coverage, capacity, and capability to what it could independently
Win for the Country: the New-T-Mobile significantly increases in competitive intensity of both the wireless and wireline
industry, incenting AT&T, Verizon, Comcast, and Charter to move harder and faster to enhance their services and
value. All of this is good for the consumer and nation; that’s what creates a regulatory opening for the merger.
Replay of the Past: The proposed Sprint & T-Mobile merger is a replay of the Metro PCS & T-Mobile merger, a
development that was significantly disruptive to the status quo and that yielded significant consumer benefits.
5G – Forget about IoT, Remember 4G: the transition to 5G allows the opportunity for significant incremental service
revenue from more consumption. More consumption will come from more lines of service for new devices, more data
consumption, cloud-based services, and other more speculative opportunities like IoT.
Approval to Happen: We expect the deal to be approved because it’s good for the nation, provides the mechanism
for underserved markets to get better telecommunication services than the status quo, especially as 5G threatens to
widen the digital divide, and because it will be trumpeted as a major win by the Administration. The FCC’s leadership
blessed the merger on May 20th.
3X Investor Return: Should everything go management’s way with TMUS appreciating from $75 to over $245.
Summary

TMUS’ Substantial Value Creation Opportunity
 The table shows a range of potential TMUS stock prices resulting from a range of fundamental outcomes.
 Should everything go managements’ way, TMUS stock price could exceed $246/sh, up 3.25X.
 The only way for a 3X increase to be possible is if the company and industry went through a significant and
favorable transition. That is what this presentation explores.
 We have no way to accurately estimates potential outcomes, to apply probability-weighted outcomes
would be a false precession that yields a meaningless expected return number.
 The Downside scenario is reflective of a break in industry pricing or an unexpected increases in costs that
leads to a -10% earnings revision and a contraction in the valuation multiple to 5.5X EV/EBITDA.
Dated: 5.23.19
Hitting Consensus means that
TMUS can drive EBITDA to
match the 2021 Consensus
estimates, while maintaining a
6.5X EV/EBITDA Valuation
6.5X & 5G means that industry
growth accelerates due to
increased consumer usage
(lines & data) & estimates rise.
Yet, valuations do not.
8.5X & 5G means that industry
growth accelerates and
margin levels improve. The
faster growth leads to
valuations expanding 30%
8.5X & 5G + S+ TMUS means the
prior plus the merger is
approved allowing synergies;
we estimate $8.5B in synergies
vs. $6.0B guide
Platform Economics means
that the 5G architecture
allows operators to capture
an portion of subscriptions,
apps, cloud, etc.
Year-End 2020 Stock Price Outcomes
Downside
Current
Price
Hitting 2021
Consensus
6.5X 2022
EBITDA w/ 5G
8.5X 2022
EBITDA w/ 5G
8.5X & 5G
S+TMUS
Platform
Economics
Value -$17 + $8 + $23 + $39 + $74 + $27
Total Value $58 $75 $83 $106 $145 $219 $246
Annualized Return -16% 7% 26% 55% 104% 121%

The Un-Carrier: Classic Strategy --
Disrupt the Status-que
Note: Prepaid & Wholesale are connections
2016:Unlimited Data 2017: One-Price and Netflix-on-Us
Wireless Service CPI: More Consumer Value
Incumbents move
to “Unlimited”
Since its 2012 merger with Metro-PCS, T-Mobile
has consistently given the consumer more value
and flexibility which has resulted in increased
competitive intensity for the industry.
The rise in intensity yielded:
 A substantial decline in wireless CPI
 Flattish industry revenue growth
 A less competitive Sprint that has
been pushed back to #4 and into a
unsustainable financial position as a
national carrier
5

Sprint + T-Mobile: A Replay of Metro by PCS + T-Mobile
 T-Mobile acquired MetroPCS (April ‘13 closing) coincident with the transition to 4G in order to foster greater
revenue and network scale and generate cost savings/synergies to fund its 4G network transition
 i.e to improve on its competitiveness versus Verizon and AT&T; this is the same argument that is employing to
regulators and the public to justify the Sprint merger.
 The merger created spectrum synergies to increase the capacity and coverage in major metro markets,
allowing T-Mobile to improve on its #1 consumer negative--network quality and coverage.
 Additional benefits came from leveraging the sales force and stores, and better leverage with OEMs (Apple).
 $1.5B in annual cost synergies were identified, at $3.34/sub/mo.
 The integration of MetroPCS went smoothly in ‘13 and the full synergies were realized by ‘14. During 2013, new
customer benefits included the elimination of service contracts, iPhones for the 1st time, increased network
capacity, and the expansion of 4G LTE coverage to 200m peoples.
 In the subsequent years, T-Mobile was able to improve its network quality and coverage such that its service
deficiency to industry leader Verizon significantly narrowed (as shown in the subsequent slides). That along with
T-Mobile’s value proposition strategies (Un-Carrier moves) strongly resonated with the consumer and these
allowed T-Mobile to gain substantial market share.
Synergies to improve coverage and value Network & spectrum synergies Spectrum Combination

T-Mobile’s Network Started Inferior
At the MetroPCS Deal
(as of Oct, 2012)
(no coverage w/ LTE)
Verizon’s LTE Network in ‘14
Verizon’s network was vastly superior
in ’14 & won the advertising claim
“Best Network”

T-Mobile’s Improvement in Coverage: No Deficiency
Verizon enjoys no network distinction 2018

Un-Carrier + Better Network: More NPS & Customer Love
Service Revenue Market Share Gains
Significant
Relative
Gains

The Un-Carrier, Market Share Gains
Service Revenue Market Share Gains, +46% improvement in 6 years
Postpaid Market Share Gains, +69% improvement in 6 years
Relative Churn Improvement, +90% in 6 years
Monthly Postpaid Churn 2012 2013 2014 2015 2016 2017 2018
Verizon (connections) 0.91% 0.96% 1.03% 0.95% 1.01% 1.09% 1.09%
AT&T Mobility 1.08% 1.06% 1.04% 1.09% 1.07% 1.08% 1.11%
Sprint (phone) 2.02% 2.22% 2.20% 1.74% 1.61% 1.66% 1.59%
T-Mobile (phone) 2.32% 1.69% 1.59% 1.38% 1.30% 1.19% 1.15%
Total 1.28% 1.25% 1.25% 1.15% 1.14% 1.17% 1.17%
T-Mobile vs. Others 1.7 X 1.2 X 1.1 X 1.1 X 1.1 X 0.9 X 0.9 X
millions 2012 2013 2014 2015 2016 2017 2018
Postpaid Phone
Verizon 84 86 88 89 89 90 91
AT&T Mobility 68 68 68 66 64 64 63
Sprint 28 27 25 25 26 27 27
T-Mobile 20 22 26 29 31 34 37
Total Postpaid Phone 200 203 207 210 211 214 220
T-Mobile Share 10.0% 10.8% 12.5% 14.0% 14.9% 15.9% 16.9%
$ billions 2012 2013 2014 2015 2016 2017 2018
Verizon $64 $69 $73 $70 $67 $63 $61
AT&T Mobility $59 $62 $61 $60 $59 $58 $57
Sprint $29 $29 $28 $26 $24 $23 $22
T-Mobile $22 $21 $22 $25 $28 $30 $32
Total $110 $111 $111 $111 $111 $111 $112
T-Mobile Share 20% 18% 20% 22% 25% 27% 29%
Significant
Significant
Significant

