Nils Paellmann - John J. Legere - Chief Executive Officer, President, Director and Member of Executive Committee J. Braxton Carter - Chief Financial Officer, Executive Vice President and Treasurer G. Michael Sievert - Chief Marketing Officer and Executive Vice President Neville R. Ray - Chief Technology Officer and Executive Vice President

Kevin R. Smithen - Macquarie Research Philip Cusick - JP Morgan Chase & Co, Research Division Craig Moffett - MoffettNathanson LLC Colby Synesael - Cowen and Company, LLC, Research Division Simon Flannery - Morgan Stanley, Research Division Walter Piecyk - BTIG, LLC, Research Division Amir Rozwadowski - Barclays Capital, Research Division

Good morning, ladies and gentlemen, and thank you for standing by. Welcome to the T-Mobile US First Quarter 2014 Conference Call. [Operator Instructions] This conference call is being recorded today, May 1, 2014. And now I'd like to turn the conference over to Mr. Nils Paellmann, Head of Investor Relations for T-Mobile US. Please go ahead, sir.

Good morning. Welcome to T-Mobile's First Quarter 2014 Earnings Call. With me today are John Legere, our President and CEO; and Braxton Carter, our CFO. Let me just read the disclaimer. During the course of this earnings call, the company will make projections and other forward-looking statements that are subject to many risks and uncertainties that could cause actual results to differ materially from expectations. A detailed discussion of the risks and uncertainties that affect the company's business and qualify the forward-looking statements made in this call is contained in T-Mobile's SEC filings, particularly the risk factors included in our annual report on Form 10-K filed with the SEC on February 25, 2014. Copies of T-Mobile's SEC filings are available online from the SEC or at the Investor Relations homepage on the T-Mobile website. The company's projections and forward-looking statements are based on factors that are subject to change, and therefore, these statements speak only as of the date they are given. The company does not undertake any duty to update any projections or forward-looking statements. In addition, during today's discussion, management will comment on both actual results and certain non-GAAP results. Reconciliations between GAAP results and these non-GAAP results are available quarterly on the Investor Relations homepage on our website at t-mobile.com. Let me now turn it over to John Legere. John? John J. Legere: Okay. Good morning, everyone. I'm very excited to be here to talk about our first quarter results. And as I hope you've seen, 2014 started out extremely strong, and Q1 was a record-breaking quarter for T-Mobile. And in a true Un-carrier fashion, we didn't break just one record, we shattered a whole slew of them. So let me jump right in and dive into some of what we are ready to announce today. The wireless industry did continue to grow in Q1, which I think is news up until you could see our numbers. And T-Mobile captured virtually all of the industry phone growth while successfully taking market share from all of our competition. Once again, T-Mobile was the fastest-growing wireless company in America. Our Un-carrier moves have ushered in a consumer revolution, giving consumers a stronger voice. And that's showing up in our results. In fact, we added more postpaid net additions this quarter than all 3 of our big competitors combined. Our total net customer additions were nearly 2.4 million, our first-ever quarter of over 2 million net adds and our fourth consecutive quarter over 1 million. Branded postpaid net additions were over 1.3 million. And here is where it gets interesting. Our phone adds were over 1.2 million, outperforming our nearest industry competitor by a multiple of 12x. Un-carrier 4.0 clearly delivered. And as new devices launch and prompt customers to reconsider which wireless provider is best for them, we believe that Un-carrier 4.0 will continue to give customers the freedom to choose T-Mobile. We delivered top line growth and have set the stage to significantly grow the bottom line in the future. Service revenues of $5.3 billion represent our fourth consecutive quarter of pro forma sequential growth and a return to year-over-year growth. Year-over-year, we grew pro forma service revenue 4.5% and postpaid service revenues by 5.6%, the best since the fourth quarter of 2008. And that was during a seasonally soft first quarter. Q1's adjusted EBITDA of $1.1 billion reflects strong business momentum from the investment we have made in significant customer growth in the ETF offer. We believe this tradeoff is clearly in our favor, given the high quality of these new customers and the benefit of adding them in Q1 for the full 2014 EBITDA. Customer quality continues to be very strong. Customers are signing up for more data, paying their bills and staying with us longer. This is reflected in our record-low churn and improving customer quality metrics. Service bad debt expense declined, and the percentage of Prime customers in both our growth adds and EIP receivables increased significantly year-over-year. T-Mobile continues to thrive and grow. We have a clear strategy focused on addressing consumer pain points, and we are constantly bringing innovations to the market. We won't stop innovating. And we will never stop advocating for America's wireless consumers. In April, we took another series of steps with 4 days of back-to-back announcements. In case you missed it, let me quickly hit the highlights. We launched Simple Starter, a $40 per month unlimited talk, text and 500 megs data plan built for value-conscious consumers. Then we rolled out Operation Tablet Freedom, unleashing consumers to experience tablets beyond Wi-Fi limitations and making us the only major national carrier or retailer to offer LTE tablets for the price of Wi-Fi-only models. Next, we delivered on the biggest launch of the year so far, the Samsung Galaxy S5 with 0 down. Last but not least, Overage Freedom, our final and most compelling new move. We abolished overages for all of our customers. And I challenged AT&T, Verizon and Sprint to step up and do the same. We pioneered this industry movement, and I launched a petition for consumers to speak up via Change.org, where the petition has over 171,000 signatures to date. What a great way to start the year. While the competition has been busy reacting to us and imitating our moves, we've been rolling out new initiatives. And I feel great about them. Now I know you guys want to see all of this in numbers. So I'll start by telling you now that we are significantly raising our branded postpaid net adds guidance to 2.8 million to 3.3 million. I stated before that we would hit the high end of our original guidance. And we're not only doing that, we're raising it further. We are also slightly revising our adjusted EBITDA guidance to account for this investment in significant growth. This is a short-term trade worth making. Well, today marks the 1-year anniversary of the closing of the MetroPCS deal and T-Mobile becoming a public company. What a better way to mark that milestone than with rapid growth and a record-breaking quarter. This turnaround represents a major transformation. We turned a declining business into a growth business. The question is, how? By listening to customers and offering them exactly what they told us they wanted: great service on a nationwide, lightning-fast 