Legacy Segmentation Projects: Chudi Okoye

Legacy Segmentation Projects
Chudi Okoye
ME | Marketing, Pricing & Analytics T-Mobile Confidential

Project Time Data Used Data Frequency Data Status Location Statistics Deployment
Wireless 2015/16 Nielsen Mobile Survey Quarterly Still licensed Julie Liabraaten’s team K-Means
Segmentation & Insights for core Clustering,
Market segmentation Descriptives
Opportunity
Analysis Nielsen ConneXions, Mixed Annual No longer New data may be unavailable. Need to confirm
MRI, SMS, and licensed? status and location of legacy data
PrimeLocation for
profiling and geo-
mapping
Magenta People: T- 2016/17 Nielsen ConneXions Survey Quarterly No longer Not sure if still licensed. Need to verify status and Logistic,
Mobile Consumer licensed? location of legacy data Descriptives
Target Segment
Mobile Insights Survey Quarterly Still licensed Julie Liabraaten’s team
Value Segments 2017/18 Mobile Insights Survey Quarterly Still licensed Julie Liabraaten’s team Logistic,
Descriptives
Underpenetrated 2018/19 Merkle DataSource Mixed Annual Still licensed user_dw.TMO_Consumer_ALL_Attr_20180220 Decision
Segments: Pop and (Merkle pop data. Indivs ~240m; HHs ~127m) Tree, SQL,
Base Profiles Descriptives
user_dw.TMO_CONSUMER_ALL_ATTR_SUBSCRIBER
Base data _ACCT_20180220 (Merkle in TMO: HHs ~8m; Subs
~20m)
Profile of T-Mobile 2018/20 Merkle Mixed Annual Still SQL,
Multicultural Base DataSource licensed user_dw.Chudi_Merkle_Base_Combined (Merkle Descriptives
base with some TMO customer metrics: Subs ~8m)
Base data
ME | Marketing, Pricing & Analytics T-Mobile Confidential 2

Wireless Industry Magenta People Value Segments Underpenetrated Multicultural
Wireless 2015/16 Nielsen Mobile Survey Quarterly Still licensed Julie Liabraaten’s team K-Means
Segmentation & Insights for core Clustering,
Market segmentation Descriptives
Opportunity
Analysis Nielsen ConneXions, Mixed Annual No longer New data may be unavailable. Need to confirm
MRI, SMS, and licensed? status and location of legacy data
PrimeLocation for
profiling and geo-
mapping
Magenta People: T- 2016/17 Nielsen ConneXions Survey Quarterly No longer Not sure if still licensed. Need to verify status and Logistic,
Mobile Consumer licensed? location of legacy data Descriptives
Target Segment
Mobile Insights Survey Quarterly Still licensed Julie Liabraaten’s team
Value Segments 2017/18 Mobile Insights Survey Quarterly Still licensed Julie Liabraaten’s team Logistic,
Descriptives
Base data user_dw.TMO_CONSUMER_ALL_ATTR_SUBSCRIBER
_ACCT_20180220 (Merkle in TMO: HHs ~8m; Subs
Profile of T-Mobile 2018/20 Merkle Mixed Annual Still ~20m) SQL,
Multicultural Base DataSource licensed Descriptives
user_dw.Chudi_Merkle_Base_Combined (Merkle
Base data base with some TMO customer metrics: Subs ~8m)

Wireless Industry Magenta People Value Segments Underpenetrated Multicultural
Wireless 2015/16 Nielsen Mobile Survey Quarterly Still licensed Julie Liabraaten’s team K-Means Used for market
Segmentation & Insights for core Clustering, opportunity
Market segmentation Descriptives sizing/products
Opportunity and features/
Analysis Nielsen ConneXions, Mixed Annual No longer New data may be unavailable. Need to confirm offers/targeting
MRI, SMS, and licensed? status and location of legacy data /positioning/
PrimeLocation for messaging
profiling and geo-
mapping
Magenta People: T- 2016/17 Nielsen ConneXions Survey Quarterly No longer Not sure if still licensed. Need to verify status and Logistic, Used for market
Mobile Consumer licensed? location of legacy data Descriptives opportunity
Target Segment sizing/products
Mobile Insights Survey Quarterly Still licensed Julie Liabraaten’s team and features
Value Segments 2017/18 Mobile Insights Survey Quarterly Still licensed Julie Liabraaten’s team Logistic, Pre-post shifts/
Descriptives who/why/msg
Profile of T-Mobile 2018/20 Merkle Mixed Annual Still ~20m) SQL,
Multicultural Base DataSource licensed Descriptives
user_dw.Chudi_Merkle_Base_Combined (Merkle

Wireless Industry Magenta People Value Segments Multicultural Underpenetrated
Wireless 2015/16 Nielsen Mobile Survey Quarterly Still licensed Julie Liabraaten’s team K-Means Used for market
Segmentation & Insights for core Clustering, opportunity
Market segmentation Descriptives sizing/products
Opportunity and features/
Analysis Nielsen ConneXions, Mixed Annual No longer New data may be unavailable. Need to confirm offers/targeting
MRI, SMS, and licensed? status and location of legacy data /positioning/
PrimeLocation for messaging
profiling and geo-
mapping
Magenta People: T- 2016/17 Nielsen ConneXions Survey Quarterly No longer Not sure if still licensed. Need to verify status and Logistic, Used for market
Mobile Consumer licensed? location of legacy data Descriptives opportunity
Target Segment sizing/products
Mobile Insights Survey Quarterly Still licensed Julie Liabraaten’s team and features
Value Segments 2017/18 Mobile Insights Survey Quarterly Still licensed Julie Liabraaten’s team Logistic, Pre-post shifts/
Descriptives who/why/msg
Profile of T-Mobile 2018/19/ Merkle DataSource Mixed Annual Still licensed user_dw.TMO_Consumer_ALL_Attr_20180220 SQL, To assess base
Multicultural Base 20 (Merkle pop data. Indivs ~240m; HHs ~127m) Descriptives performance to
optimize offers
Underpenetrated 2018/19 Merkle DataSource Mixed Annual Still licensed ~20m) Decision
Segments: Pop and Tree, SQL,
Base Profiles user_dw.Chudi_Merkle_Base_Combined (Merkle Descriptives

1. Wireless Segmentation

Model Quality
Cluster Ratio

The Mobile Insights study provides in-depth understanding on mobile brands, usage, attitudes
Retail
Device
Brand Channel & Customer Churn &
Demos Level Usage Satisfaction
Performance Purchase Service Switching
Analysis
Drivers
• Awareness • Location of sign-up • Brand & model • Minutes • # of contacts in • Overall