2013 2018
$ billions
Total EBITDA $4.9 $12.4
Net Debt $20.2 $23.6
Debt/EBITDA 4.1 X 1.9 X
2.75X Leverage
Borrowing Capacity Zero $10.5
Un-Carrier: Impact on
T-Mobile’s Profits & Cash Flow
Borrowing Capacity Increased
Leverage from Disruption
2013 2018
$ billions expect monthlies
Branded Customers (Avg)31.7 61.2
(millions)
Service Revenue $19.1 $32.2
(billions)
ARPU-Postpaid $52.60 $43.25
COGS $5.3 $6.4
Per Sub / Mo $13.86 $8.69
Est. GP-$ / sub / mo $38.74 $34.56
SG&A $7.4 $13.2
Per Sub / Mo $19.38 $17.94
Service EBITDA $6.9 $14.4
Per Sub / Mo $18.01 $19.61
Despite a 20%
decline in price,
EBITDA/sub improved
10% due to
leveraging fixed
costs
Leverage from filling
the network; lower
costs despite massive
increases in usage
and customer value
Customers per FTE
improved to 1200
from 800
Note: T-Mobile’s acquisition of MetroPCS
closed in April ‘13. That was the point of
time that they had the ability to scale.
~$3.35/mo of the price
decline was funded by
MetroPCS synergies
Wireless services is a scale-business. Given the market share gains
shown on the prior pages, those resulted in substantial profit and
cash flow growth, allowing the T-Mobile to deleverage, increase its
service and sales investment (fueling a virtuous cycle), and allowing
for the Sprint bid in 2018.
More customers and
more profit/customer
More profits for more
borrowing capacity.
The outcome is what T-
Mobile & Sprint argue is
the motivation for the
current merger and why
prices aren’t to rise

Market Share 2011 2012 2013 2014 2015 2016
Postpaid Phone
AT&T 32.7% 32.9% 32.4% 33.0% 31.7% 30.6%
Sprint 15.6% 13.8% 13.0% 12.1% 12.1% 12.4%
T-Mobile 10.5% 12.6% 13.4% 12.5% 14.0% 14.9%
Verizon 41.2% 40.7% 41.3% 42.4% 42.3% 42.2%
Total 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
3G to 4G: Product Transition
Upgrade rate accelerates due to 4G benefits over 3G
4G allows Verizon and T-Mobile to be share winners
Note: Service revenue likely strengthened ex. hurricane credits
Sprint, AT&T, and VZ all guided to higher ARPUs in ‘19.
Service Revenues 3Q17 4Q17 1Q18 2Q18 Q318 Q418
Adjusted Service revenue growth
AT&T Mobility -2.9% -2.5% -1.7% 0.2% 2.3% 2.9%
Sprint 2.5% 3.1% 4.6% 2.8% -0.5% -0.5%
T-Mobile 7.4% 7.3% 6.9% 6.5% 4.7% 6.6%
Verizon -5.1% -2.9% -0.7% 2.5% 2.9% 1.9%
Total -1.3% -0.3% 0.9% 2.5% 2.6% 2.7%
T-Mobile wins share in the value
market and due to improvements
in network and in Un-Carrier values
Verizon wins share in the premium
and business segment due to its
perceived superior network.
4G + iPhone was the step-change as they enabled the
mobile app ecosystem by allowing significantly faster
data speeds and capacity that foster a new ecosystem
and platforms—the smartphone app.
CTIA Wireless ReportAll rights reserved, Inflection Capital Management, LLC 12

5G is Tony Stark Toys for Everyone
5th-Generation is the latest wireless standard following 4G
 We are not going to opine about telemedicine, IoT, smart cities, autonomous vehicles and the like.
 Focus on the two things that consumer care about--latency and speed (especially in the context of cloud-based services).
 5G is going to allow processing and storage to move from the handset to the Cloud and the Edge.
 5G will allow phones/devices to have significantly less commentary and a longer/smaller battery which is less cost.
5G Features
Change
Speed 100 Mbit/s - 5G 10X
Latency 1 ms 50x
Battery Life >10X
Battery Life Inverted 10X Smaller
Better Coverage & Reliablity Better
Latency: Think Nextel’s Push-To-Talk service, think “boot-up” time when computers used to be turned off
when not used, or when one had to “dial up” to reach the internet
What is 5G Really?

5G
“Strong-Weak Signal”
“Fast-Slow Connection”
“Connected – Not
Connected to the Internet”
Pre-5G we have the following constructs in our head; they are
things that we consider and manage

15All rights reserved, Inflection Capital Management, LLC
5G

5G
Electricity

5G
Electricity-Like
Connectivity:
to the Web
to the Cloud
across nearly all devices

5G
 Less cost
 Less weight
 Less volume
Other Features
 10 second movie downloads
 Instantaneous content, page downloads and search results
 Instantaneous and life-like augmented reality
 Nextel-like Push-To-Talk voice-connectivity and real-time
language translation, think Babel Fish or C-3PO

5G
Little added
• volume
• weight
• cost
• Slim profile
• Less weight
• 3x battery life
• Lower cost
• More features

Real-time Translation
Your own Babel Fish
Real-time Traffic Navigation
Augmented Reality Integrated
into Smart Eyewear
Instantaneous subscription
music and video from the cloud
into the Smart Eyewear
Hands-free video
stored into the cloud
5G

Will 5G be priced at a premium?
 4G fueled massive demand for data and 5G is expected to accelerate the trend.
 The YoY absolute changes are enormous in ‘18
> 14X in data increase with 3G –> 4G, +88% YoY in Q4
Ericsson says
a 5.8X increase
for 5G

It’s complicated. Verizon has an early price of $10/mo. Our industry conversations have generally led to
confidence that there will more revenue from increased data usage, but we do not expect any real plan
price increases, or a 5G premium tier. Certainly, The Companies’ statement make it certain that they will not
charge a 5G premium. Verizon and AT&T will likely restrain themselves to not create a disadvantage. However,
what all three will do is bundle data intensive services and apps (gaming, SVOD, streaming music, etc.) that
push subscribers above throttling limits which incent users to upgrade their plans for more monthly data.
Already
marketing
5G Extremely limited
Hotspot data
We refer to Sprint and T-Mobile and
managements as “The Companies”

& More Pricing (+$5/mo)
Throttled
after 22 GB

As 5G incents subscribers to use more data, upgrades increase
We have created a hypothetical model to demonstrate how this usage-based mechanism may
work. The model is completely a WAG. We do not know if usage has a normal distribution or
what the standard deviation is. We have seen enough surveys to feel that 6 GB per month is a
reasonable baseline. We have also used a range of 3rd party estimates for our 53 GB average by
2023. However, as we don’t have access the authors’ models we would also characterize our
estimates for data usage to be a WAG.
Monthly Wireless Data Use (GB) increases w/ 5G
2018 2019 2020 2021 2022 2023
Avg Use 6 8 15 27 38 53
Est. Std Dev 8 10 12 14 17 20
% of Users < 22 98 92 72 36 17 6
% of Users < 35 2 8 28 59 59 39
% of Users < 50 0 0 0 5 24 55
‘21 Distribution of Monthly Data Users by Usage

Model implies annual ARPU increases of +HSD, or ~$4/mo.
Revenue for 5G to be driven by plan upgrades
Monthly Wireless Data Use (GB) increases w/ 5G
2018 2019 2020 2021 2022 2023
Avg Use 6 8 15 27 38 53
Est. Std Dev 8 10 12 14 17 20
% of Users < 22 98 92 72 36 17 6
% of Users < 35 2 8 28 59 59 39
% of Users < 50 0 0 0 5 24 55
Hypothetical Prices ARPU
< 22 GB $40 $40 $40 $40 $40 $40
< 35 GB $50 $50 $50 $50 $50 $50
< 50 GB $60 $60 $60 $60 $60 $60
Weighting
< 22 GB $39.20 $36.80 $28.80 $14.40 $6.80 $2.40
< 35 GB $1.00 $4.00 $14.00 $29.50 $29.50 $19.50
< 50 GB $0.00 $0.00 $0.00 $3.00 $14.40 $33.00
Weighted $40.20 $40.80 $42.80 $46.90 $50.70 $54.90
YoY % Ch 1% 5% 10% 8% 8%
We have applied our usage model to a hypothetical product model to demonstrate how the
usage increases could filter through into higher ARPUs and more revenue. Verizon and AT&T use
caps at 22 GB. T-Mobile uses a much higher 50 GB. Verizon’s and T-Mobile’s plan tiers are
$10/mo and $15 respectively; AT&T’s is $5/mo. The model below uses $10/mo, but this is a also
WAG. Obviously the companies know their customer elasticities and how to optimize the benefit
from packaging, trade-up, and mix.