4G LTE network; devices when and how they want them; and plans that are simple, affordable and without the restrictions the other guys place on them. These actions delivered results in just 12 months. We added over 6 million total customers, including 2.4 million this quarter. On the postpaid side, we had over 7 million postpaid gross adds, including 2.3 million this quarter, resulting in over 3.5 million postpaid net customers and over 1.3 million this quarter. We achieved record-low churn of 1.5% in Q1, down 40 basis points year-over-year. We went from 0 4G LTE covered POPs to 209 million by the end of the year. We now stand at more than 220 million, not to mention we have the fastest nationwide 4G LTE network in the United States. And as we rapidly integrate MetroPCS, we've added an additional 30 markets and nearly 2,200 additional doors. And we're not done yet. We will continue to move with agility, precision and speed to drive this business forward. Sounds pretty simple, doesn't it? In truth, it takes a lot of hard work from our team to start this Un-carrier revolution. And our stock chart shows that investors recognize the impact of these moves that they are having on the marketplace. Our stock is up nearly 88% since completing the merger last year. And that's as of yesterday's trading. Now let's drill into our Q1 results further. Q1 was a quarter of records. Just listen to this again. We added over 1.3 million branded postpaid customers, our best result ever. That consisted of over 1.2 million branded postpaid phone net adds, another record, and by far the best in the industry. And I'll be glad in Q&A to remind you of the results of the others if you forgot them. Contrary to popular belief, the wireless industry continued to grow in Q1, when you add this to those other devastatingly low numbers. And I think you now see that T-Mobile captured virtually all of the industry phone growth while successfully taking market share from competitors. Our gross adds were up 136% year-over-year and 23% quarter-over-quarter, while our postpaid churn was 1.5% in Q1, down 40 basis points year-over-year and 20 basis points sequentially, a winning combination in this business. Our mobile broadband net adds, consisting mostly of tablets, were 67,000. While our competitors have been living off tablets, we're just getting started and see it as a huge opportunity. We expect our momentum to accelerate as the word gets out about Operation Tablet Freedom. Stay tuned. The quality of our customers is showing up in our churn results, which hit a record low this quarter. Customers are not only coming to us in droves, they're staying with us longer. Quality is also showing up in our customer mix. The mix of Prime customers within the branded postpaid gross adds increased 19% year-over-year. 53% of the EIP receivables were classified as Prime, up 9 percentage points from 44% at the end of the first quarter 2013. And service bad debt expense continues to decline, down 3% year-over-year and 13% sequentially. I also want to point out that our branded prepaid business had an outstanding quarter. We had 465,000 branded prepaid net adds, up 353,000 versus the fourth quarter and 155,000 last year. The improvement was driven primarily by the MetroPCS brand expansion, more than offsetting the migration from prepaid to postpaid that we have seen since the launch of Simple Choice. We saw that migration continue in the fourth quarter -- first quarter with approximately 110,000 customers moving from prepaid to postpaid. Now let me turn to the total customer growth, including wholesale. Total branded nets, including postpaid and prepaid, were almost 1.8 million in Q1. That's up 807,000 sequentially and nearly 1.7 million year-over-year. We also had a solid performance in wholesale in the first quarter with a total of 603,000 net adds, of which MVNO was 383,000 and M2M was 220,000. Combining all of this, we generated 2.4 million total net adds, moving the customer base of T-Mobile close to the 50 million customer mark. This marks our first quarter ever with over 2 million net adds and the fourth quarter consecutively with over 1 million net adds. That is amazing, especially in the seasonally slow first quarter. Let's talk about network. Our network is the foundation of our success. We continue to modernize, increase coverage and speed and meet our customers' rising expectations. Let me give you a few highlights about where we stand today and what we're working on for 2014. We continue to expand our 4G LTE network this year. We now stand at more than 220 million 4G LTE covered POPs, and we're well on our way to covering more than 250 million people this year. T-Mobile continues to deliver the fastest 4G LTE network in the U.S. based on download speeds from millions of user-generated test results and not competitor-funded drive testing. In the first quarter, T-Mobile experienced average download speeds of 16.9 megabits per second, ahead of Verizon at 15.5 and AT&T at 14 and well ahead of Sprint at 8.1. And we continue to ramp up our speeds as we commit more spectrum to LTE and upgrade our cell site backhaul. The most recent data from April demonstrates our continued leadership, with T-Mobile speeds at 18.6 and widening the gap to second-place Verizon at 16.5. We have now rolled out 10+10 4G LTE in 43 of the top 50 metro areas. We've rolled out 15+15 in 9 metro areas and expect to hit 19 by year end. And 20+20 is live in North Dallas and Detroit and will be available in at least 7 markets by year end. As a reminder, with 20+20 4G LTE, customers are getting average download speeds in the 20s and 30s, and we have observed peak download speeds closing in on 150 megabits per second. Our network speed is incredible and just getting better. As you may have heard, our 700 MHz A-Block transaction with Verizon closed yesterday and ahead of schedule. The transaction results in a net gain in spectrum position in a significant number of major markets, complements our already best-in-class mid-band spectrum position and, importantly, covers 70% of the existing T-Mobile customer base. Combining with our existing A-Block holdings in Boston, T-Mobile now has low-band spectrum covering 158 million people or approximately 50% of the U.S. population in key places such as New York, L.A., Dallas, Houston, Philadelphia, Atlanta, Washington, D.C. and Detroit. In total, our low-band spectrum covers 9 of the top 10, 21 of the top 30 metro areas in the U.S. We will quickly commence deployment of this spectrum in 2014 and can't wait to get started. There will be more spectrum to auction over the next 2 years, including low-band. We appreciate the work of the regulators to enable fair and competitive access to the spectrum for all parties. And we are carefully weighing our options on the best path forward. Now let me provide you with an update on the MetroPCS integration, which continues to exceed even our own expectations. The MetroPCS customer base is rapidly migrating to T-Mobile-compatible handsets. Currently, 53% of the total MetroPCS customer base is already on the T-Mobile network, up from nearly 40% at the end of the year. In terms of spectrum, more than 50% of the MetroPCS spectrum on a megahertz POP basis have already been refarmed and integrated into the T-Mobile network at the end of the first quarter, up from 25% at the end of the year. In 2013, we added 30 new MetroPCS markets, and we will continue