• Age • Likelihood to switch
• Consideration • Reasons for visiting • OEM and Operating • Spend the last year • Network Quality
• HH Income • Have you switched
channel System consideration • Data application • When was the • Network coverage
• Race Ethnicity • Recommendation • Previous carrier
• Channel • Satisfaction with most recent • Price paid
• Willingness to pay a usage (e.g., SMS, • Reasons for
• Hispanic • Auto. system or
premium information sources phone social media, • Customer Service switching
Acculturation person
• Browsing and • Features used & streaming • Quality of additional
• Education • Type of Plan • Plan level switching
purchase activities desired audio/video, • Reason for
including prepaid, services • Drivers to switch
• Employment mobile banking, calling
All-You-Can-Eat, • Reasons for • Screen Size • Speed and Reliability
• Credit Proxy etc.) • # of calls to • Active likely
postpaid, voice and choosing device • Likelihood to upgrade • of mobile data
• Adults/Children in data plans Business vs. resolve issue switchers (vs.
• Device purchase • OEM and Operating transmission
personal use • Time on hold Passive)
Household • Perception of Best channel System loyalty • NFC and Barcode • Retention factors
• Marital status • OEM Brands • Sat with CS
• Smartphone Technology • Profile of switchers
• Gender considered penetration • Disconnects and
• Tablets, and MiFi, • Carrier brands
• Purchase drivers • Device feature Transfers
Data card and considered
• Reasons for capabilities and • Issue resolution
Mobile Hotspots
choosing carrier usage • Live Chat
• Carrier brands • OEM and Operating utilization and
considered System Next Device satisfaction
• Satisfaction with
retail experience

Segmentation Solution
 Five segments identified after several tests, namely:
1. Entrenched Majors
2. Budding Aficionados
3. Mobile Minimalists
4. Motivated Mid-Incomers
5. Mobile Enthusiasts
 Segmentation derived from two primary domains: Wireless behaviors and Demographics.
– Attitudinal data was not available for segmentation, but incorporated in post-hoc segment profiling
Wireless Behavior Demographics

• Wireless plan type (pre- or postpaid) • Age
• Tenure • Marital status
• Plan spend • Number of children
• Network preference (4G or older) • Number of adults
• Device type • Education
• Device spend • Employment Status
• DUP/EIP • Race/Ethnicity
• Upgrade timing • Income
• Device upgrade profile • Credit class
• Wireless service type (limited/ unlimited v/t/d) • Number of household occupants
• Service usage level • Urbanicity
• Data apps usage
• Overage status

This segmentation analysis identifies five core segments in the US
wireless market. It estimates the footprint of these segments within the
T-Mobile and Metro PCS customer base.
The result of this analysis indicates that T-Mobile attracts the most
engaged, though not necessarily the most profitable, wireless
consumers. In addition, T-Mobile segments exhibit fairly high switching
propensity.
This segmentation analysis identifies ways for T-Mobile to achieve

base diversification by providing specific recommendations to drive
retention and acquisition.

 The US wireless consumer market is well delineated into five actionable segments:
Entrenched Majors
 Demographics: Middle-age to older; mostly prime/near prime with high income; most are Caucasian with kids at home
21%  Mobile Engagement: Tech-engaged, primarily postpaid; high plan/device spend; DUP; network quality and price motivated
 High Indexing Carrier(s): Verizon
Budding Aficionados
 Demographics: Young - mainly 18-34; mostly subprime/near prime with low-to-mid income; high minority penetration
17%
 Mobile Engagement: Very high tech engagement, heavy usage, price-value oriented, DUP; strong new-to-wireless share
 High Indexing Carrier(s): T-Mobile, AT&T
Mobile Minimalists
 Demographics: Older – 55+; prime/near prime with low-to-mid income; mostly Caucasian with strong rural penetration
12%  Mobile Engagement: Very low tech, strong prepaid preference (PayGo plurality); low plan/device spend; price motivated
 High Indexing Carrier(s): Other (non-Tier 1)
Motivated Mid-Incomers
 Demographics: Middle-age to older; near prime with low-to-mid income; mostly Caucasian but strong minority; with kids
27%  Mobile Engagement: Low-to-mid tech, fair prepaid share (prefer unlimited prepaid); midlevel spend; DUP; price motivated
 High Indexing Carrier(s): Metro PCS, Other (non-Tier 1). Competitive space
Mobile Enthusiasts
 Demographics: Fairly young – 25-44; mainly near prime with high income; heavy minority penetration, with kids at home
24%
 Mobile Engagement: Strong tech, mostly postpaid; high spend; high DUP take-up; high switching ; price/network motivated
 High Indexing Carrier(s): T-Mobile
Note: Index compares segment share within carrier base to share within market base

Entrenched Budding Mobile Motivated Mobile
Majors Aficionados Minimalists Mid-Incomers Enthusiasts
Market
Middle-age to older Young - mainly 18-34 Older – 55+ Middle-age to older Fairly young – 25-44
Share
21 17 12 27 24
Mostly prime/near Mostly sub/near Prime/Near prime
% % % % prime
Prime/Near Mainly% near prime
prime with high prime with low-to- with low-to-mid
with mid income with high income
income mid income income
Demographics
Mostly Caucasian
Mostly High minority Mostly Heavy minority
with strong rural
Caucasian penetration Caucasian penetration
Basic
penetration
Kids at home: ◕ Kids at home: ◐ Kids at home: ◔ Kids at home: ◐ Kids at home: ●
Mid-to-high tech Very high tech Very low tech Low-to-mid tech Strong tech
engagement engagement engagement engagement engagement
Fairly strong prepaid
Primarily High family Strong prepaid Mostly postpaid with
(prefer unlimited
postpaid plan share (PayGo) preference family plan
plan)
Engagement
Plan/device spend: ● Plan/device spend: ◕ Plan/device spend: ◔ Plan/device spend: ◐ Plan/device spend: ●
Mobile
Moderate DUP Moderate-to-high Very low DUP Moderate DUP High DUP
take-up DUP take-up take-up take-up take-up
Usage level: ◕ Usage level: ● Usage level: ◔ Usage level: ◐ Usage level: ●
Verizon T-Mobile, AT&T; Metro PCS, Other T-Mobile
Tier2 prepaid
(Sprint/AT&T Strong new-to- Tier2. Competitive (Sprint/AT&T
Carrier
providers
Skew
to lesser extent) wireless share space to lesser extent)