5G & Wireless Industry
Three Use Cases Modeled
Use Case-1
Increased data consumption
leading to higher data-cap tiers
and $2.80/mo of added ARPU
Use Case-2
Connected accessories, pricing
levels already established with
iWatch and connected cars.
Use Case-3
This is wireline broadband
replacement using
neighborhood antennas.
Subscriber units are thousands; revenue and NOPAT is millions
No Iot, smart factories,
autonomous cars, drones,
Robotic surgery, etc. modeled
Year 2020
5G Mobile
Total Postpaid Wireless Sub Mkt 265,302
5G Phone Subscribers 9,500
Penetration 3.6%
ARPU lift $2.80
Revenue $210
NOPAT $133
5G Wireless Accessories
Penetration of 5G Subs 50.0%
5G Access Subscribers 3,500
ARPU $10.00
Revenue $300
NOPAT $237
Fixed Broadband
Total Broadband Subscribers Mkt 98,940
5G BB Subscribers 1,500
Penetration 1.5%
ARPU $50.00
Revenue $750
NOPAT $415

5G & Wireless Industry
Three Use Cases Modeled
Subscriber units are thousands; revenue and NOPAT is millions
Assuming penetration
gains slightly faster
than 4G
T-Mobile says 70% by
2023
Assuming the historic
precedent seen
elsewhere. Google
Fiber penetration was
75% of homes passed
Telcos are modeling
substantially more BB
subs than 17.4m
Year 2020 2021 2022 2023 2024
5G Mobile
Total Postpaid Wireless Sub Mkt 265,302 270,608 276,020 281,541 287,171
5G Phone Subscribers 9,500 27,061 62,105 112,616 143,586
Penetration 3.6% 10.0% 22.5% 40.0% 50.0%
ARPU lift $2.80 $6.90 $10.00 $10.00 $10.00
Revenue $210 $1,514 $5,350 $10,483 $15,372
NOPAT $133 $957 $3,381 $6,625 $9,715
Penetration of 5G Subs 50.0% 45.0% 40.5% 36.5% 32.8%
5G Access Subscribers 3,500 12,177 25,152 41,049 47,103
ARPU $10.00 $10.50 $11.03 $11.58 $12.16
Revenue $300 $988 $2,469 $4,598 $6,429
NOPAT $237 $780 $1,951 $3,633 $5,079
2021 2022 2023 2024
Fixed Broadband
Total Broadband Subscribers Mkt 98,940 100,919 102,937 104,996 107,096
5G BB Subscribers 1,500 5,000 10,000 15,000 17,442
Penetration 1.5% 5.0% 9.7% 14.3% 16.3%
ARPU $50.00 $50.00 $50.00 $50.00 $50.00
Revenue $750 $1,950 $4,500 $7,500 $9,733
NOPAT $415 $1,078 $2,489 $4,148 $5,382
ARPU lift capped at
$10/mo

Year 2020 2021 2022 2023 2024
5G Mobile
Total Postpaid Wireless Sub Mkt 265,302 270,608 276,020 281,541 287,171
5G Phone Subscribers 9,500 27,061 62,105 112,616 143,586
Penetration 3.6% 10.0% 22.5% 40.0% 50.0%
ARPU lift $2.80 $6.90 $10.00 $10.00 $10.00
Revenue $210 $1,514 $5,350 $10,483 $15,372
NOPAT $133 $957 $3,381 $6,625 $9,715
Penetration of 5G Subs 50.0% 45.0% 40.5% 36.5% 32.8%
5G Access Subscribers 3,500 12,177 25,152 41,049 47,103
ARPU $10.00 $10.50 $11.03 $11.58 $12.16
Revenue $300 $988 $2,469 $4,598 $6,429
NOPAT $237 $780 $1,951 $3,633 $5,079
2021 2022 2023 2024
Fixed Broadband
Total Broadband Subscribers Mkt 98,940 100,919 102,937 104,996 107,096
5G BB Subscribers 1,500 5,000 10,000 15,000 17,442
Penetration 1.5% 5.0% 9.7% 14.3% 16.3%
ARPU $50.00 $50.00 $50.00 $50.00 $50.00
Revenue $750 $1,950 $4,500 $7,500 $9,733
NOPAT $415 $1,078 $2,489 $4,148 $5,382
New Revenue Pools
Revenue $100 $200 $400 $800 $1,600
NOPAT $55 $111 $221 $442 $885
Total 5G Revenue $1,360 $4,651 $12,719 $23,381 $33,134
NOPAT $840 $2,926 $8,042 $14,848 $21,061
5G & Wireless Industry: $21B new profit pool in 2024
Other
applications.

Year 2020 2021 2022 2023 2024 CAGR
Industry
Total 5G Revenue $1,360 $4,651 $12,719 $23,381 $33,134
Total 5G NOPAT $840 $2,926 $8,042 $14,848 $21,061
23% share of 5G
Incremental Revenue $313 $1,070 $2,925 $5,378 $7,621
Incremental NOPAT $193 $673 $1,850 $3,415 $4,844
T-Mobile
Exisiting Bus Service Rev $32,160 $42,155 7%
Exisiting Business NOPAT $4,757 $8,755 16%
Esisting T-Mobile + 5G
Total Service Rev $32,473 $49,776 11%
Total NOPAT $4,950 $13,599 29%
T-Mobile 5G EBITDA $156 $546 $1,521 $2,850 $4,115
Margin Rate 50% 51% 52% 53% 54%
5G + T-Mobile-Stand Alone = Significant Lift to Growth & Profits
T-Mobile currently has a
17% share of post-paid
subs and 29% share of
service revenue.
4 pt lift to
revenue
growth
Stand-alone means that we are
looking at the impact of 5G on
T-Mobile’s economics independent
from any Sprint merger

Dec-19 Dec-20 Dec-21 Dec-22 Dec-23
Hitting Consensus
EBITDA-NTM $13,700 $14,600 $15,500 $16,200 $16,900
EV/EBITDA 6.5 x 6.5 x 6.5 x 6.5 x 6.5 x
Enterprise Value $89,050 $94,900 $100,750 $105,300 $109,850
Net Debt $26,212 $22,841 $18,919 $14,407 $9,679
FCF $4,494 $5,230 $6,016 $6,304 $6,704
Debt Paydown $3,371 $3,923 $4,512 $4,728 $5,028
Equity Value $62,839 $72,059 $81,832 $90,894 $100,172
per Share $72 $83 $94 $104 $115
6.5X & 5G Dec-19 Dec-20 Dec-21 Dec-22 Dec-23
5G EBITDA NTM $546 $1,521 $2,850 $4,115
Total NTM $13,700 $15,146 $17,021 $19,050 $21,015
EV/EBITDA 6.5 x 6.5 x 6.5 x 6.5 x 6.5 x
Net Debt $26,212 $22,841 $18,595 $13,182 $6,765
FCF $4,494 $5,661 $7,218 $8,556 $9,955
Debt Paydown $3,371 $4,246 $5,413 $6,417 $7,466
Equity Value $62,839 $75,605 $92,043 $110,644 $129,834
per Share $72 $87 $106 $127 $149
8.5X & 5G Dec-19 Dec-20 Dec-21 Dec-22 Dec-23
5G EBITDA NTM $546 $1,521 $2,850 $4,115
Total NTM $13,700 $15,146 $17,021 $19,050 $21,015
EV/EBITDA 8.5 x 8.5 x 8.5 x 8.5 x 8.5 x
Net Debt $26,212 $22,841 $18,595 $13,182 $6,765
FCF $4,494 $5,661 $7,218 $8,556 $9,955
Debt Paydown $3,371 $4,246 $5,413 $6,417 $7,466
Equity Value $90,239 $105,897 $126,085 $148,745 $171,864
per Share $104 $122 $145 $171 $198
T-Mobile Stand-Alone Valuation
& Longer-term Price Targets
 Here we lay out the first three valuation
cases that were shown at the introduction
(the green circles)
 75% of the free-cash-flow (FCF) is put into
deleveraging. Using the resulting debt and
holding the multiple, yields a rising equity
value driven by the EBITDA growth.
 The 5G scenario results in more EBITDA to
deleverage faster. The 8.5X valuation vs.
6.5X amplifies the equity value.
 8.5X is more appropriate given faster growth
and a larger TAM.
 The 2022 to 2023 equity value increase of
$23B compares significantly to TMUS’ current
equity value of $65B.
$10B in FCF/yr
compares to current
debt of $26B and a
market cap of $63B
Prices as of 5.23.19 All rights reserved, Inflection Capital Management, LLC 30