to ramp up distribution. We've added 500 new Metro distribution points in Q1, bringing the total to nearly 2,200 doors in the expansion markets and a grand total of 9,000 MetroPCS outlets nationwide. Last quarter, we gave you a detailed update on synergies and integration costs. And we will be providing further updates on our progress when we present our year-end results. Let me just tell you that we remain confident, more than ever, that the synergies projected at the announcement of our transaction were conservative and are coming in ahead of expectations. As evidence of this, I will again highlight that we are moving MetroPCS 3G CDMA customers to a better, faster network and offering them a better experience on the T-Mobile network. This will enable us to accelerate the shutdown of the CDMA portion of the MetroPCS market in several markets in 2014, a year earlier than expected. We plan to shut down the CDMA portion of networks in Philadelphia, Las Vegas and Boston later this summer with the potential for early shutdown in several additional markets in 2014, all while ensuring a seamless transition for our customers. Overall, what an incredible quarter. Now I'd like to turn things over to our CFO, Braxton Carter, for our review of the quarterly financials and guidance, and then I'll be back to answer questions. Braxton? J. Braxton Carter: Yes. Thank you, John, and good morning. I'm so excited to share these fantastic results with you. Let me start by discussing our revenues and adjusted EBITDA for the quarter. All figures for 2013 are presented on a pro forma basis to allow for an apples-to-apples comparison. In the first quarter, total revenue amounted to $6.9 billion, growing at more than 15% year-over-year and 0.7% quarter-over-quarter. The year-over-year growth was primarily due to strong equipment sales. And it's important to point out that the sequential increase was driven by the growth in service revenues. Equipment sales were down $133 million versus the fourth quarter while service revenues were up $168 million. The decline in equipment sales is largely attributable to the accounting treatment for our ETF program, which reduced equipment sales and adjusted EBITDA by approximately $100 million. In the first quarter, we financed $1.2 billion of equipment sales on our Equipment Installment Plan, or EIP, up slightly compared to the fourth quarter of 2013. Going forward, we will see service revenue become an increasing driver of total revenue growth. For me, service revenues were a key highlight this quarter, the fourth consecutive quarter of sequential growth and a return to year-over-year growth, which was 4.5%, a great start to the year. This growth was due to the significant increase in customers and a moderating decline in ARPU. We generated nearly $1.1 billion of adjusted EBITDA in the first quarter, reflecting the pressures of a significant acceleration in growth, strong uptake of the ETF offer and record smartphone sales. First quarter adjusted EBITDA declined 12% sequentially as customers responded to the ETF offer in huge numbers, creating growth at a time where there is typically a seasonal slowdown. The uptick of the ETF offer amounted to approximately 21% of branded postpaid gross adds with a corresponding equipment revenue and adjusted EBITDA impact of approximately $100 million. We also had record smartphone sales of 6.9 million units and a branded postpaid upgrade rate of 7%, down from 9% in the fourth quarter and up from 5% in the first quarter of 2013. Underlying cost discipline remained strong, and as you can see from the essentially flat SG&A line and cost of service, which increased only modestly. Turning to ARPU. Branded postpaid ARPU declined by 1.4% sequentially in Q1. And that is a significant improvement compared to the drop of 2.9% in the fourth quarter. We are still seeing ARPU decline due to the ongoing adoption of the Simple Choice plan, which puts pressure on service revenues. We are encouraged by the fact that we have already gone through most of the migration, in contrast to our competitors, who are just starting out migrating to value-type plans. At the end of the first quarter, 75% of our branded postpaid base was on Simple Choice or Value plans, up from 69% at the end of Q4. We continue to expect ARPU will generally stabilize in the second half of 2014 once we are done with most of the migration to Simple Choice. We also expect the recent price changes, like increasing the price of our 4G unlimited offer and eliminating affinity discounts for these customers, will help us achieve our ARPU goal. I also want to give you an update on branded postpaid average billings per user, or ABPU. As a reminder, this is branded postpaid service revenues plus EIP billings divided by average branded postpaid customers. It approximates what we receive on a cash basis from our customers on a monthly basis. Looking at it this way, ABPU of $59.54 in the first quarter grew 3.9% year-over-year and 1.3% sequentially. These numbers show a significant acceleration from Q4, when the ABPU was up 1.4% year-over-year but down 0.5% sequentially. And I also want to give you an update on our customer quality metrics. Our service bad debt expense was down 3% year-over-year and 13% sequentially. And service bad debt expense as a percentage of service revenues was 1.4%, down 12 basis points year-over-year and 26 basis points sequentially. Total bad debt expense was up $13 million sequentially and $30 million year-over-year due to the tremendous growth in our EIP program. But the ratios remained well within our bands, and we are confident we are adding the right customers. Lastly, branded prepaid ARPU grew slightly both year-over-year and quarter-over-quarter, reflecting growth in monthly prepaid plans that include data services. Turning to cash CapEx and cash flows. We spent a total of $947 million in cash CapEx in the first quarter, supporting the ongoing investment in our [indiscernible]. That was up 7% compared to the fourth quarter and down 23% compared to the first quarter of 2013. We continue to expect that full year 2014 CapEx will be between $4.3 billion and $4.6 billion with a bit of a ramp later in the year as we start shutting down the CDMA portions of the MetroPCS network and commence the rollout of 700 MHz. And we continue to see the benefits of our spend as our 4G LTE network, the fastest in the nation, covers more than 220 million people in 284 metro areas. While supporting the necessary network modernization, we also remained focused on free cash flow generation. In the first quarter, we generated simple free cash flow, that is adjusted EBITDA minus cash CapEx, of $141 million despite the cash outflows associated with our successful ETF program launch and the significant growth that we've recorded. A recent factoring agreement benefited cash flow from operating activities by $434 million in the first quarter. In terms of working capital, total EIP receivables, net of allowances for credit losses, increased by $540 million from Q4, reaching a total of $3.1 billion in Q1. I want to point out that the sequential increase in our EIP receivables of $540 million in Q1 was less than the $679 million sequential increase we experienced in Q4 as strong growth in our EIP collections more than offset slightly growing equipment sales financed on EIP. To put it simply, the working capital drag appears to be decreasing. Based on our current