ENTRENCHED BUDDING MOBILE MOTIVATED MOBILE
MAJORS AFICIONADOS MINIMALISTS MID-INCOMERS ENTHUSIASTS
Young - mainly 18-34 Fairly young – 25-44

Middle Age to Older Older – 55+ Middle Age to Older
Midscale Midscale-Upscale
Upscale Downscale Midscale
Singles and Couples Married
Demographics Married Married or Widowed Married
Some Kids at home: ◐ Kids at home: ●
Kids at home: ◕ Kids at home: ◔ Kids at home: ◐
High Minority Heavy Minority
Mostly Caucasian Mostly Caucasian Mostly Caucasian
Penetration Penetration
Watch Family/Kid
Country Lifestyles
Family Oriented Risk Takers movies
Belong to Some Domestic Travel
Lifestyle Enjoy Travel, Attend Sports Games Visit theme parks, water
Veterans Club Enjoy Art, Travel,
Entertaining Enjoy Music, Dancing parks
Gardening
Enjoy Travel, Music
Consult Doctor’s Care

Play in Fantasy Sports
Health & Wellness Exercise Regularly Follow a Diet Follow a Diet Exercise Regularly
League
Nutritionally Conscious Country Walks/Trail Take Vitamins Nutritionally Conscious
Play Sports for Exercise
Nutritionally Conscious
Brand Loyal
Shop at QVC, Land’s Brick & Mortar Shoppers
Online Shoppers Influenced by What’s Hot Impulsive Shoppers
Retail & Shopping End Shop at Rent-A-Center,
Shop at Ann Taylor, and What’s Not Brand Conscious
Catalog Shoppers Tractor Supply Company
Pottery Barn
Bank Online Bank Online Own Security Bank Online

Own Annuities and
Financial Have Real Estate, Stock, Have Personal, Student Investments Have Savings Bonds,
Mutual Funds
Security Investments Loans Plan for Retirement Mutual Funds
Tech Engagement
◕ ● ◔ ◐ ●

Share of US Wireless base 21% 17% 12% 27% 24%
Share
Share of T-Mobile base 18% 19% 7% 26% 29%
Share of MetroPCS base 13% 12% 8% 39% 28%
Median age (years) 50 31 64 48 37

Minority penetration 29% 37% 20% 30% 41%
Demos
High income household (over $75k p/a) 51% 40% 26% 32% 50%
Low income household (up to $35k p/a) 16% 31% 40% 34% 17%
Prime/Near Prime 87% 74% 77% 79% 84%
Low Prime 13% 26% 23% 21% 16%
Percent on family postpaid plan 54% 63% 29% 54% 57%

Percent on individual postpaid plan 30% 16% 25% 21% 21%
Plan Type
Percent on prepaid plan 12% 11% 46% 24% 17%

- PayDay/PayGo Prepaid (daily / by minute charge) 15% 27% 46% 12% 16%
- Monthly Prepaid 82% 66% 36% 85% 82%
Percent w/ unlimited voice, text & data (as reported) 28% 35% 8% 32% 37%
Percent using high-end phones 38% 30% 3% 30% 43%

Percent on DUP/EIP 19% 15% 3% 19% 29%
Switching Device/Use
Handset upgrade - 6 months or less 18% 13% 6% 14% 25%

Upgrader handset brand loyalty 77% 62% 64% 71% 63%
Relative Plan/device spend Very High Fairly High Very Low Mid-Level Very High
Usage level Fairly High Very High Very Low Mid-Level Very High
T-Mobile customers likely to switch (next 12 months) 11% 11% 7% 11% 20%
MetroPCS customers likely to switch (next 12 months) 14% 18% 12% 14% 22%
T-Mobile/MetroPCS non-customers likely to switch 11% 10% 7% 10% 18%
T-Mobile top-choice consideration (non-customer likely switchers) 11% 7% 6% 10% 9%
MetroPCS top-choice consideration (non-customer likely switchers) 2% 5% 3% 5% 3%
Data Source: Nielsen Mobile Insights (Q2 2015)

Significantly over- / under-indexed to market
● Significant and heavily over- / under- indexed
Share of US Wireless base 21% 17% 12% 27% 24%

Share of T-Mobile / MetroPCS bases 18% / 13% 19% / 12% 7% / 8% 26% / 39% 29% / 28%
Demos & Status

Percent Prime 41% 29% 41% 32% 30%
Low HH income composition (up to $35k p/a) 16% 31% 40% 34% 17%
High HH income composition (over $75k p/a) 51% 40% 26% 32% 50%
Minority penetration 29% 37% 20% 30% 41%
Urbanity More Urban More Urban More Rural More Rural More Urban
Median age 50 years 31 years 64 years 48 years 37 years
Likely to switch (next 12 months) 11% 10% 7% 11% 19%
T-Mobile non-customer consideration 11% 7% 6% 10% 9%
Handset Purchaser: Loyal Upgrader 77% 62% 64% 71% 63%
Device & Usage
Handset Purchaser: Recent Switcher 15% 15% 18% 18% 19%

Handset Purchaser: New to Wireless 9% 23% 19% 11% 18%
Percent on high-end/ultra high-end phones 38% 30% 3% 30% 43%
Percent likely to upgrade in 6 months or less 18% 13% 6% 14% 25%
Percent on DUP/EIP 19% 15% 3% ● 19% 29%
Percent on 4G network 71% 63% 6% ● 64% 73%
Percent w/ unltd. voice, text & data (as perceived) 28% 35% 8% ● 32% 37%
Percent on individual postpaid plan 30% 16% 25% 21% 21%
Plan Type
Percent on family postpaid plan 54% 63% 29% 54% 57%