Convergence Redefined
“Netflix On Us” offer estimated to be 10% of Netflix’s US base
 In September ‘17 T-Mobile announced “Netflix On Us” which is a benefit for 2-line (& other) subscribers of no
Netflix bill, i.e. Netflix will cover your T-Mobile subscription. At Netflix’s current price of $13/mo (2-streams), this is
a substantial subscriber benefit as it represents an 11% benefit/discount to the mobile subscription.
 T-Mobile pays Netflix a discounted wholesale price (~10-30% lower). Netflix accepts the discount/wholesale
price because it benefits from no customer billing costs, no bad debt, and a lower cancelation (churn) rate.
 Since then, AT&T included HBO and Sprint included Hulu.
 Based upon T-Mobile’s management’s enthusiasm for the Netflix partnership, the prominence of the offer on
T-Mobile’s marketing and website store, and our analysis of disclosed figures, the offer is very popular.
 We estimate that there are now 5.6m T-Mobile customer on the Netflix offer which is ~10% of Netflix’s
domestic subscribers. Moreover, the offer contributes ~17% of Netflix’s new subs each quarter.
Q4'17 Q4'18 Q1'19
TMUS Postpaid Phone Subsribers: Avg. 33,669 36,714 37,224
Estimated new Neflix Subsribers YoY 800 2,400 2,400
Estimated Wholesale Price $8.99 $9.90 $9.90
Estimated Contra-Revenue--Annualized $43 $143 $143
Calculated ARPU Impact $0.11 $0.32 $0.32
Reported ARPU Impact $0.11 $0.32 $0.32
Estimated Total Neflix Subscribers 800 3,200 5,600
on TMUS' plan
Netflix Domestic Paid Subs: EOP 52,810 58,486 58,486
TMUS's Share 2% 5% 10%
Est. Netflix Gross Domestic Adds 13,800 13,800
% from TMUS 17% 17%
2-Lines
Netflix marked on all
T-Mobile merchandising

5G holds another transformative opportunity—
To become a Platform Company
 Two dynamics are at work,
one is the speed and response that 5G provides, the second is convergence.
 Speed & response as noted previously will magnify the demand for cloud services and storage, but also for
what is called “mobile edge-computing” (MEC). It is imaginable, that the carriers not only compete with
price, packaging, and network coverage and capacity, but also with what the network can do in terms of
computing performance and applications.
 Convergence between voice, data, video is happening at a very fast pace and scale (AT&T acquirng Time
Warner). It is also happening with payments, music, and other services. Over time, the carriers are going to
come head-to-head with Apple and Google over “who owns” the customer, who accrues the majority of
the customer’s life-time-value, and who gets the distribution revenue. In the case of T-Mobile’s “Netflix on
us,” if the subscriber had previously come to Netflix via. the Apple App Store, Netflix was paying 15% or
$2/mo to Apple. With “on us,” Netflix pays Apple nothing (T-Mobile also pays nothing to Apple).
 The merger is strategically very important to T-Mobile and Sprint as it produces more scale to
create the above mentioned edge-computing and network differentiation vs. Verizon and AT&T.
It also gives them greater heft in negotiations with content providers (Netflix and Spotify), other
service providers (banking, etc.) and with Apple and Google.
 The more the investment in 5G edge-compute hardware and backhaul, the superior the consumer
experience will be. The T-Mobile and Sprint merger via network, spectrum, and expense synergies allow for
a far more significant investment. One that creates a 5G service that would be far superior to what T-Mobile
alone could bring to market and at a faster pace. A superior service by T-Mobile/Sprint would incent AT&T
and Verizon to elevate their network investment intensity and pace from the status quo.
 A superior 5G network will also give more leverage to the wireless operators in their relationships with
adjacent tech and media titans. That leverage should exhibit itself in a broader distribution of new revenue
and economics. As the competitive intensity between the operators will remain high, some of those
economics will flow to the consumer as we have seen with bundled OTT video.

15-30% of the
economics
go to
Current circle of
economics for operators
Existing Network Architecture and Services Ecosystem

Mobile Edge
Computing
added in 5G
5G Demands Added Element of Edge Servers

Storage &
Processing
Economics
5G app
economics
shared
Edge Servers Allow for Disrupting the Economics
 A share of cloud storage and processing will move to MEC servers owned by the operators, as such the
operators should get these economics. This IS NOT TO IMPLY that work loads move to the MECs to the detriment
of AWS, etc. It is that the MECs and 5G create additional demand because of the Edges’ better response.
 Should the operators offer a differentiated network that adds value, they should be able to capture some of
the value from new apps and bundled entertainment and subscription services into their monthly fee.
 As the operators bundle entertainment and gain some leverage on IOS and Android, it is conceivable that
they are able to build targeted advertising business that also have local relevancy. This would serve to pick off
some of Google, Bing, and Facebook revenue.

2024 Platform Economics
 We have made WAG estimates for each of
the existing and tangible markets from
which the operators should be able to
capture increased economics.
 We assume that The New T-Mobile captures
a third of each of the new markets.
 In total, these could exceed $7B in revenue
for The New T-Mobile which at 70% margins is
worth $33/sh in 2024, or $27/sh at year-end
2020 using an 11% discount rate.
billions 2019 2024 Assumption
Cloud
Big-3 Cloud Revenue $52 $159 25% CAGR
% NA 60% 50%
Big-3 $ NA $31 $79
Wireless Operator Penetration 0% 10% WAG
T-Mobile of Wireless 33%
T-Mobile $ NA $0 $2.6
Mobile Apps
US App Revenue $20 $40 AppAnnie
OS Split 20% 20%
Entertainment Subscriptions $110 $119 PwC
Advertising $224 $253 Morgan Stanley
Wireless Operator Penetration 0% 2.5% WAG
Total Platorm Economics
for T-Mobile $7.2
The New T-Mobile is T-Mobile’s term for
the merged T-Mobile and Sprint entity.
Plateform TAMS

The Regulators: T-Mobile + Sprint Helps Promote the FCC’s Goals
The FCC’s four primary strategic goals are:
1) Closing the Digital Divide: Develop a regulatory environment to encourage the private sector to
build, maintain, and upgrade next-generations networks so that the benefits ….are available to
all Americans.
2) Promoting Innovation: Foster a competitive, dynamic...through policies that promote the
introduction of new technologies and services…and remove barriers to…investment.
3) Protecting Consumers & Public Safety
4) Reforming the FCC’s Processes
 Approving the merger with conditions on rural service delivers on (1) and (2) expeditiously and
with a magnitude that would not happen otherwise.
How:
 The merger would foster a deeper investment in rural and underserved markets both though the
existing commitments by T-Mobile management to do so and by making a requirement for approval.
 The New T-Mobile is promising $15B in added network investment funding by merger synergies. An
investment that would not happen otherwise.
 A more competitive 5G market between Verizon, AT&T, and the New T-Mobile would result in more
services (edge compute) and platforms than would exist otherwise. That in turn would foster the
introduction of new technologies and services and lower the entry costs for innovators to come
aboard these network platforms.
On May 20th the
FCC Chairman Ajit
Pai announced
that he supported
the merger