projections, the EIP program is expected to cross over in the course of 2015, meaning that total EIP billings will exceed the amount of EIP financed, resulting in a decrease of total EIP receivables. Our cash position remains strong. We had ending cash of approximately $5.5 billion. Pro forma for the acquisitions of 700 MHz A-Block spectrum from Verizon, which closed yesterday, our cash balance will be reduced to $3.1 billion, still leaving us with significant financial flexibility. Net debt, excluding towers, amounted to $14.6 billion at the end of Q1 or 3x our pro forma combined adjusted LTM EBITDA at the low end of our target range of 3 to 4x. Pro forma for the spectrum deal, our net leverage ratio will be 3.4x. Let me now turn to our guidance for 2014. Given our Un-carrier initiatives, we expect the momentum in branded postpaid customer growth to continue and would currently expect between 2.8 million and 3.3 million branded postpaid net additions in 2014. That is up from our prior guidance of 2 million to 3 million branded postpaid net additions and an increase of 550,000 postpaid customers at the midpoint. Adjusted EBITDA is now expected to be between $5.6 billion and $5.8 billion. That is a revision to our prior guidance of $5.7 billion to $6 billion. We are reducing our adjusted EBITDA guidance slightly to incorporate our new guidance for customer growth in 2014. Cash CapEx is expected to be between $4.3 billion and $4.6 billion. That has not changed versus prior guidance. The transition to Simple Choice plans should be largely complete by the end of this year with the penetration of Simple Choice and Value plans reaching 85% to 90% of the branded postpaid base by the end of 2014. Again, that has not changed versus prior guidance. As to the second quarter of 2014, while not providing quarterly guidance, I want to point out that we do not expect that Un-carrier 4.0, our ETF offer, will have as dramatic an effect on customer net additions as it did in the first quarter. However, we are still experiencing significant customer interest in our Un-carrier propositions and our ETF offer, which should be taken into account projecting Q2 adjusted EBITDA. Let me now turn it back to John for a recap of the highlights. John J. Legere: Okay. Thank you, Braxton. It was, as you could hear, a record quarter on many fronts, which was enabled by the hard work of T-Mobile employees. Consumers have noticed, and the word is spreading like wildfire. The consumer wireless movement is rapidly approaching a tipping point, and that's when this gets really interesting. The first year of Un-carrier has been terrific, but it's going to pale in comparison to what lies ahead. The wireless industry, as you can hear, did grow in Q1. Big news. And T-Mobile captured virtually all of the industry growth while successfully taking market share from the competition. Now I'm going to recap highlights one more time, in particular because Roger Cheng has spent the whole call tweeting to me and because Dave Barden's writings suggest he might not have heard them the first time. So on the 1-year anniversary of going public, T-Mobile celebrated with rapid growth and a record-breaking first quarter: 2.4 million total net customer additions, our largest number of customers added in a single quarter; over 1.3 million branded postpaid net customer additions, including more than 1.2 million phone adds. Small recap, by the way, Verizon's were minus 138,000, AT&T's were positive 100,000 and Sprint's were minus 747,000. 136% year-over-year and 23% Q-over-Q increase in branded postpaid gross customer adds. A record 6.9 million smartphones sold in Q1. We are growing service revenue. This was our fourth consecutive quarter of sequential service revenue growth, which grew 4.5% year-over-year. And we expect to convert this into adjusted EBITDA growth in 2014 and beyond. We're adding the right customers, more Prime customers, customers who are purchasing higher data buckets and customers who are staying longer. T-Mobile is in a growth phase where we expect to drive further momentum and continue investing in profitable growth. We're raising our subscriber expectations for the full year after only 1 quarter. And we're clearly not done yet. Now I think we're ready for Q&A, operator. First question, please, Shelley.

[Operator Instructions] And we'll take our first question from Kevin Smithen with Macquarie. Kevin R. Smithen - Macquarie Research: Given the success you had after Macklemore at CES, we were surprised you didn't crash Sprint's Pharrell concert this week. I wondered if you could discuss porting ratios with AT&T, Verizon and Sprint over the past several weeks. I know these companies have all launched new EIP plans with some promotional pricing. And I want to see what the development has been in the latter half of the quarter and into April, if you can provide that specificity. John J. Legere: Yes. Let me start that, and then I'll ask Mike Sievert to comment on it. First of all, the reason we didn't go to the Sprint party is that if I hear that "Happy" song one more time, I'm going to stab somebody. And I'm not sure how it would sound on intermittent connectivity either. The second thing is, on the porting ratios, we're going to be a little less specific. I think by the end of last quarter, we told you that, roughly, the postpaid porting ratios were 1, 2 and 3 for the big guys and moving in our direction. I will tell you that in early January, they moved to oh-my-God to 1, numbers that I'm sure the industry has never heard and ones that we hasten to even post. They've moved to a little more rational level, as you would expect, after the churn. I would just simply say that they are in a far superior position as to where they were last quarter and ones that even into April show a very strong business. And the ratios in the early part of the quarter were, I think, things that no competitor has ever seen. So we hastened to even show those. But Mike, do you want to comment on that? G. Michael Sievert: Yes, the only thing I would add is that, obviously, Q1 was a very competitive quarter. I mean, all of the major competitors had significant new news. There were pricing actions from both AT&T and Verizon. Sprint has a new initiative that they appear to be very proud of but which -- that which is hard to pronounce. And despite all of that, this was the quarter that T-Mobile delivered record growth. And as John said, porting ratios hit unforeseen levels. And so we haven't disclosed them. We think that they sort of distract from the main message and they hit such levels that it'd be hard to predict whether or not those levels would be sustainable. But it's important to see that T-Mobile is executing and outgrowing the competition in a time, a Q1 period, that was historically very, very competitive across all competitors. John J. Legere: Yes. Kevin, let me give you the bookmarks. This is the only piece I'll let you talk me into it on this. And I know it was really hard to pull this out of me. On one end of the continuum, with one competitor, we actually had individual days that approached 17:1 on porting ratios. And if you tick that to the other side, I think it's 0.03, 0.04 [ph] or whatever. And there has never been a day in 2014 ever that any competitor has been over 1 with us, so you can take it from there. Obviously, when we stop being coy about a statistic, it's because it's heavily in our favor.