Percent on prepaid plan 12% 11% 46% 24% 17%
●
- PayDay/PayGo Prepaid (daily / by minute charge) 15% 27% 46% ● 12% 16%
- Monthly Prepaid (<=$40 and >$40 combined) 82% 66% 36% ● 85% 82%
Data Source: Nielsen Mobile Insights (Q2 2015)
 Segmented the US wireless market to quantify the market opportunity and risk for T-Mobile and MetroPCS
Scope of  Leveraged existing syndicated data sets versus new custom research
1
Study • Nielsen Mobile Insights data for core segmentation
• Additional Nielsen assets for profiling and geo-mapping: MRI, SMS, ConneXions and PrimeLocation
 T-Mobile Segments: T-Mobile base over-indexes among Mobile Enthusiasts and Budding Aficionados. The least
indexed in T-Mobile base are Entrenched Majors and Mobile Minimalists.
 .
 Key profiles of the segments: T-Mobile high-index segments skew family and younger, minority, lower income,
largely coastal and urban. Price is the primary trigger for inbound switching from Verizon and AT&T.
Key
2  Churn and tenure may be a concern: Mobile Enthusiasts and Budding Aficionados (indexing high for T-Mobile)
Findings have the highest short-tenured base. A majority of Mobile Enthusiasts within T-Mobile base (51%) and Metro PCS
base (52%) are short-tenure customers (less than 2 years), compared to 28% of the same segment at Verizon and
39% for the industry as a whole.
 Ethnicity and churn: Hispanics and African Americans have higher churn rates and lower tenure than Asians and
Caucasians, especially at lower credit class levels.
 Market opportunity analysis: scenarios, volumes and sources of volumes.

Business
3
Deployments  Market risk analysis: At risk volumes and likely destinations.

 Provide guidance for several aspects including marketing communications, product development,
positioning, channel and pricing strategies

• Cell phone is a productivity tool for • Cell phone is an integral part of • Basic cell phone user; not heavily • Dependent on cell to stay • Early adopter
personal and professional life their social life engaged with technology and cell connected with friends and family • Willing to pay more for the latest,
• Heavy user of voice, data and • Cell phone is a source of features • Sophisticated users looking for ideal most advanced phones
Key Insights entertainment features entertainment • Low usage and extremely price balance of price and cost
sensitive
Friends and Family

Productivity Focus Basic Needs Plan Optimization
Helping you strengthen important Technology
Providing you a simple, affordable
Positioning Keeping your professional and relationships with your friends and
and dependable cell phone service
Keeping you connected with friends Equipping you with the most
personal life on track family and satisfying your mobile and family in the most sensible way technologically advanced devices
that fits your needs
entertainment needs
• Advanced devices with productivity •Socialization and entertainment • Focus on value plans (Prepaid or • Shared minutes plans with different • Most advanced devices and features
features device low-end postpaid) sizes and types of “networks” • Converged devices (communication,
• Promote Wi-Fi on the go (T-Mobile •Promote entertainment features • Simple, inexpensive phones with • Free in-network calls entertainment and productivity
Product & Hotspot) (music, games, wall papers, etc..) low start-up costs features)
Features
•Focus on personal and professional •Highlight different ways to •Promote inexpensive, simple plans • Emphasize plans as the most •Emphasis on latest technology and
organization and efficiency communicate via phone without messy contracts, features, economical choice handsets
or variety
Messaging •Emphasize advanced productivity
features
• Highlight easy way to stay
connected with friends and family
•Highlight device capabilities
• Integrated voice, data, •Bundled package with unlimited / •Heavily discounted or free phones – • Discounted, basic phone •Integrated voice, data and Hotspot
Hotspot/Data cards plans high number of minutes and highlighting their basic functionality • Largest “circle” of free calls; earlier plans
Offer • Employee business discounts “social” data plans and overall reliability nighttime calling •Do not need to offer the heaviest
discounts

2. Magenta/Purple People Segmentation
TMUS Consumer Target Segment

 TMO and Metro over-index on 37 of 53 ConneXions segments
 Magenta and Purple overlap on 18 of the 37 segments (includes 12 Purple People SMEs & 6
SMMs)
“Common Market”
“Magenta Land” Techs and the City
Generation WiFi Gearing up
Time Shifters Cyber strivers
The Pragmatics Big City, Small Tech`
Core (8)
SMEs (12)
You & I Tunes Calling Circles
Cinemaniacs Digital Dreamers “Purple Land”
WiFi Warriors IM Nation Landline Living
Bundled Burbs New Technorati Discounts & Deals
Plugged-in Families Video Vistas The Unconnected
Cyber Sophisticates Tech Nesters Last to Adopt
Stretch (6)
Gadgets Galore Kids & Keyboards SMMs (4)

Smart Gamers Multimedia Families
Technovators New kids on the Grid
SMMs (6)
Broadband Boulevards Video Homebodies
High-Tech Society Leisurely Adopters
Opting Out Plug & Play
Techtown Lites
Antenna Land
Text Legend: Media Target Segments; Non-Media Target Segments

Data Source: Nielsen Mobile Insights

The Magenta People construct was based on similar methodology used to develop Metro’s Purple People
Data Input
Obtain T-Mobile customer and prospect lists from relevant
databases and triangulate with Mobile Insights*
Develop Magenta Core

Identify Nielsen ConneXions segments indexing high as
Magenta People using index and base share criteria1
Develop Magenta Stretch

Include other Nielsen ConneXions segments which meet the
supplementary rule based on share of gross adds2
Overlap Reduction
Reduce Magenta/Purple People overlap3
Magenta
People
DEMOGRAPHICS TECHNOLOGY MOBILE ATTITUDE LIFESTYLE SOCIAL MEDIA
1
A ConneXions segment is identified as Magenta Core if (a) the segment meets a threshold index of 120 when comparing that segment’s share within
T-Mobile customer base to its share of industry base; or (b) the segment scores a minimum index of 110 AND has at least 2% share of T-Mobile base
2
A segment is identified as Magenta Stretch if T-Mobile has gross adds share (SoGA) within that segment that is >= T-Mobile’s overall SoGA
3
A segment overlapping as Magenta and Purple is assigned as primary target to the cohort with >= 60% share of the segment based on a logistic model
(variables used for model: gender, age, ethnicity, income, credit status, education, employment, wireless plan type, number of lines, wireless spend)
Note: Leveraging Nielsen Mobile Insights adds wireless deep-dive and enables individual-level target profiling
ConneXions
Aspirational Magenta Common Purple

Targets People Market People
Purple Primary
Magenta Magenta Magenta Shared Purple
(If Low-
Stretch Primary Secondary Targets Secondary
Scale)
Cyber You & I Techs and Discounts &
Plug & Play Gearing Up
Sophisticates Tunes the City Deals
Gadgets Calling Digital The

Time Shifters Opting Out
Galore Circles Dreamers Unconnected
Smart Multimedia Big City, Landline

Cinemaniacs
Target as Magenta if mid-scale or higher

Gamers Families Small Tech Living
WiFi Video
Technovators IM Nation Last to Adopt
Warriors Homebodies
Broadband Bundled Leisurely