T-Mobile + Sprint Helps Resolve Acute Public Service Deficiencies
 Proposed T-Mobile and Sprint merger intimately intertwined with 5G: The merger allows the companies a
5G network that is NATIONWIDE and ROBUST.
How:
 Commingled spectrum assets allow for the national coverage and the capacity for 5G capacity & speeds.
 $4B in savings from the network resulting from fewer antennas and lower payments for rents & carriage.
 Sharing network allows capacity to be allocated to 5G while at the same time supporting LTE capacity.
 The merger (Merger) facilitates faster and 5G deploy nationwide significantly earlier than AT&T and
Verizon. Merger raises the industry’s competitive intensity leading to better 5G networks and service.
How:
 Sharing network allows capacity to be allocated to 5G while at the same time supporting LTE coverage.
 $1B in savings from marketing and $1B from back office allows for more upfront investment in 5G network.
 New T-Mobile is promising 96m people covered with 300 mbps service by 2021 vs. w/o merger. With
approval AT&T and Verizon would have to materially step up their investment pace to match.
 As present, AT&T and Verizon have indicated no step-up in spend. New T-Mobile has promised $15B in
adding spending, to be funded by the merger synergies. An approval would change AT&T and Verizon’s
spending plans—more and faster.
 Merger allows T-Mobile the credibility to argue that the merger will allow them to bring 240 Mbps speeds
to the underserved--the 50% of US HH that have only one broadband (BB) option and the 10% w/o any
BB; to narrow the Digital Divide.
 5G is a material risk for further widening the gap. This is because without the merger, metro communities
will get 5G service and capacity first. Rural communities will be get the service last with less MEC and
backhaul investment and far after the 5G ecosystem is paying dividends to metro residents.

Current Digital Divide
Source: FCC 2018 Broadband Deployment Report
Only 58% of lowest 20% in
HHs income are served
by incumbent wireline BB
84% of the highest 20% in
Divide
Only 53% of the 20% most
rural HHs are served by
incumbent wireline BB
92% of the 20% least rural
Divide
Why? Cost to serve significantly higher, lower service take-up
because of lower incomes
In both circumstances the wireless industry has been a better
service provider than the wireline industry.
20m “Broadband” homes
are still service with
copper DSL wires.
39

T-Mobile’s June 2018 Public Interest Statement on Merger
40

Public Interest Statement (PIS)
Speed & Capacity Enhancement
2021 & 2024
Merger vs. No-Merger
The area between the black line
and stand-alone lines represents
the improved public utility/value
of the merger to the nation
41

Public Interest Statement (PIS): Speed & Capacity Enhancement
3X Capacity improvement calculation:
Network Capacity = # of Cell Sites x Spectrum per Site x Spectral Efficiency
The New T-Mobile vs. T-Mobile & Sprint as stand-alones
79K T-Mobile sites + 11K Sprint sites vs. Separate
Urban High-band + 2.5 GHz + 600 MHz vs. Separate
More deployed to 5G is MORE spectrum vs. Spectrum shared to serve existing 4G
Throughput is the quantity
of data transferred per unit
of time
For sake of comparison, T-Mobile on its own without Sprint’s cell sites and spectrum would
need to have 162K sites in place to reach equivalent capacity. That is not likely to happen.
1
1
2 3
2
3
The take-way here is
that there is no
comparable
mechanism to
create this much
coverage, capacity
and social value. Its
just physics.
Allrightsreserved,InflectionCapitalManagement,LLC
42

Sprint Stand Alone Option: Best case scenario (now in doubt 12 months later)
 ~$5.5B in network cap ex/yr in ‘18-20 focused on densifying and optimizing metro and suburban areas and
deploying equipment to eventually launch 5G in its top markets. NO EXPANSION of coverage is contemplated.
Sprint invests in metro markets where it can win in QoS consumer affinity.
 While Sprint’s 4G LTE network covers 302m POPS, only 133m are covered with 5G compatible spectrum and cell
sites. Sprint’s 5G plans only envision covering 150m POPs, with commercially competitive service less than that.
 Because of Sprint’s limited geographic footprint, its more reliance on roaming arrangements, particularly in
rural areas that relegates these regions with low business economics and poor QoS means that Sprint will never
market to these populations.
 Sprint intends to launch 5G on its 2.5 GHz spectrum and maintain its other networks on its 800 MHz and 1.9 GHz.
Sprint also states that its 5G network will have substantial coverage gaps within a covered area due to 2.5
limitations. The 800 MHz could resolve those, but its incumbered by 4G.
 Sprint also does not have the financial capacity to green-field build in these regions. Consequently, it will not
use the attractive/highest speed 2.5 GHz spectrum in these regions.
2.5 GHz
43

The New T-Mobile Option: Combine spectrum, cell networks, & split cells
600 MHz
2.5 GHz
600 MHz
2.5 GHz
High-Band
> 20 GHz
600 MHz
2.5 GHz
High-Band
> 20 GHz
MHz = capacity/site
2.5 GHz is 4X more
capacity per cell site
vs. 600 MHz site.
More capacity is
needed per site as
population density rises
4 mile
service radi
1/2 mile
service radi
18 mile
service radi
High penetration:
rain, leaves,
windows, and walls
Low penetration:
windows and walls
44

T-Mobile + Sprint = More Network Investment
~$5B/year in increased 5G Network investment vs. stand-alones
~$6B/year in savings, Re-invested in Near-Term
billions 2019 2020 2021 Total
Sprint
5G $3.6 $3.6 $3.6 $10.8
T-Mobile
5G $4.3 $4.3 $4.3 $12.9
New T-Mobile
5G $14.0 $12.0 $13.0 $39.0
Difference $6.1 $4.1 $5.1 $15.3
 The Companies’ Public Interest Statement
(PIS) states that because of the network’s
spectrum synergies and higher investment
that more subscribers will have 5G than
otherwise.
 We have pulled apart the companies’
statements and the PIS to analyze the level of
increased investment. This shows that New T-
Mobile intends to spend $15B, or 64% more
than the stand-alones during the next three
years.
 There is no reason to believe that the level of
investment in ‘22 – ’24 would not be of a
similarly higher level. All total that’s $30B in
more investment.
 Assuming that competition demands the
same from AT&T and Verizon, that’s $90B in
additional 5G network investments. That’s a
$90B better national 5G wireless network than
the status quo.
 Assuming a 5X multiplier (WAG) of economic
benefit from this investment, that’s $450B in
added economic growth than the status quo.
 Moreover, we expect Sprint as a stand-alone
to actually retrench and lower its investment
from these stated targets as we detail
subsequently.
 We suspect that the FCC shares these views
and that is why it supports the merger. It wants
more capital investment in the nation’s
communication networks, not less.

T-Mobile + Sprint = National Coverage
 $15B in additional network investment (cell sites, density, etc.) over 3 years, or 60% more than what the stand
alone companies intend to spend, to be funded by network and back-office synergies.
 This added investment, plus spectrum synergies will allow The New T-Mobile to have better indoor coverage than
the stand alone companies.
 Also, in terms the network cost it is important to understand that while tower companies lease their space on their
towers, it’s the operators that need to provision for the power, backhaul, and cell sites. Leases are based upon
square inches of space. Power and backhaul have price breaks based upon volume. Less cost in one coverage
area for the New T-Mobile equates to more investment in coverage and capacity elsewhere.
 While communities want coverage, nobody want’s the tower and cables in their backyard; thus, there is a
scarcity value to these assets and community efficiencies and environmental benefits.
 Customer satisfaction = coverage & signal strength; Signal strength = strength + consistency of strength
46

More 5G Coverage = More 5G Subscribers
 The Companies’ PIS states that because of the network’s spectrum synergies and higher investment
that more subscribers will have 5G than otherwise.
 The 10% lift is the result of more market share of subscribers (+5.2m) and higher 5G penetration. The only
way that The Companies can count on more market share is if the merger allows them to offer more
consumer value than otherwise, which is consistent with management’s public statements.
49

Regulatory Considerations: DOJ
The DOJ will be concerned about the merger’s impact on competition and the associated impact on overall
wireless service coverage & quality and consumer prices.
Perspective:
 The White House is rumored to be in favor of the merger.
 The DOJ has stated that it has no pre-conceived views about three vs. four competitors.
 U.S. Attorney General Bar has recused himself from the Justice Department's deliberations.
 Assistant Attorney General of the Antitrust Division Makan Delrahim, the White House’s appointed
Division leader, has said that he has no pre-conceived opinions on the merger. However, he is known to
want structural remedies, not behavioral remedies, for granting approval (i.e. selling the pre-paid
business vs. promises to not raise prices.)
 The DOJ staff has been rumored to be against the merger from the start on the belief that they
prevented AT&T from acquiring T-Mobile in ‘12 and that lead to substantial price competition and
consumer benefits. DOJ staff are also rumored to hold a conventional, or strict view of how the market
is to be defined.
On May 20th the FCC
Chairman Ajit Pai announced
that he supported the merger