And next, we'll go to Phil Cusick with JP Morgan. Philip Cusick - JP Morgan Chase & Co, Research Division: I guess, on that point, churn at 1.5%, I looked back and I haven't seen a number that low from a noncellular carrier in 10 years since Nextel was still around. But this first quarter didn't used to be a seasonally low quarter. And given what may be a sort of prepaid upward action going on in your base, should we think of this as sort of seasonally low and then that ramping up a little bit? Or is this still a number that's on its downward trajectory through the year? John J. Legere: Two or 3 things to think about. One is just to play the tape back, since this is a Happy Birthday 1-year for the company, our original goals were to take the 2.5% postpaid churn over successive years from 2.5% to 1.9% to 1.8% to 1.7% at the end of 2016. So we're well ahead of plan. A lot of that has to do with the tremendous network quality that we've gone through. Second point I want to make is it is always important here to put a little footnote in to even amplify the strength of these numbers to remember that we are 100% no contract, no service contracts. And the base of our competitors being far more premium, family, governments, you can question what the target of their churn will be if they go at some point to 100% no contract. We're very satisfied with the 1.5% level. We don't think it'll be a straight line. But we definitely don't think we'll ever return to the other levels. And I think as the network improves with the 700 band that we announced yesterday and that gets to be deployed, we think we have longer-term ways to stabilize and even further decline. But our target is not the existing churn levels of our larger competitors, which we think are temporarily artificially low. But 1.5%, we're very pleased with. It's ahead of our plan. But there's no spike in it that we can point to that we expect to go away. J. Braxton Carter: Phil, you brought up, I think, another very interesting point, and that's the prepaid momentum that we're seeing with the business. And we're very, very excited about the MetroPCS expansion. And that was the primary contributor to that significant year-over-year increase in prepaid net adds. I will tell you, while we don't disclose Metro results individually, the churn profile at Metro is also at an all-time low, amazing retention. Again I think it's a testament to the super-high-quality network, the very rapid migration of the MetroPCS customers over to the T-Mobile network. And we're very encouraged with what we're seeing from a retention standpoint with that brand. John J. Legere: Yes. And I think prepaid churn has gone down considerably. So I think the prepaid churn level is down to 4.3%. And the interesting point is we know that the numbers, the average revenue per user and the churn levels at MetroPCS on the prepaid side were always better than the prepaid magenta brand. And we're now at greater than 60% of our prepaid and rising that is made up of Metro. So we're seeing those benefits and expect to continue.

And next, we'll go to Craig Moffett with MoffettNathanson. Craig Moffett - MoffettNathanson LLC: Two questions, if I could. First, John, you've obviously proven, at this point, that you can grow your base extraordinarily quickly. Strategically, at what point do you pivot, if at all? Do you think about the longer-term value of this strategy being -- eventually taking some measure of price? Or is it all based on the leverage of your fixed costs? And then a question for Braxton. Just to -- I know it's early days, but as you think about the AWS-3 auctions coming up and the incentive auctions coming up next year, can you just give us some insight into how you would think about financing those spectrum acquisitions, if you have anything to say on that topic yet? John J. Legere: Yes. I'll start, and Braxton can actually segue or Mike can on the first half of the question as well. Yes, we are clearly proving that we can accelerate growth. And it's basically a simple formula associated with solving customer pain points and removing some of the arrogance of the industry. It's not rocket science. And we don't think we're anywhere close to finished with the painfully obvious points that we can attack, that we'll continue to focus on the growth. I would say that it's important to note, as you dig deeper here, especially in the first quarter, if anything, we solidified our pricing envelope in Q1. We added a higher pricing tier. We added a low-end price point but a less-featured option that provides profitability for us in an entry point. So there's no price reduction as a lever for us. And we've been very clear that this ETF program, Contract Freedom's final nail, the attack on the family plans, is a highly profitable approach if done correctly. And so far, it has proven out to come through at the ways that we anticipate. I don't think Braxton or I or the team has ever wavered from our 5-year planned statistics of a highly profitable business growing in operating free cash flow and growing very strongly in EBITDA margin percentages. And we're on track for that. And having these results very front end-loaded in this year help even greater in that plan. So yes, there's no expectations on our part to sacrifice profitability for significant growth. And frankly, the amazing news to us is that we don't need to. But Braxton or Mike, do you want to... J. Braxton Carter: Yes, it's -- when you look at the decision to put the Un-carrier 4.0 ETF offering at the very beginning of the year, part of the calculus there is that enhancing growth in the front end of the year will certainly pay back within your -- and be accretive to the overall results. Q1, from an EBITDA margin standpoint, given the significant investment in our growth, which will pay massive dividends in the future, given the quality of customers that we're bringing on -- remember, we previously talked about 2/3, roughly 2/3, of the flow that we're getting on the ETF offer are the very highest credit quality customers that have the longest tenure with us. You look at the guidance that we've given. Even with very significant acceleration in growth, we're growing EBITDA by 7%, if you take a look [indiscernible] of our guidance on a year-over-year basis, which implies that there's a lot of improvement in the underlying margins that's going to occur during the year. There's multiple factors relating to that. We talked about a decline curve over the year on the ETF offer. You've got MetroPCS synergies with the shutdown of the networks that we've talked about or the CDMA portion of the network that we've talked about. And you also have a lot of other internal initiatives that are just kicking in that are going to be accretive. But we are very, very focused on growing profitability and cash flows over the long term. And what's exciting, when you look at this type of growth and you project that growth on what it does to EBITDA in '15 and beyond, the free cash flow generation of this business gets pretty exciting. Mike, do you want to add anything? G. Michael Sievert: Just quickly, the only thing I would add is that in contrast to what John and Braxton just said, there are plenty of cynics out there, including our competitors, that would tried to convince you that what we're doing is buying