Video Vistas Adopters
Boulevards Burbs
High-Tech The Cyber Techtown
Society Pragmatics Strivers Lites
Generation Antenna New kids on
WiFi Land the Grid
Plugged-in
Families
Target as Purple if low-scale
Kids &
Keyboards
Tech Nests
New
Technorati
Text Legend: Original Purple People SMEs and SMMs
Note: A segment overlapping as Magenta and Purple is assigned as primary target to the cohort with >= 60% share of the segment based on a
logistic model
Consumer status (low- or mid-scale+) determined by: income, credit status, education, employment, number of lines and wireless spend

Axes scores are indices of ConneXions segments derived in analysis of Magenta People and Purple People
“Purple Land” “Common Market”
“New Frontier” “Magenta Land”
Segment Key: Magenta Media Magenta Stretch Magenta Non-Media Purple Secondary Purple Primary Common Market Non-Target
Data Source: Nielsen SMS data, BCMI Analysis/Depiction Bubble area depicts segment market size, scaled to 10%


Magenta Magenta Magenta Purple Common Non- Industry Magenta Media
Source: Nielsen Mobile Insights. Q2 2016 Media Stretch Non-Media People Market Target Base Highlights
Population Size of US Population Aged 13+ (M) 57.2 31.2 12.8 47.5 39.1 80.8 268.7
Wireless Share Percent of Industry Base 21% 12% 5% 18% 15% 30% 100%  Majority are female
Male 47% 53% 49% 44% 44% 52% 48%
Gender
Female 53% 47% 51% 56% 56% 48% 52%
13 - 34 years 43% 31% 41% 38% 42% 25% 35%
Age 35 - 54 years 39% 31% 35% 31% 32% 25% 31%  Over 2 in 5 are under 34 years old
> 55 years 17% 37% 24% 31% 25% 50% 33%
White 62% 70% 59% 51% 53% 80% 65%
Ethnicity
Hispanic 17% 11% 18% 21% 23% 8% 15%  More likely to be Minority than low-
Black/African American 10% 7% 14% 20% 15% 6% 11%
Asian/Pacific Islander 8% 9% 5% 3% 5% 3% 5% tech non-target
< $50k 24% 15% 32% 62% 48% 34% 37%
50k-75k 19% 15% 23% 14% 21% 19% 18%
Income
75k-100k 17% 15% 16% 7% 11% 14% 13%
100k + 32% 46% 23% 10% 14% 25% 24%  Under a quarter earn less than $50K vs.
Prime 38% 49% 36% 21% 26% 42% 36%
Credit Groups
Subprime 62% 51% 64% 79% 74% 58% 64% 62% for Purple People
Employment Full-time 54% 48% 51% 34% 44% 32% 41%
Top 25 Urban 52% 60% 46% 39% 46% 28% 42%
Location Pop 40K+
Rural
45%
3%
38%
2%
51%
3%
56%
5%
50%
4%
53%
19%
50%
8%
 Less subprime than Purple People
Kids Percent with kids 51% 39% 41% 43% 47% 30% 41%
Education Ass/BA/BS degree or greater 62% 67% 57% 38% 47% 55% 54%  Has strong employment level
Phone Type Smartphone penetration 93% 90% 90% 85% 88% 80% 86%
Apple share of smartphone base 43% 47% 35% 23% 30% 33% 35%
Handset Brand
Samsung share of smartphone base 29% 26% 30% 31% 32% 30% 30%
 Is primarily urban dwelling
Mobile Substitution Percent of HHs using only wireless 54% 37% 50% 54% 52% 37% 46%
Low monthly service plan price 47% 48% 50% 54% 52% 54% 51%
 Has strong presence of kids
Reason for Current
Carrier Selection Voice network coverage 52% 55% 49% 45% 45% 64% 55%
Data network reliability 45% 45% 45% 36% 39% 51% 44%  Has high smartphone penetration, with
Family Plan Percent on postpaid family plan 62% 68% 55% 39% 50% 58% 55%
Lines Mean number of lines 2.64 2.82 2.59 1.84 2.2 2.16 2.3 high mobile substitution
Spend Mean spend $120.77 $130.93 $121.02 $70.16 $99.12 $99.82 $100.61
Population Estimates: Based on www.census.gov -
http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?src=bkmk
 Offers: Differentiate offers based on Magenta segment profiles and preferences to improve market response
 Acquisition: Use for improved targeting in DM campaigns to drive response rate, lift and ROI
 Retention: Apply in customer analytics for better understanding of pain points within base to mitigate potential deacts
Marketing
A Usage
 Cross sell: Improve understanding of incremental needs within base to help drive less risky cross sell initiatives
 Local: Better understand local market Magenta opportunity and improve trade area analyses
 Media buying: Refine media plan against specific Magenta segments, nationally or in specific markets
 Brand tracking: Incorporate in weekly brand tracking and MLS reports
 Add Magenta construct to brand equity and media mix modeling

Marketing
B Support
 Incorporate Magenta in CLV modeling to maximize profitable targeting
 Map to trade area analysis to inform retail location strategy
Beyond
C Marketing
 Incorporate in propensity modeling to drive network investment

 Magenta Stretch already comprise a sizeable share of T-Mobile base (11% similar to industry)
 Verizon dominates the Magenta Stretch base (45% postpaid, 41% blended), but not so much gross
adds (30% postpaid, 26% blended)
 Magenta Stretch make up a sizable share of Verizon and AT&T likely switchers (13%); T-Mobile is
top consideration for a significant proportion of Magenta Stretch likely switchers (17%)
 Like other segments, Magenta Stretch are strongly value-driven in carrier selection, although they
also place premium on network reliability
 Magenta Stretch are affluent, upscale, tech savvy and spend the most on wireless
 Magenta Stretch tend to be fairly loyal, but more likely to leave due to poor network experience
 Improving T-Mobile’s Magenta Stretch composition could help as bulwark against growing prepaid
threat
Magenta Media Target Age
• Current media buying target skews millennial: 18-34
• Magenta media target includes 18-34 (43%) and 35-54 (39%), suggesting a different buying skew
• Decision needed to change media buying age skew to 18-49
Media Messaging Focus

• Media team is considering audience differentiated messaging around network vs. demand gen
• This requires investment in more affluent and slightly older segments as aspirational targets
• Decision needed to incorporate “aspirational affluents” in media targeting
Magenta Non-Media Target