Regulatory Considerations: DOJ
Competitive intensity is typically measure by the HHI index. Industries with HHI’s above 2500 are characterized
as “relatively” concentrated. Mergers that increase an industry’s HHI by over 200 pts are expected to attract
more regulatory scrutiny and objection.
Perspective:
The wireless industry when conventionally defined has an HHI of 2615. The merger as introduced would increase the
index by nearly 500 pts to 3104 and into the range characterized as “highly concentrated.”
Wireless Connections
(million) YE-2021 Mkt Sh ^ 2 YE-2021 Mkt Sh ^ 2
AT&T 150.3 33.5% 1119 150.3 33.5% 1119
Verizon (incl. 15.6m MVNO) 137.7 30.7% 940 137.7 30.7% 940
T-Mobile 89.7 20.0% 399 144.7 32.2% 1038
Sprint 55.0 12.2% 150 0.0 0.0% 0
US Wireless 5.2 1.2% 1 5.2 1.2% 1
Other 11.3 2.5% 6 11.3 2.5% 6
Total 449.2 100.0% 2615 449.2 100.0% 3104
Change 489
Source: FactSet 11.1.18 & FCC competition report (397m connections + 2.5% annual growth)
HHI for Market as Conventionally Defined

DOJ HHI Index Calculations
Should The Companies say they are willing to spin their pre-paid business, then the HHI is nearly
undisturbed by the merger. This will be The Companies’ regulatory path.
HHI Index for SpinCo of the Prepaid Business
Phone Connections
(million) YE-2021 Mkt Sh ^ 2 YE-2021 Mkt Sh ^ 2
AT&T 79.4 23.9% 571 79.4 24.6% 606
Verizon 94.1 28.3% 803 94.1 29.2% 852
T-Mobile (ICM) 75.4 22.7% 515 71.7 22.2% 494
Sprint (ICM) 36.0 10.8% 117 0.0% 0
TracFone 23.0 6.9% 48 23.0 7.1% 51
Other MVNO 13.0 3.9% 15 13.0 4.0% 16
Pre-Paid Spin-Co 30.0 9.3% 87
US Wireless 5.2 1.6% 2 5.2 1.6% 3
CMCSA (MS est.) 5.0 1.5% 2 5.0 1.5% 2
CHTR (GS est.) 1.1 0.3% 0 1.1 0.3% 0
Total 332.2 100.0% 2075 322.5 100.0% 2111
Change 36
The May 20th FCC leaderships’ support for the merge is conditional upon The Companies divesting the Sprint pre-
paid business. We suspect that this was The Companies initial offer and that they will eventually spin the entire pre-
paid business to meet the DOJ part way.

Regulatory Considerations Continued
The DOJ will be concerned about the consolidation’s impact on competition and the associated impact on
overall wireless service coverage & quality and consumer prices.
Perspective:
 The Public Interest Statement addresses service coverage and quality and these shouldn’t be objections.
That leaves “price.” The Companies argue that The New T-Mobile has significant economic incentive to
lower prices to fill its substantial increase in capacity by taking substantial market share. Moreover, the
companies argue that Sprint is an ineffective competitor and that its business is fragile and not durable in
the longer-term. As such, the Companies imply that the current four competitor situation is not sustainable
and that it will not be a longer-term governor of prices. Moreover, T-Mobile points to its long-term practices
of un-carrier moves and its disruption on industry prices. It argues that should it act otherwise that it would
severally damage its brand and consumer trust.
 We think that the capacity argument lacks historical precedent and is such, it is unlikely to not be an
effective argument for approval.
 We believe that the DOJ is unlikely to be swayed by the Sprint fragility argument because that would require
taking a speculative view, something that the DOJ is unlikely to do.
 This is unfortunate because even if Sprint were to re-capitalize, it would not have the assets to sustainably
grow profits. In addition, Sprint has had negative free-cash-flow for the past five years and there is no
discernable improvement recently. Moreover, the industry’s capital intensity is rising, not falling. Therefore,
there is no logical argument to be made that Sprint stand-alone will have any influence on industry pricing
for most consumers in the medium- to long-term.
 Sprint can concentrate its resources (which it says it will do), but that will result in the only selective benefits of
4-player competition. Those selected benefits will be more affluent- and metro-markets. That’s sad.

Wireless Prices
What is the price for wireless service?”
Perspective:
 It is not CPI, because the consumer expects “unlimited” data, or units of consumption. CPI is more of a measure of
the increased value that consumers are receiving. ARPU (average revenue per user) is likely the better measure
because that is what the consumer experiences and budgets monthly.
 T-Mobile’s ARPU trend is distinctly downward (as it is for the other carriers) despite better coverage, speed, app
services, and more data consumption. This is what being the Un-carrier was all about.
 The industry has experienced improved consumer sentiment (seen on the next slide) as the consumer has noticed
that it is getting “more for less.” This improved sentiment has also coincided with an industry-wide decline in churn
rates, declining customer acquisition costs, and handset subsidy costs, all of which have other economic benefits.
 The wireless industry’s improvement contrasts to the downward trend exhibited for the ISPs and paid-TV industries.
This deviation in consumer sentiment is what opens the opportunity for the wireless industry to encroach upon these
two adjacent markets. Given network and scale economics, there is more long-term value creation if a wireless
operator can make $5/mo in gross profits being the primary broadband provider and $5/mo being the paid-TV
provider, than raising wireless prices by $10. Serving these adjacencies require little in added customer care,
marketing, or billing costs, but there is a substantial benefit of lower wireless churn.
US Wireless CPI -3.2%/year per Census BureauT-Mobile ARPU ‘10 to ‘18 down despite more data usage
54

Consumer Satisfaction: Wireless up, Wireline down
55

T-Mobile and Price
If T-Mobile were to raise price, not consistently increase the consumer value, and not act as a disrupter,
it would severally damage its brand and consumer trust.
Perspective:
 This consideration is the strongest argument for why the New T-Mobile will continue to be disruptor and
competitive deterrent to higher prices. (From press reports we know that DOJ staff are not giving weight to
this argument. However, we suspect that the Administration and Delrehim may be swayed.)
 Examples of strong brands that lost their customers’ trust include Samsung, eBay, and Chipotle, from which
they never recovered their prior mojo. Consumer trust is now one of the most tenuous but powerful assets as
Airbnb, Netflix, Costco, and Amazon have demonstrated. High trust is what allows companies to cross sell
more services and why customers remain loyal. Given the wireless industry’s high customer acquisition cost,
churn is the significant metric for customer LTV and an operator’s terminal value. As such, it would be self-
detrimental and value destructive for The New T-Mobile to do anything that detracted from consumer trust
and that increased churn.
 T-Mobile has built a brand and business model based upon giving the consumer more flexibility and value.
Should T-Mobile invert and give the customer less value (via price vs. service) by soft-following Verizon and
AT&T package prices higher, the consumer would know and revolt. This behavior can be tested in consumer
surveys and academic research show that price elasticity in wireless service exceeds -0.5 and the value-tier
exceeds -1.0. Prices rise and churn increases. Prices remain stable and churn falls. The industry’s opportunity
for revenue growth is to sell more volume, not to sell for more price.
 Unfortunately, T-Mobile has damaged this argument recently by “promising to not raise prices for three
years” if the deal were to be approved. T-Mobile should have made the argument that consumers would
not allow them to raise prices and provided the evidence. By declaring that it “promised to not…” suggests
that it would be possible for them to do so.
T-Mobile will not raise prices

