Mike Sievert of T-Mobile is CNN Business CEO of the Year

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New York

Investors saw a lot of red in 2022. But a company known for its magenta logo was the darling of the stock market this year.

T-Mobile (TMUS) stock is up about 20% in 2022 even as rivals AT&T (T) and Verizon (VZ) tumble. Ma Bell is down about 2%, while Verizon (VZ) is down more than 25%.

T-Mobile is also now worth about $175 billion, more than Verizon and AT&T, both components of the Dow. T-Mobile’s solid performance on Wall Street was a big reason why CEO Mike Sievert is CNN Business’s choice for CEO of the Year.

Sievert beat several other competitors, including Michele Buck of Hershey (HSY), Vicki Hollub of Occidental Petroleum (OXY) and Arvind Krishna of IBM (IBM). He joins 2021 CEO of the Year Choice Albert Bourla of Pfizer (PFE) and previous winners Marc Benioff of Salesforce (CRM), CEO of Target (TGT) Brian Cornell and Brian Niccol of Chipotle’s (CMG).

T-Mobile had an impressive year despite many economic challenges, including inflation. The company continued to gain market share at the expense of its rivals.

It also spent more money to cover the country with greater 5G coverage and entered into some notable partnerships, including one with Elon Musk’s SpaceX, to try to win over more customers.

CNN Business caught up with Sievert about how T-Mobile has continued to perform well in a super-competitive business.

Sievert said the company is aware that “consumers are fearing inflation.” That’s why T-Mobile is trying to keep prices low, even as competitors have raised the cost of many of its plans because inflation has hurt its profitability.

T-Mobile CEO Mike Sievert talks with employees at a company event in 2022.

T-Mobile continues to cover the cost of Netflix (NFLX) subscriptions for its subscribers following the streaming media giant’s price increases.

“It’s just another example of how we’re making a big investment in customers, changing the industry in their favor, putting them first and investing in them,” said Sievert.

The strategy is working. T-Mobile, thanks to its merger with Sprint in 2020, is now the second largest wireless carrier in the US, ahead of AT&T and behind only Verizon.

The company has around 112 million customers and has been adding subscribers at a faster pace than its main rivals. A data breach in 2021, for which T-Mobile paid $350 million this year to settle class-action lawsuits, didn’t hurt growth either.

But there are some concerns. Sievert said inflation is among them, particularly for his employees. He explained that the company raised workers’ wages to compensate for rising prices. That led to higher expenses, but Sievert said T-Mobile is less concerned about inflation than other consumer companies.

“We are somewhat insulated from inflation,” he said, adding that T-Mobile’s average revenue per customer has increased this year, not because of price increases, but due to the fact that one of the company’s most popular plans is a highest price plan. service that offers more features.

Growing recession concerns are also an issue, although Sievert said that “we don’t see this as a foregone conclusion that a recession is coming. But we are prepared if it is.”

Sievert noted that wireless customers are likely to be very reluctant to reduce their phone usage even as the economy goes south. That could make any downturn next year less of a problem than the Great Recession of 2008-2009 was for cell phone companies.

“We are in a category that people will retain. This is very different from 2008, before the smartphone revolution. People will become attached to wireless,” he said.

It helps that wireless technology is also much more advanced now than it was 14 years ago. Sievert said T-Mobile was also able to capitalize on spending heavily on wireless spectrum auctions to populate its nationwide 5G coverage map.

“It’s about more devices able to connect customers with devices that serve all the purposes of their lives, including the rapid growth of 5G home broadband,” said Sievert.

“We feel very fortunate to have this massive multi-year lead in the 5G race in this category,” he noted, adding that T-Mobile was “bottom of the stick” in the 4G market not too long ago.

But AT&T and Verizon are also increasing their 5G coverage plans. And let’s be honest. There’s not much else to differentiate one wireless carrier from another. They all offer pretty much the same new and popular phones from Samsung (SSNLF) and the latest iPhone 14 from Apple (AAPL).

Enter SpaceX. T-Mobile announced a joint venture with Musk’s rocket launch company this year to use SpaceX’s Starlink satellites to offer wireless services in areas with little or no coverage.

“The idea of ​​being able to plug it in wherever you can see the sky is potentially groundbreaking,” Sievert said. “Now we are committed to creating a service together that will connect your cell phone directly to a satellite,” he said.

Sievert said he and Musk worked together “on multiple occasions” to get the deal done, adding that he was impressed with “how mission-driven Musk and the entire SpaceX leadership team are.”

“You can feel the passion when you’re talking to Elon or any senior person at SpaceX that they believe deeply in the importance of what they’re doing for humanity,” he said.

Sievert, who has been with T-Mobile since 2012, took over as CEO in 2020 from former CEO John Legere. Sievert might be a little less bombastic and flamboyant than Legere, who was known for teasing the competition, not to mention his rockstar hair and penchant for leather jackets.

Still, Sievert remains confident the company will continue to grow. To that end, he’s not concerned that cable companies are also trying to cash in on the wireless boom. Both Comcast (CMCSA) and Charter (CHTR) have agreements with Verizon to offer cellular service over Verizon’s network.

Sievert said he respects cable competition.

“These are very successful companies that seem very serious about space,” he said. “But I would rather be a mobile company using advanced 5G technology to challenge the cable space than the other way around.”

But Sievert isn’t too worried about hurting T-Mobile’s growth.

“Cable has been in the wireless business for years, and they’re seeing some success,” he said. But he added that he is more at the lower end of the market.

Instead, T-Mobile wants to keep trying to attract more subscribers willing to pay for premium packages. And Sievert said T-Mobile can do that by continuing to market itself as the so-called “non-carrier” unlike all its rivals. This includes heavy use of its prominent magenta logo.

Sievert even joked about the fact that Pantone just named Viva Magenta its color of the year.

“We are on trend for 2022 and 2023,” he said. “But this has been part of our imagination for a long time. And what we want people to see at a glance is that our company is a little different from everyone else. This is no tired, serious old telco. This is a technology company that is deeply passionate about what we do.”