• Magenta non-targets are similar to Metro Purple People targets but they also skew postpaid
• Metro’s prepaid-specific messaging might not attract Magenta non-targets preferring postpaid
• Guidance needed on treatment of potentially at-risk Magenta non-targets
DMA Target text

• DMAs rank differently as Magenta markets by index vs. size
• Markets with the highest Magenta index are not always ones with the highest population
• Guidance needed on criteria to prioritize in market selection

3. Cross-Plan Switching and Value Segments

We adopted a multi-step approach to developing the value segmentation used in this analysis:
Step I: Descriptive Classification

 Descriptively created a target segmentation variable using ordinal ranges for HH income and spend, and discrete
categories for geo-location
− Used ordinal income thresholds <=$50k/<=$75k/<=$100k/$100k for descriptive classification, with ranges staggered by plan
(postpaid vs. prepaid) and geo-location
− From survey data, estimated line level ARPU by carrier and plan type and applied in target segmentation syntax
Step II: Membership Propensity Scoring

 Developed multinomial logistic model scoring subscribers for membership of the target segmentation created from
descriptive analysis (as above)
− Input variables: Used ordinal ranges of wireless spend and income, along with geo-location, and plan type (individual line
postpaid, family plan, prepaid, corp. liable)
− Additional logistic input variables: Used consumer tenure with carrier and consumer’s overall wireless industry tenure
The value segment analysis in this report was based on the final segmentation results

Segmentation Postpaid Prepaid
Mean Mean
Income Mean Income Mean
Value Target Analysis Urban Suburba Income Income Monthly Urban Suburba Income Income Monthly
$50k to Number $50k to Number
Segments Segments % n % <=$50k
$100k
$100k+
of Lines
Wireless % n % <=$50k
$100k
$100k+
of Lines
Wireless
Spend Spend
Young Millennial 49% 35% 71% 29% 0.2% 3.83 $127.38 47% 38% 78% 17% 5% 2.83 $64.12
Older Millennial 55% 33% 59% 40% 0.4% 3.41 $125.58 46% 38% 74% 22% 4% 2.19 $53.53
Gen X w/ Kids
Price 56% 37% 53% 47% 0.5% 3.39 $154.31 52% 41% 70% 23% 7% 2.41 $59.10
10+
Shopper Gen X w/o Kids
56% 38% 57% 43% 0.8% 2.75 $122.18 50% 43% 73% 21% 6% 1.67 $44.14
10+
55+ 56% 30% 62% 37% 1.1% 2.39 $95.02 50% 34% 69% 25% 6% 1.30 $28.82
Young Millennial 24% 50% 72% 28% 0.0% 2.66 $188.18 34% 39% 81% 15% 4% 1.28 $65.62
Older Millennial 30% 45% 53% 47% 0.0% 2.19 $169.03 30% 47% 72% 23% 4% 1.22 $64.35
Gen X w/ Kids
Value 24% 62% 46% 54% 0.0% 2.78 $193.62 23% 66% 68% 23% 9% 1.31 $64.20
10+
Optimizer Gen X w/o Kids
26% 62% 51% 49% 0.0% 2.09 $153.73 27% 63% 71% 23% 6% 1.11 $49.84
10+
55+ 21% 51% 53% 47% 0.0% 2.09 $141.85 22% 54% 69% 24% 6% 1.11 $44.63
Young Millennial 42% 41% 3% 27% 71% 4.01 $169.29 30% 38% 13% 37% 50% 2.62 $61.51
Older Millennial 49% 39% 1% 34% 65% 3.14 $153.10 39% 34% 4% 45% 51% 2.02 $80.94
Premium Gen X w/ Kids 46% 48% 0% 26% 74% 3.36 $185.98 50% 38% 3% 36% 61% 2.60 $73.82
10+
Shopper Gen X w/o Kids
46% 49% 1% 26% 73% 2.88 $156.43 37% 44% 4% 41% 55% 1.62 $45.97
10+
55+ 37% 43% 3% 30% 67% 2.65 $145.71 26% 35% 8% 45% 47% 1.36 $33.00
Source: Nielsen Mobile Insights, US, Q215 to Q216

 Cross-plan switching is growing slightly in the US market, marked mainly by the conversion of
Key individual postpaid plan to prepaid
1 Trends  Metro and Cricket attract the largest share of inbound post-to-pre switchers; T-Mobile over-indexes
on pre-to-post switcher SoGA
 Plan switchers are mainly value-oriented, with price given as the primary (though not exclusive)
Profiles & reason for choosing a new carrier
2 Motivations  Postpaid-to-prepaid switchers: skew older, are less Caucasian, less educated, less fulltime-employed,
tilt more subprime, and have lower income than proto-postpaid switchers
Prepaid  Prepaid brand perception has steadily improved in recent time, probably helping to drive post-to-
3 Perception pre switching
Sprint  Sprint %age contribution to Metro’s inbound gross adds has doubled since the Sprint attack
4 Attack campaign, growing from 7% to 15%

 Cross-plan switching has grown slightly, but mainly as individual postpaid converting to prepaid
 More of prepaid gross adds remain within the prepaid category versus converting to postpaid
 Postpaid to Prepaid switching appears to have picked up in recent months
 Price Shoppers dominate post-to-pre switching, but Value Optimizer interest has increased
 Cross-plan switching makes up a small but notable component of industry switching, more prominently within Tier II carrier base
 Among Top 4, T-Mobile and AT&T show slightly higher vulnerability, possibly due to having strong prepaid brands (Metro and Cricket)
 Among Big 4, T-Mobile has the highest percent of in-brand plan switchers (11%) changing from individual postpaid to prepaid
 T-Mobile has even stronger Big 4 lead (at 37%) among individual postpaid subs switching to corporate brand prepaid
 This dynamic could be intensified by TMO One, and is potentially ARPU dilutive – though possibly margin accretive
 AT&T and Verizon contribute 58% of post-to-pre plan/carrier switchers, vs 18% by T-Mobile
 Metro and Cricket are the primary destinations of post-to-pre switchers, jointly accounting for 51%

 T-Mobile and AT&T contribute more pre-to-post switchers than their share of prepaid base
 T-Mobile’s share of outbound pre-to-post switchers is higher than its share of postpaid base; Verizon is less
4. Multicultural Profiling