Sprint Stand-alone: Looks Bad, but not catastrophic
 The following estimates for Sprint are as a stand-alone where they pull back from the national markets to concentrate
their 5G investment in affluent- and metro-markets. At that point, they begin to loose significant subscriber share.
 We do not envision positive free-cash-flow (FCF) during this time horizon due to Sprint’s scope and capital limitations.
 That said, our FCF estimates are rough given that cap-ex is a large component and we have no insight as to their
plans under more stressed conditions will be. Management’s current statement is $5-6B/yr through 2020.
 Sprint may have spectrum or other asset to divest (Boost) that could help lower its debt levels.
subs in thousands, dollars in millions 2016 2017 2018 2019E 2020E 2021E 2022E 2023E
Postpaid Subs 31,694 31,942 32,605 30,722 26,879 21,902 18,327 17,689
Postpaid PhoneChurn 1.5% 1.6% 1.7% 1.7% 1.9% 2.2% 2.1% 2.0%
Wireless Service Revenue 24,218 22,736 21,980 22,131 20,575 18,027 15,478 14,328
(-) Cost of Service (7,148) (5,748) (5,735) (5,710) (5,341) (4,993) (4,609) (4,551)
(-) SG&A (7,665) (7,779) (7,285) (6,876) (6,270) (5,470) (4,714) (4,344)
(+/-) Other (518) (342) (606) (400) (300) (200) (100) 0
10% of industry 5G economics 68 233 636 1,169
Cash EBITDA from Wireless Services 8,887 8,867 8,354 9,145 8,731 7,597 6,691 6,601
% of Wireless Service Revenue 36.7% 39.0% 38.0% 41.3% 42.4% 42.1% 43.2% 46.1%
Net Cash Flow from Equipment Sales and Leasing (4,931) (5,011) (2,299) (1,043) (912) (743) (622) (600)
% Growth -5.2% 1.6% -54.1% -54.6% -12.5% -18.5% -16.3% -3.5%
Cash EBITDA from Wireless Services 8,887 8,867 8,354 9,145 8,731 7,597 6,691 6,601
Net Cash Flow from Equipment Sales and Leasing (4,931) (5,011) (2,299) (1,043) (912) (743) (622) (600)
Net Cash Flow from Wireless Operations 3,956 3,856 6,055 8,102 7,819 6,854 6,069 6,001
(-) Net Interest Expense (2,395) (2,385) (2,471) (2,599) (2,663) (2,620) (2,588) (2,565)
(-) Cash Taxes, Net of Refunds 0 0 0 0 0 0 0 0
(+/-) Other 1,671 2,863 200 0 0 0 0 0
Cash Operating Income 3,342 4,293 3,658 5,432 5,092 4,176 3,426 3,383
(-) Cash Capex on Network (2,212) (3,157) (4,762) (6,020) (5,300) (4,500) (4,250) (4,000)
Adjusted Free Cash Flow 1,130 1,136 (1,104) (588) (208) (324) (824) (617)
Cash $6,868 $6,280 $6,072 $5,748 $4,924 $4,307.11
Debt $39,884 $39,884 $39,884 $39,884 $39,884 $39,884
Net Debt $33,016 $33,604 $33,812 $34,136 $34,960 $35,577
Net Debt / EBITDA 4.0x 3.7x 3.9x 4.5x 5.2x 5.4x
Allrightsreserved,InflectionCapitalManagement,LLC
57

Regulatory Considerations: The States
 The Companies have secured all of the necessary state PUC approvals, save California and New York. California is
suspected of leaning towards approval. New York is rumored to be looking for “benefits.”
 State AG’s could sue to oppose the merger both on state and federal levels; however, to appose the DOJ would
be unusual. Clearly these are unusual and highly political times. New York and California AGs have particularly
been outspoken. Alabama, Massachusetts, Mississippi, and five others states also say that they are still reviewing.
 For a state AG to contradict the DOJ it generally requires that there be state specific concern that the DOJ failed
to address. That bar seems to set a high threshold for state AGs in this circumstance. Jobs and network coverage
gaps would be two likely focal points of these AG. Interestingly, The Companies have that they are going to create
five new customer service centers post merger. Two locations are New York and Kansas, the other three are to be
named.

Regulatory Considerations: The Pre-paid Market
 The DOJ and FCC will be concerned about the merger’s impact on the pre-paid market which serves low-
income HHs. In the prior slide we show how a spin of The Companies’ pre-paid business (Spin-Co) would
favorably impact the HHI such that the resulting industry structure has no increase in the HHI.
 Should there by no increase in the HHI, can there be any regulatory opposition to the deal? We suspect not.
However, regulators would be concerned in this scenario about the financial robustness in Spin-Co and its
ability to bring 5G to lower-income HHs. Given the scale economics of the network business, there may be a
quid pro quo available to The Companies and regulators in the form of service agreement between the
Companies and Spin-Co with The Companies being a wholesaler to Spin-Co. The price of the service for Spin-
Co would be set at a level that allows The Companies to only recover their cost of capital.
 Spin-Co would take the Metro brand and retail locations. Effectively this would be a reverse of the 2012 Metro
PCS merger. Additionally, Spin-Cp would be responsible for the network equipment in some of its service areas
with The Companies providing the spectrum, the technical expertise, and the nationwide network. This would
make the consistency of coverage Spin-Co’s responsibility and relieve the regulators of enforcing any
behavioral remedies.
 The remaining concern for regulators would be the financial strength of Spin-Co and its ability to properly
serve the pre-paid market in the long-term. As a condition of the merger, Spin-Co would have no debt and
sufficient cash to invest in its service areas network, and equivalent terms to The Companies’ network for
national coverage (i.e. Spin-Co customers receive the same speed and coverage as The Companies’
customers).

Regulatory Considerations: The Rural Market
 Given the noted lapses in rural coverage and the generally poorer quality of coverage, and the FCC’s
priorities, the merger’s affect on rural areas will be especially scrutinized.
 Given Sprint’s current service gaps in rural market, the absence of Sprint would have little impact on
these markets. To the contrast, The New T-Mobile would have more financial capacity to improve service
coverage and quality, as has been promised by The Companies.
 Merger critics point to Frontier Communications’ failure to maintain and extend rural coverage as an
example of failed promises to regulators and communities. However, Frontier is not a comparable
company to The New T-Mobile as Frontier is a financially stressed company that aggressively curtails
spending in order to cover its high level of debt costs. Moreover, Frontier is stressed with supporting a
more capital intensive broadband service vs. The New T-Mobile plans to utilized low-band spectrum and
new 5G solutions.
 Additionally, as shown previously the wireless industry has historically been a better service provider to the
rural market than the wireline industry. Given that what the industry has already done, if the merger
improves the financial resources for one of the rural wireless network providers (T-Mobile), that should yield
better service by that provider than would otherwise be the case.
 Other merger critics point to the merger’s impact on the wholesale market and rural MVNO carriers
arguing that the absence of Sprint would allow the remaining network companies to disadvantage them
by raising prices. However, this argument lacks substance given that Sprint doesn’t have significant rural
coverage. Moreover, just the inverse could happen as The New T-Mobile increased the quality and
coverage of rural areas would likely incent Verizon and AT&T to do so similarly. Increased capacity by all
three carriers would have a deflationary impact on wholesales prices in these rural markets.

The Rural Market Coverage Example: Bismarck, North Dakota
Limited Coverage by Sprint. AT&T and Verizon Full Coverage
 Implication is that for residents of Bismarck there are only two service providers
and choices, not four.
 The Merger would increase the competition to three from two in Bismarck
61

Regulatory Considerations: Broadband
 5G allows a new broadband technology for home broadband called “fixed wireless”. This is akin to
longer-distance Wi-Fi with the receiving home antenna placed in a window facing the 5G radio.
 The New T-Mobile thinks that it can get 9.5m 5G fixed wireless subscribers by the end of 2024. It plans to
charge $50/mo for the service. AT&T and Verizon also have 5G fixed wireless plans as well. Verizon and
AT&T have begun test markets and there is no reason to believe that their gains should be substantially
less than The New T-Mobile.
 Part of The Companies’ regulatory argument for the merger is that it will allow for savings and scale to
bring broadband competition to the “cable monopoly,” and thus foster benefits for the consumer by
adding choice, lowering prices, and bringing new access to underserved markets.
 The Companies’ aim is to appeal to regulator’s guilt about the competitive concentration in wireline
broadband and the high level of pricing that that industry now enjoys.
 However, it is unclear to us why the 5G fixed wireless service is contingent upon the deal, other than the
deal allows for savings that could be re-deployed into new products such as fixed wireless. However, if it
was such a great product with great economics, wouldn’t T-Mobile launch it without consideration to the
merger? T-Mobile has the financial capacity to increase investments on NPV-positive projects.

