When it comes to the consumer being financially stressed due to student loan payments resuming and interest rates rising, Sievert says the company is noticing, but not because of issues with customers paying their bills. Instead, Sievert argues there may be a "flight to value" that T-Mobile could benefit from.
Watch the video above to find out what Sievert has to say about the upcoming 2024 elections.
Double digit EBITDA growth, and of course, cash flow is up over 90% year over year on our way to this run rate, cash flow we've been talking about. So we're just in a great spot. And it shows that when you have the best network and the best value at the same time, customers respond.
Certainly, T-Mobile delivering cash flow performance that's all-time highs. It's $4 billion this quarter alone. So this is the 5G dividend. This is-- this is customers and businesses winning at the same time as a healthy, vibrant, but intensely competitive industry.
BRIAN SOZZI: So you don't need to discount?
MIKE SIEVERT: Well, you know, what's happening is customers are actually moving up our rate card voluntarily. Our Go5G Plus rate plan that we launched this year is part of our Phone Freedom Un-carrier offer is the most popular one we offer. So think about that. The highest end rate plan we offer is also our most popular. Customers come to T-Mobile because they want this network. So they buy the offers that give them the best of it.
BRIAN SOZZI: Talk to us a little bit about the finances of the company. So operating profits grew faster than sales, how does that continue to happen in a company like yours? Is that just the byproduct of the Sprint acquisition still playing out?
MIKE SIEVERT: Well, it certainly has been helpful. You know, synergies-- run rate synergies about $8 billion will be achieved by next year. And so that's really been a fantastic story. But what's happening is, of course, we're attracting some of the best customers in the industry. And as we grow, we get more and more operating leverage because some of the costs of a business like ours are fixed.
And so it's really turning out to be a fantastic story for our investors. As you know, last quarter we announced our first ever dividend. We're in the middle of a broad shareholder return program that we think it can be about $60 billion over the planning horizon. And then, you know, dividends that should increase on a per share basis year after year. So we're in a great spot where this company has achieved a level of scale, but the thing is the growth isn't slowing down. So we're affording our growth, you know, and delivering results at the same time.
BRIAN SOZZI: Don't push me off-camera when I ask you this question, Mike. So should you be viewed as a regular old telecom? Paying dividends, steady cash flow, and maybe growing profits by low single digit percentages.
MIKE SIEVERT: Well, again, cash flows. This quarter up 94% versus a year ago on the strength of the industry's best top line growth, industry's best customer growth, and we're plunging into new areas. We, again, delivered this quarter more broadband growth-- which is new for us-- sixth quarter in a row of having the industry's leading broadband growth, more than AT&T, Verizon, Comcast, and Charter combined.
BRIAN SOZZI: There's a lot coming at consumers in this country. The return of student loan payments, inflation is still omnipresent, do you see those stresses in your customer base?
MIKE SIEVERT: We sure do. And you know, it's not showing up in bad debt metrics. Customers are paying their bills reliably. In fact, T-Mobile customers pay their bills more reliably than our benchmark competitors, but there may be what's happening may be a bit of a flight to value. And that's great for T-Mobile.
You know, we're here to serve customers at lower prices. But at the same time, we offer the best network. And you know, when customers are feeling the pinch, they may ask themselves, do I have the right provider? Can I have the best of both if I look at T-Mobile. And for a lot of customers, the answer is yes.
BRIAN SOZZI: It's also a time of rising interest rates. We talk about this every single day on Yahoo Finance. Your company has debt. Does this environment change how you operate the company next year?
MIKE SIEVERT: Yeah, it does. You know, we actually announced at the same time, we announced our dividend program that we would move a little faster than planned to our target 2 and 1/2 leverage ratio. And we'll get there by next year from a 2.7 and change right now. So you know, we're managing our balance sheet accordingly with the rising cost of interest. But remember, we also are moving into more and more investment grades.
And so you know, two years ago, we were not investment grade, we achieved investment grade, and then got corporate family investment grade. So we're one of the only large issuers with a falling cost of capital because in the backdrop of a broad interest rate environment, we're getting more and more investment grade and realizing the benefits of that.
BRIAN SOZZI: This has been a big year for a company. I think I caught up with you around the All-Star Game. You were out there marketing for that. What are some of your priorities for 2024 to the extent you can share them today.
MIKE SIEVERT: Sure. You know, it's all about growing-- growing customers, taking share. We have so many under-penetrated audiences. This quarter, Q3, was the first time ever we achieved switching leadership in smaller markets in rural areas.
BRIAN SOZZI: That's people switching from other providers to you?
MIKE SIEVERT: Yeah. Share taking leadership for the first time in the 40% of America that's not the top 100 cities. That's amazing. You know, we started out as, you know, a distant number four there years ago, and now we were the number one share taker for the first time ever. Look at enterprise and government, where we have share in the low teens as opposed to 35%, 40% where you would expect us to be over time we said we'd get to 20% by 2025, and we're right on track.
So we have a number of places broadband where we're, you know, under-penetrated relative to what the best network and the best value should get us to, and so growth share taking and pursuing those under-penetrated markets.
BRIAN SOZZI: And look, Mike, next year we're going into election season. Do you think about that as a leader, and does that alter how you message things out there on the internet, or online, or on TV, do you think about those things now.
MIKE SIEVERT: Of course, I do. You know, it's interesting today it's so different than it was 5, maybe even 10, 5 years ago in that companies are expected to be forces for change and forces for good. You know, business can be one of the great platforms for societal improvement. And so we take our responsibilities, not just to shareholders, but to the broader community very seriously.
But you know, this is going to be a crazy political season. Our company serves people from all walks of life. So you won't take us-- see us taking political stands, but occasionally you may see us needing to take a values or morals-based stand.
BRIAN SOZZI: Lastly before I let you go, this is a challenging time for leaders, everything we've seen, of course, in the Middle East. Over the past two weeks, what has been your message to employees inside of T-Mobile when a lot of them I'm sure are uncertain about what might happen next and just in general?
MIKE SIEVERT: Well, I did reach out to employees about the conflict and about the violence that we saw happen. And you know, what I talked about was the chance for us to lift each other up. You know, we are a community of people that support each other, listen to each other, and lift each other up and some of our employees are hurting because of all this.
You know, this isn't just a news item for some of our employees. This affects families and loved ones and culture and heritage and tradition. And so being respectful, listening to each other, supporting each other as a small community is really important.
BRIAN SOZZI: All right. T-Mobile CEO, Mike Sievert, thanks for always being gracious with your time for Yahoo Finance. We appreciate it, and we'll talk to you next quarter.
MIKE SIEVERT: Great to see you.
BRIAN SOZZI: All right, I appreciate it. Guys, back to you.