 Study assesses T-Mobile multicultural base (Hispanics, African Americans and Asians), comparing it to
Scope of Caucasians on: base penetration, demographics, credit status, churn and tenure, number of lines, margin and
1 lifetime value.
Study
 It leverages Merkle population data joined with T-Mobile’s unit economics and account history data.
 Base penetration is high: Multicultural penetration of T-Mobile base is far higher than multicultural share of
competitive base.
 .
 Credit status is mixed: Asians have the highest prime base of any ethnic group, but Hispanics and African
Americans trail Caucasians on prime composition.
Key
2 Findings on  Churn and tenure may be a concern: Hispanics and African Americans have higher churn rates and lower tenure
Multicuturals than Asians and Caucasians, especially at lower credit class levels.
 But economics are attractive: On the whole, Multiculturals have fairly compelling economics; Asians and
Hispanics in particular have more lines per account, better margins, and hence higher CLV than Caucasians.
 Drivers: Churn and tenure vary more by credit class; margin by number of lines; and CLV by both.
 Report finds ethnicity to be an important differentiator of customer value, if mediated by such factors as number
Conclusions & of lines, credit status, age, urbanicity, and so on.
3
Recommendations
 Multicultural targeting should skew towards prime and multiple lines to drive stickiness and higher value.

 Multicultural groups dominate T-Mobile postpaid base with a combined share of 55% versus 42% White
share
— T-Mobile’s multicultural penetration over-indexes US penetration by 24 ppts and more than doubles competitive penetration
 Whites have a dominant share of competitive base: versus T-Mobile, greater by 34 ppts at VZ and 25 ppts at
AT&T US Adult Population and Ethnic Share Postpaid Base Penetration: TMO vs. Competition
Merkle Pop Merkle Pop Percent T-Mobile Verizon AT&T Sprint
180,000,000
154.3m 70% 80% 76%
64%
160,000,000 70%
60% 67%
140,000,000
60%
50% 54%
120,000,000
Population Share
50%
100,000,000 New model 40% 42%
corrects 40%
80,000,000 2018 pop 30%
29%
37.4m 30%
60,000,000 27.3m
21%
10.5m 20%
20% 17%
40,000,000 16% 15% 15%
11% 10% 10% 11%
10% 10%
20,000,000 7%
4% 6% 5%
4%
0 0% 0%
Hispanic African American Asian White Hispanic African American Asian White
Combined Multicultural Penetration of Base (Hispanic, African American, Asian)
TMO Postpaid Merkle Competitive Postpaid

Base Base Base
Source: Merkle, EDW & HarrisX Mobile Insights
5. New/ Underpenetrated Segmentation

Overall Cust
Sample Prob: 5.1%
Node Node Rules Customer Index

%
1 if SPOKEN_LANGUAGE_bkt IS ONE OF: SPANISH, OTHER AND Mega_Internet_Use < 0.5 or MISSING AND HH_size_bkt2 < 3.5 or MISSING AND Age_bkt2 <= 6 18.0% 3.53
2 if SPOKEN_LANGUAGE_bkt IS ONE OF: SPANISH, OTHER AND Mega_Internet_Use >= 0.5 AND HH_size_bkt2 < 3.5 or MISSING AND Age_bkt2 <= 6 13.0% 2.55
3 if SPOKEN_LANGUAGE_bkt IS ONE OF: SPANISH, OTHER AND HH_size_bkt2 >= 3.5 AND Age_bkt2 <= 2 16.0% 3.14
4 if SPOKEN_LANGUAGE_bkt IS ONE OF: SPANISH, OTHER AND HH_size_bkt2 >= 3.5 AND Age_bkt2 <= 6 AND Age_bkt2 >= 3 or MISSING 10.0% 1.96
5 if SPOKEN_LANGUAGE_bkt IS ONE OF: ENGLISH or MISSING AND Merkle_Spending_Velocity_bkt < 2.5 AND Dwelling_Type IS ONE OF: H or MISSING AND Age_bkt2 <= 6 6.0% 1.18
6 if SPOKEN_LANGUAGE_bkt IS ONE OF: ENGLISH or MISSING AND Merkle_Spending_Velocity_bkt < 2.5 AND HH_size_bkt2 < 2.5 or MISSING AND Dwelling_Type IS ONE OF: S, U, L, A AND Age_bkt2 <= 6 5.0% 0.98
if SPOKEN_LANGUAGE_bkt IS ONE OF: ENGLISH or MISSING AND Merkle_Spending_Velocity_bkt < 2.5 AND HH_size_bkt2 >= 2.5 AND Dwelling_Type IS ONE OF: S, U, L, A AND Density IS ONE OF: SUBURBAN_FRINGE,
7 SUBURBAN_CORE, URBAN, URBAN_CORE or MISSING AND Age_bkt2 <= 6 4.0% 0.78
if SPOKEN_LANGUAGE_bkt IS ONE OF: ENGLISH or MISSING AND Merkle_Spending_Velocity_bkt < 2.5 AND HH_size_bkt2 >= 2.5 AND Dwelling_Type IS ONE OF: S, U, L, A AND Density IS ONE OF: RURAL OR SMALL_TOWN
8 AND Age_bkt2 <= 6 3.0% 0.59
9 if SPOKEN_LANGUAGE_bkt IS ONE OF: ENGLISH or MISSING AND Merkle_Spending_Velocity_bkt >= 2.5 or MISSING AND Density IS ONE OF: RURAL OR SMALL_TOWN AND Age_bkt2 <= 6 5.0% 0.98
10 if SPOKEN_LANGUAGE_bkt IS ONE OF: ENGLISH or MISSING AND Merkle_Spending_Velocity_bkt >= 2.5 or MISSING AND Density IS ONE OF: URBAN, URBAN_CORE AND Age_bkt2 <= 6 10.0% 1.96
11 if SPOKEN_LANGUAGE_bkt IS ONE OF: ENGLISH or MISSING AND Merkle_Spending_Velocity_bkt >= 2.5 or MISSING AND Density IS ONE OF: SUBURBAN_FRINGE, SUBURBAN_CORE or MISSING AND Age_bkt2 <= 2 11.0% 2.16
if SPOKEN_LANGUAGE_bkt IS ONE OF: ENGLISH or MISSING AND Merkle_Spending_Velocity_bkt >= 2.5 or MISSING AND HHINC IS ONE OF: 12, 08, 10, 11, 09 AND Density IS ONE OF: SUBURBAN_FRINGE, SUBURBAN_CORE
12 or MISSING AND Age_bkt2 <= 6 AND Age_bkt2 >= 3 or MISSING 6.0% 1.18
if SPOKEN_LANGUAGE_bkt IS ONE OF: ENGLISH or MISSING AND Merkle_Spending_Velocity_bkt >= 2.5 or MISSING AND HHINC IS ONE OF: 01, 05, 04, 07, 03, 06, 02 or MISSING AND Density IS ONE OF: SUBURBAN_FRINGE,
13 SUBURBAN_CORE or MISSING AND Age_bkt2 <= 6 AND Age_bkt2 >= 3 or MISSING 7.0% 1.37
if Merkle_Spending_Velocity_bkt < 1.5 AND Electronics_bkt IS ONE OF: Y, UNKNOWN or MISSING AND Density IS ONE OF: SUBURBAN_FRINGE, SUBURBAN_CORE, URBAN, URBAN_CORE or MISSING AND Age_bkt2 >= 7 or
14 MISSING 2.0% 0.39
if Merkle_Spending_Velocity_bkt >= 1.5 or MISSING AND Electronics_bkt IS ONE OF: Y, UNKNOWN or MISSING AND Density IS ONE OF: SUBURBAN_FRINGE, SUBURBAN_CORE, URBAN, URBAN_CORE or MISSING AND
15 Age_bkt2 >= 7 or MISSING 3.0% 0.59
16 if Merkle_Spending_Velocity_bkt < 1.5 AND Electronics_bkt IS ONE OF: Y, UNKNOWN or MISSING AND Density IS ONE OF: RURAL OR SMALL_TOWN AND Age_bkt2 >= 7 or MISSING 1.0% 0.20
17 if Merkle_Spending_Velocity_bkt >= 1.5 or MISSING AND Electronics_bkt IS ONE OF: Y, UNKNOWN or MISSING AND Density IS ONE OF: RURAL OR SMALL_TOWN AND Age_bkt2 >= 7 or MISSING 2.0% 0.39
18 if HHINC IS ONE OF: 07, 12, 08, 06, 09, 10, 11 AND Electronics_bkt IS ONE OF: N AND Density IS ONE OF: SUBURBAN_CORE, URBAN, URBAN_CORE or MISSING AND Age_bkt2 >= 7 or MISSING 1.0% 0.20
19 if HHINC IS ONE OF: 04, 05, 03, 01, 02 or MISSING AND Electronics_bkt IS ONE OF: N AND Density IS ONE OF: SUBURBAN_CORE, URBAN, URBAN_CORE or MISSING AND Age_bkt2 >= 7 or MISSING 2.0% 0.39
20 if Mega_Internet_Use < 0.5 AND Electronics_bkt IS ONE OF: N AND Density IS ONE OF: RURAL OR SMALL_TOWN, SUBURBAN_FRINGE AND Age_bkt2 >= 7 or MISSING 1.0% 0.20
21 if Mega_Internet_Use >= 0.5 or MISSING AND Electronics_bkt IS ONE OF: N AND Density IS ONE OF: RURAL OR SMALL_TOWN, SUBURBAN_FRINGE AND Age_bkt2 >= 7 or MISSING 1.0% 0.20