The FCC Leadership Embraces the Deal: The Administration will as well
2025
2025
All dates and percentages allow for additional commitments to the
DOJ/Administration for granting approval. They are setting up for Trump
to declare another victory for Americans, especially rural Americans
63
The FCC’s Terms

2025
 All dates and percentages and these figures also allow for additional commitments to the DOJ/Administration for
granting approval.
 A successful approval would also be a blow to AT&T as it would need to accelerate its 5G investment. That would be
painful as it has promised Wall Street that it will restrain its cap-ex and delever its balance sheet from the debt that it
assumed when acquiring Time Warner. Should AT&T not delever, its stock price will fall and that would be a big
emotional win for Trump after the brawl over Time Warner. Thus, we suspect that the Administration really really wants
this deal approved as it would see AT&T hung by its own rope (the Time Warner deal debt).
~7-8m subscribers vs. industry total of ~100m
Prices could actually fall along with costs; however, as
the amount of total data consumed runs higher,
consumers will self elect to go into higher prices plans.
64
The FCC Leadership Embraces the Deal: The Administration will as well

Merger Financial Synergies
 Shown below is The Companies’ slide on the projected cost synergies. Of the $6B/year total, $4B of that comes
from lower expense to tower companies, equipment providers, and back-hall providers. $1B comes out of
marketing and competing retail stores. The final $1B comes from redundant IT, billing, and corporate spend. The
$43B NPV figure incorporates an 8% WACC.
 We have no basis to challenge any of these projections. Moreover, T-Mobile was able to exceed its synergy
target with MetroPCS by 40%. (T-Mobile’s management guides to exceed.) Consequently, we provide a
second scenario of higher synergies of $8.5/year, which has an NPV of $69B.
 Currently, the $43B number compares to The Companies’ market cap of $105B, up $26B prior to the deal’s
announcement. Thus in simple terms, the stock market’s implied chance of deal approval is 50%.
TMUS+Sprint Synergies
Shares Pre Post
TMUS 862 862
Sprint 4011 411
Conversion Ratio 9.75
Total Shares 1,273
Stated Synergy $43,000
Modeled Synergy $68,800
Per Share $54
$8.5B in annual $76
synergies vs. $6B
Merger Synergy Value
65

Merger Spread  Shown below is the merger arb spread for the deal (TMUS – 9.75 S) / TMUS
 Given that the current spread of 10% is similar to prior to the deal, Wall Street has
effectively not changed its probability of approval since deal announcement.
 However, since the deal’s announcement T-Mobile’s business outlook has
strengthened; whereas, Sprint’s business outlook has eroded. Thus, the risk for an
arbitrager short TMUS and long S has substantially increased should the deal not be
approved. Thus, it is likely that there is less arbitrage pressure affecting the spread.
 To the opposite, we have heard that hedge fund investors
are long T-Mobile and short Sprint, on the premise that if
the deal is rejected, that Sprint’s stock will get crushed.

67
Conclusions:
 A confluence of circumstances created a transformative opportunity for T-Mobile to emerge as a significant
company and more disruptive brand on the behalf of the consumer.
 This is also a significant opportunity for the FCC, DOJ, and the Administration to increase the quality and
coverage of our national telecommunication system and to foster the economic benefits of 5G in a way that
otherwise would be impossible due to physics and economics. And without cost to the government and tax
payers.
 Particularly, this creates the opportunity to bring 5G and broadband into rural and underserved markets for
which there is no other more efficient and effective mechanism. The Merger can be leveraged to narrow the
digital-divide, as apposed to the digital-divide widening in the 5G transition.
 Given the Administration’s leanings and behavior during the past two years, we expect it to aggressively grasp
this opportunity to create a substantial win ahead of the 2020 Presidential election, especially as an appeal to
rural America.
 In this presentation, we have shown that the 5G opportunities are not elusive markets that need to be newly
created and that are years into the future. The consumer market potentials are very tangible and quantifiable.
High quality 5G is simply “electricity” like access to the internet and cloud services through existing and easy to
visualize new form factors.
 The largest risk to T-Mobile’s stock price is the entrance of Amazon into wireless services. For many reasons we
think that is a very low-probability event. Consequently, T-Mobile’s stock has a significantly favorable skew:
limited downside for the status-quo and >3X upside should everything go perfectly for them.
All rights reserved, Inflection Capital Management, LLC

EBITDA (Pre-ASC 606) 3Q17 4Q17 1Q18 2Q18 Q318 Q418
AT&T Mobility 7,341 6,302 6,837 7,312 7,349 7,141
Sprint 2,764 2,759 2,700 3,100 3,025 2,845
T-Mobile 2,941 2,596 2,897 3,019 2,965 2,901
Verizon 9,969 9,462 10,115 10,295 10,633 9,831
Total 23,015 21,119 22,549 23,726 23,972 22,718
YoY % Ch 3% 4% 3% 3% 4% 8%
thousands 3Q17 4Q17 1Q18 2Q18 Q318 Q418
Total Postpaid Phone 212,755 214,340 215,571 216,567 217,868 219,907
YoY % Change 1.7% 2.3% 2.3% 2.4% 2.6%
Total Prepaid 53,587 53,456 50,604 51,049 51,651 51,629
YoY % Change 5.6% -1.7% -1.8% -3.6% -3.4%
Total Wholesale 36,690 36,878 36,618 36,499 36,501 36,821
YoY % Change -12.7% -10.8% -0.9% -0.5% -0.2%
Total 312,370 315,872 316,892 318,685 321,108 324,352
YoY % Change -0.5% -0.1% 2.8% 2.8% 2.7%
Gross Profit Growth Recovering
Industry Fundamentals Continue to Heal
Industry Service Revenue Growth Accelerated
Industry Sub Growth Accelerating & Mix Sweetening
EBITDA Growth Accelerating
Handset Subsidies Down $815m YoY, yielding 4% to EBITDA
Note: Service revenue likely strengthened ex. hurricane credits
Sprint, AT&T, and VZ all guided to higher ARPUs in ‘19.
Wireless Service Gro ss P ro fits (A dj)3Q17 4Q17 1Q18 2Q18 Q318 Q418
AT&T Mobility
Sprint 4,545 4,464 4,465 4,311 4,454 4,436
T-Mobile 6,129 6,213 6,289 6,357 6,428 6,549
Verizon 13,475 13,483 13,033 13,353 14,025 13,849
Total 24,149 24,160 23,787 24,021 24,907 24,834
YoY ch -1.8% -0.9% 0.6% 2.1% 3.1% 2.8%
Note: Adjusted for ASC 606
Net Equipment Profit 3Q17 4Q17 1Q18 2Q18 Q318 Q418
($ millions)
Sprint -444 -477 -476 -145 -178 -145
T-Mobile -487 -751 -492 -447 -471 -825
Verizon -613 -864 -269 -353 -136 -307
Total -1,544 -2,092 -1,237 -945 -785 -1,277Service Revenues 3Q17 4Q17 1Q18 2Q18 Q318 Q418
Adjusted Service revenue growth
AT&T Mobility -2.9% -2.5% -1.7% 0.2% 2.3% 2.9%
Sprint 2.5% 3.1% 4.6% 2.8% -0.5% -0.5%
T-Mobile 7.4% 7.3% 6.9% 6.5% 4.7% 6.6%
Verizon -5.1% -2.9% -0.7% 2.5% 2.9% 1.9%
Total -1.3% -0.3% 0.9% 2.5% 2.6% 2.7%

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