growth in an uneconomic way. And what I think we're hearing from both John and Braxton is that the opposite is true. What we're really doing is bringing in the highest-quality customers in our history at a marginal cost from the Un-carrier 4.0 that's a little bit higher as well but far outweighed by things like superior credit class, superior data attach, higher ARPUs, a more Prime credit -- higher EIP attach on these customers as well, which forecasts better churn profiles on them. So we're really, really pleased with the economic system that we have going right now from the Un-carrier moves. These are high-quality customers, so they're going to have great returns. J. Braxton Carter: And as to your second question on the upcoming auctions, we are currently analyzing all the rules. We're awaiting the final rules. We're very supportive of the commission and their initiative to ensure that there is competitive access to adequate spectrum to the competitive carriers on keeping it from being completely monopolized by the predatory duopoly. Again, we have made no final decisions as to the amount of our [indiscernible]. We're analyzing that, and proceeds would come out of existing cash balances with some potential debt financing. John J. Legere: I'm just going to footnote both of those topics for you also. On the first item, I want to amplify that while all this was going on, the attach rate to JUMP! has gone to 81%. We have about 5.3 million people signed up for JUMP!. And the shift to the higher-tier data plans, we've had an attach rate to the higher plans of over 84%. So customers are moving up and moving into Simple Choice. They're moving up, and these things enhance profitability for us as well. On the second point, I think it's important to note, one of the fun things that's happening right now in the United States wireless industry is there's a small taste of what real competition looks like. And the big beneficiaries here are consumers. They're having a ball. Consumers love to see what's going on. And the big guys, rusty as they may be, are attempting to move, and it's fantastic. I mean, so the U.S. industry is seeing a glimpse of what competition looks like. And the decisions that are made in the industry over the next year as to how this spectrum is allocated and how decisions on consolidation and other variables take place is going to be critical decisions to let this U.S. wireless industry continue this game the way it's being played with this all-out wrestling that is perfect for consumers in changing and keeping the United States wireless industry at the forefront of the world. And I think that's a little glimpse as to what's going on. So these are big, bold things that will happen in the industry, and we love the hand that we're holding in that game.

And next, we'll go to Colby Synesael with Cowen and Company. Colby Synesael - Cowen and Company, LLC, Research Division: Two questions, if I may. The first one, just want to talk about tablets. Yes, I guess, relative to your competitors, the net adds is a little light, clearly focusing on phone adds right now. But when you think about, over time, you're going to want to start to focus more on monetizing your current customer base, should you be more aggressive on tablets right now? Is the plan that you put in place, I guess, in October working to what you would want it to? Do you have to do more? Just a little bit of color on that. And then the other question is, you've had your value plans in the market now for about a year. You've had the JUMP! plan out since last July. When you look at the resale value you're getting from the devices that you're kicking in, I guess you could even add the ETF in terms of customers giving you their old devices, are you achieving the value for those phones that you were initially anticipating when you put them into the third-party market that effectively makes the math work out based on what you were initially expecting? John J. Legere: Yes. I'll start and throw the ball to the evil genius of the team, Mike. This is a great topic. We're kind of excited about this one and holding back on it. And it is one of those things where if I was one of the other guys -- think about the growth in the industry. The prepaid growth in the industry in Q1 was about 2.2 million subscribers when you look at about 0.5 million phone net adds, of which we got 1.2 million, and about 1.7 million tablets, of which we were not really playing totally in that space. We understood that. And we started in this quarter, after a small start last quarter, of just testing this game. And Operation Tablet Freedom, which was an attempt to get people to stop with these Wi-Fi devices and give them LTE-connected devices at Wi-Fi prices with 1.2 gigs of data free per month for the rest of the year, and then moving, of course, to our lifetime free 200 megs of data. I would tell you that the early response that we got was phenomenal. So a phenomenal, one of those oh-my-God changes in growth. But what those things have told us, this is a space we can really play. And now what's important that you can look for from us is our shift to tablets won't be what you've seen so far. What you've seen so far is players moving to no or negative phone net adds and, therefore, having some positive tablet adds. Now we want to continue very strongly in the phone net add business and grow considerably in the tablet business and then, of course, move to an environment where people are using these devices interchangeably, all LTE-based, all connected. So I think watch this space for us, but not as a way to fill in a hole or not to back up the truck with cheap tablets to fill in numbers. But Mike, do you want to... G. Michael Sievert: Yes. I think just to amplify that, our competitors are relying on this tablet growth, which is a less valuable subscriber in terms of revenues per gigabytes consumed, just to get to 0 on their postpaid net adds or maybe to the first 100,000. And so they're leaning in on that because it's all they've got. Our Un-carrier movement has been systematic since the beginning about focusing on the biggest problems in the biggest space of the industry, and that's smartphones. And we've spent the last year focused on solving consumers in that high-value segment of the industry. And I think the results speak for themselves. But as John said, we're finally coming around to tablets. And we got started only in the fourth quarter. That was when we launched the iPad. That's the significant tablet play. And so we're brand-new with this. Our fourth quarter push was very interesting. But what was much more interesting was Operation Tablet Freedom, launched 2 weeks ago. So you'll have to stay tuned to see how that goes. But you should hear from us some confidence and some excitement about the tablet space. John J. Legere: And I know a number of you go to our stores and do channel checks and see what's going on. If you go in the stores now, the buzz is tablets. The momentum continues on the devices, but the environment is that we've cracked the code. The tablets are moving in a very big way as opposed to the last few quarters. And I think we've only started to innovate in this space. Both Un-carrier moves on the tablet as well as technological shifts in how we think about tablets will be coming from us.

We'll take our next question from Simon Flannery with Morgan Stanley. Simon Flannery - Morgan Stanley, Research Division: It comes on a little bit from that last comment on tablets. You obviously raised the net add guidance for the year. But if I look even at the high end of the guidance, it implies a run rate almost half of what you did in the first quarter. And it seems like, given your momentum over the last few quarters, that's a pretty low bar. Can you just talk about the upside to that number? And in particular, we've just seen AT&T pull their ETF offer. Sprint's ends next week. But presumably, you're assuming that your ETF offer continues through the year, and that will help, plus tablets, and drive incremental adds. John J. Legere: Yes. Several things. One is, remember that even at the new guidance that we've given, it still assumes a postpaid run rate of equal to or greater than 0.5 million a quarter. And I think being respectful of the environment and making sure that we put numbers out that we're comfortable with, I think that's the guidance that would serve for the year. Remember, this is only Q1, it's only April. So we're attempting to be conservative, if, in fact, you're all ready to get used to 2.8 million to 3.3 million postpaid adds from T-Mobile being conservative. I think that may take a small time for a couple of the folks on this call. You want to grab into the tablet question? G. Michael Sievert: Yes, I think -- look, I mean, there's a lot of potential for us in the rest of this year. But we don't know what all the rest of the moves from our competitors are going to be. And we'll have to see what happens. But the thing to know from us is we tackle the opportunity one quarter at a time. As Braxton said, we see huge opportunity going forward from Un-carrier 4.0, which, to answer your question, that ETF offer, it's not a promotion. When we launch something with an Un-carrier label on it, that's a commitment to a structural change in the value proposition. We're against contracts. We ended them a year ago for our own new customers. We ended them for the industry in January. And we're going to keep that offer going as long as there are a significant number of customers trapped in contracts in this industry. John J. Legere: Yes. That's a fun topic, right? I don't want to speculate on it. But there's a couple of things, as Mike said. When we announce something in the interest of consumers, it's a change on our behalf to the industry, from our standpoint. And we don't care how long it takes. We ultimately believe that the industry will move to these variables. And remember that this was not ETF payments for us. This was Contract Freedom. So when you take no contracts and the ability for people at the time to make decisions to move over, we have determined that's it. We will do it forever. Okay, so that's number one. Number two, what we've seen is most of our competitors' responses are still time-based, one-off responses to us as opposed to structural changes in the way they serve their customers, whether it was a, if you guys remember, a big touted, "We're going to pay x amount of dollars for anybody that wants to leave T-Mobile and come to us. Oh, we were only kidding you." It's a strange period where they can't believe that they can't just switch and change the environment. And a temporary ETF that's pulled off the table is going to hurt more in their statement to customers. And it also says that they can't figure out structurally the economics of how to make it work. So these are very positive signs for us, but ours will continue. And again, I think it's the -- if not -- if they don't change, it's the end of these plans, right? I mean, one of the things that we haven't talked about is, on the highest-usage devices that we have now, unlimited customers are pulling down over 5 gigs of data a month. And on average, it's about 3.6 gigs on an unlimited plan. So if you take those, along with the elimination of ETF payments, family plans are dead. And so it's only a matter of time. But the game hasn't played out, and you can continue to see us play in that space.

And next, we'll go to Walter Piecyk with BTIG. Walter Piecyk - BTIG, LLC, Research Division: Okay. I guess I'll take the bullet on the deal question. Right now, the FCC, they're probably like doing cartwheels about your subscriber growth for preserving competition. Can you just talk about how you think competition could improve or not improve with any type of market consolidation? John J. Legere: Yes. As I said in some of my comments, this is the start of competition. And again, don't confuse yourselves. And you, of all people, would not be confused by this. The big are still the biggest. These are big, huge people who are probably calculating ways that they can protect their 55% and growing EBITDA margins and cede some share but not change the structure of their whole base in profitability because of the size of what they have. And they're probably playing the long game over 5 to 7 years' worth of spectrum aggregation and CapEx investment, et cetera, and believing that this is clearly a scale game. So as I sit here and look at the growth and momentum, there's a lot of questions that come up. When you play this game over 5 years or so, there are capital requirements and there are multiple ways to continue to play aggressively and to close the gap on the big guys. One of them, of course, that we've been very consistent on is that consolidation to create scale from several subscale players and to provide pooling of capital and pooling of scale and capability is one alternative. And I don't -- we've always said that we think, ultimately in the industry, it's a consolidation game that's a matter of when and not if. And again, that's not just amongst the 4 that you see. It's amongst multiple other tangential players that are sitting on the periphery of the industry looking in, who may want to play, and multiple players that are not seen, so whether it's cable industry, et cetera. So I guess, that's -- we've been consistent on that with no clear statement on timing. Otherwise, there are multiple paths that we need to look very hard at from the standpoint of the capital and the deployment. But when you're growing aggressively and profitably the way we are, we think the hand is a pretty good one to play. So consolidation is clearly... Walter Piecyk - BTIG, LLC, Research Division: Is that timing -- John, is that timing meaningful? Meaning that when you say it's when as opposed to if, is it kind of useless to have consolidation 5 years from now because, basically, things will have come together or some companies may have been in a much worse situation at that point versus now? I mean, how do you view the difference in timing? John J. Legere: Again, consolidation is -- again, as a statement of providing scale and profitability, you can look at it at any point in time. Would consolidation be a positive for the environment now? Of course. Would it be a positive in 2 years from now? It depends upon the players and who they are from a standpoint of what you're looking at as the environment. So we don't -- I know the question, Walt, is leading towards questions about specific consolidation opportunities. And we don't have any comment on those ideas. We just know that our scale, our growth and our momentum could benefit from a significant scaling of the fixed assets and the capital that's required to continue to move. And we are very pleased with the kinds of competition we're able to put to the big guys. And consolidation is one way that we know we could continue to put it aggressively to them over time. Walter Piecyk - BTIG, LLC, Research Division: Okay. And then just if I could sneak in one ops question, which is that Sprint and Verizon -- I think maybe AT&T might have said the same thing, but they're all like, "Well, January, T-Mobile was kicking our ass, and then like as the quarter progressed, we put in place things that were -- that improved it." So sequentially, as they look it through the quarter, they were saying that on a month-by-month basis, that they were able to push back on these ETF plans. So if you can comment kind of how you were exiting the quarter and how things looked at April relative to March or, overall, what the run rate looked like. John J. Legere: Yes. I think, if they're happy with the way customers are migrating as of May 1, it's fine with me. I mean, I'm perfectly good with this. And these are not just Sprint customers coming. I mean, obviously, the Prime credit increase in the quality of our customers are because they are coming from the biggest of the big. And again, we're not talking about porting ratios. Yes, we've seen some response from them. But again, all I can say is, if they're comfortable with the way they are today, then let's go forward from here. G. Michael Sievert: I would just add, there's some truth to what they're saying, and we should all agree that it's probably not sustainable for us to expect to be able to maintain those 17:1 porting ratios we saw at some periods during the quarter. Walter Piecyk - BTIG, LLC, Research Division: But Mike, doesn't that beg the question that you talked about the pricing envelope? So if there was a pushback through the quarter and that continues, do you have to make another adjustment to that pricing envelope? G. Michael Sievert: Well, you saw us make some pretty significant moves early in Q2. And that's what you've seen us do all through the Un-carrier movement. You've seen us stay ahead of the competition, stay ahead -- set the pace, set the tone of what's being talked about and be unconfused and unresponsive to what they're doing and be focused on solving customer problems. That's worked incredibly well for us since we started Un-carrier. The other guys are responding to us, and you can see how effective they're being at doing that just by looking at all the numbers in Q1. John J. Legere: Yes. Well, a couple of things. I think you've seen this and you've commented on it in some of what you've written. The meaning -- the most meaningful pricing changes in Q1 were really seen as AT&T changing their pricing envelope versus Verizon, right? I mean, I think that's really what took place. And that's the confusing move that has taken place between these guys, not us. And I think, with what we've done with consumers, when you look at Contract Freedom and anytime upgrade and international data roaming and Tablet Freedom, these people are not sitting there waiting for a $10 price reduction from AT&T. It's not going to happen. And I think that's the learning that they've had, that it's not just an old game of people sitting, looking for what's the cheapest by $0.02. They're a detested provider by these consumers, and it's going to take a lot more. And as I said, so far, it was a very aggressive quarter. But as you said, they put changes in, they took changes out. I think that does more to confuse each other. And the game really, I think, right now, is between AT&T and Verizon with each other. I don't think Sprint's really playing right now. And I think they are comfortable with that statement. And I think that will continue for a while. But I think we're pretty pleased exactly where we are.

And we will take our final question from Amir Rozwadowski with Barclays. Amir Rozwadowski - Barclays Capital, Research Division: And just tailing on the prior question, John, on further consolidation could enable increased competition. I was wondering if you'd be able to share your thoughts on whether or not you think the regulatory agencies would be supportive of further consolidation in the wireless market. Clearly, as the prior question mentioned, the regulatory agencies seem to be supportive of what you folks are doing in the marketplace. And I would welcome any thoughts there. And whether or not you folks would be onboard and somehow supporting further consolidation, I don't know if there's anything that you could do to help enable that type of move. John J. Legere: Yes. I appreciate the question. And again, this is a very complex series of things that can't be looked at in isolation. And I think Chairman Wheeler and the FCC have their hands full on multiple topics. And I think we have to be careful to confuse any individual topic at a time when the attempt is -- and when the Chairman came in, his speech on day 1 and before day 1 was competition, competition, competition. That's what he wants. And in order to have competition, you need to handle the spectrum questions and the auctions that are required. And so to try to simultaneously look at the number of competitors and consolidations and the auctions on a forward-looking basis is a very complicated set of decisions. And I think you have to look at them all at once. Like how do we look at the type of number of competitors that create the best competition in the industry and simultaneously keep stability so that we can set rules and have successful auctions and let spectrum not be the variable that causes competition to cease to exist? So I think I understand clearly what he's trying to do and the timing of each of the variables. And I think we have to respect and fall into his portfolio of how that's done. But I do believe, ultimately, these could all be handled in a way that's best for consumers, where you can have a fair look at consolidation and the number of competitors that provide the best competition and then an auction process and a use of that set of proceeds to get the best competitive long-term situation. So that's the way I look at it. And I don't think you can do any one in isolation without running the risk of forcing one decision to be made in the broader envelope. So I think that's -- respectfully, I think the FCC has their hands full. And I think we need to work with them on all these questions simultaneously. Amir Rozwadowski - Barclays Capital, Research Division: Great, that's helpful. And just one other follow-up question around your network. I mean, clearly, you've got subscriber momentum in the marketplace for several quarters now, regardless of how we view sort of your guidance. But it does seem like the momentum probably doesn't subside any time soon. From a network perspective, with folks starting to increase data usage, trade up to higher data plans, how is your comfortability in terms of network quality and the type of investments you'll need to put into the network in order to support a lot more of this data traffic? John J. Legere: Well, I'll let Neville take that because he just woke up when you said the word network, and then I'll... Neville R. Ray: Who could sleep through this call, John? My goodness, a lot of great news. No, I think if you look at the network performance, we're just in a great spot. I mean, we've got great LTE out there today. I mean, the speeds in performance, the latencies on this network are second to none in the industry right now, which is tremendous. What we're doing is we're adding capability as every week goes by. We're adding density to this network on the LTE front. We're adding coverage breadth. We're adding speed enhancements with new backhaul. And most importantly, we're adding more and more spectrum to the T-Mobile network. As we accelerate the combination of the T-Mobile and Metro businesses, more and more spectrum is being put onto the T-Mobile network. So our growth position and our ability to support the growth, the great growth we have as a business at this point in time and as we look forward, is in a great place. I'm very confident with what we're delivering. We actually widened our gap on speed performance against the other big guys in the last month. So killed it in Q1, and we're widening the gap right now. So performance, I think customers are coming onto this network, some for the first time, and they're really surprised about the quality and capability that we've built here. And we have a strong path to increase and improve that performance as we move through this year. And as John mentioned and Braxton mentioned on the call, we now have the 700 MHz asset to start to deploy inside '14, bringing great coverage improvements in buildings, suburban fringe. So we continue to add to a great network story as we move through this year. So I'm very excited about what we have in front of us. And our ability to support the growth is extremely strong right now. John J. Legere: Okay. With that, thank you, everybody, for listening in. And we'll see you next quarter.

Ladies and gentlemen, this concludes the T-Mobile US First Quarter 2014 Conference Call. If you have any further questions, you may contact the Investor Relations department. Thank you for your participation. You may now disconnect, and have a pleasant day.