Overall Cust
Sample Prob: 5.1%
Node Node Rules Customer % Index

9 if SPOKEN_LANGUAGE_bkt IS ONE OF: SPANISH, OTHER AND HH_size_bkt2 <= 3 or MISSING AND Electronics_bkt IS ONE OF: Y AND Age_bkt2 <= 6 12% 2.35
10 if SPOKEN_LANGUAGE_bkt IS ONE OF: SPANISH, OTHER AND HH_size_bkt2 <= 3 or MISSING AND Electronics_bkt IS ONE OF: N, UNKNOWN or MISSING AND Age_bkt2 <= 6 17% 3.33
11 if SPOKEN_LANGUAGE_bkt IS ONE OF: SPANISH, OTHER AND HH_size_bkt2 >= 4 AND Age_bkt2 <= 2 16% 3.14
13 if SPOKEN_LANGUAGE_bkt IS ONE OF: SPANISH, OTHER AND Merkle_Spending_Velocity_bkt <= 2 AND HH_size_bkt2 >= 4 AND Age_bkt2 <= 6 AND Age_bkt2 >= 3 or MISSING 8% 1.57
14 if SPOKEN_LANGUAGE_bkt IS ONE OF: SPANISH, OTHER AND Merkle_Spending_Velocity_bkt >= 3 or MISSING AND HH_size_bkt2 >= 4 AND Age_bkt2 <= 6 AND Age_bkt2 >= 3 or MISSING 11% 2.16
if SPOKEN_LANGUAGE_bkt IS ONE OF: ENGLISH or MISSING AND Merkle_Spending_Velocity_bkt <= 2 AND HH_size_bkt2 <= 3 or MISSING AND Density IS ONE OF: SUBURBAN_CORE, URBAN, URBAN_CORE or
19 MISSING AND Age_bkt2 <= 6
6% 1.18
if SPOKEN_LANGUAGE_bkt IS ONE OF: ENGLISH or MISSING AND Merkle_Spending_Velocity_bkt <= 2 AND HH_size_bkt2 >= 4 AND Density IS ONE OF: SUBURBAN_CORE, URBAN, URBAN_CORE or MISSING
20 AND Age_bkt2 <= 6
5% 0.98
if SPOKEN_LANGUAGE_bkt IS ONE OF: ENGLISH or MISSING AND Merkle_Spending_Velocity_bkt <= 2 AND HH_size_bkt2 <= 2 or MISSING AND Density IS ONE OF: RURAL OR SMALL_TOWN,
21 SUBURBAN_FRINGE AND Age_bkt2 <= 6
4% 0.78
if SPOKEN_LANGUAGE_bkt IS ONE OF: ENGLISH or MISSING AND Merkle_Spending_Velocity_bkt <= 2 AND HH_size_bkt2 >= 3 AND Density IS ONE OF: RURAL OR SMALL_TOWN, SUBURBAN_FRINGE AND
22 Age_bkt2 <= 6
3% 0.59
if SPOKEN_LANGUAGE_bkt IS ONE OF: ENGLISH or MISSING AND Merkle_Spending_Velocity_bkt >= 3 or MISSING AND Mega_Internet_Use IS ONE OF: 1 AND Density IS ONE OF: RURAL OR SMALL_TOWN AND
25 Age_bkt2 <= 6
4% 0.78
if SPOKEN_LANGUAGE_bkt IS ONE OF: ENGLISH or MISSING AND Merkle_Spending_Velocity_bkt >= 3 or MISSING AND Mega_Internet_Use IS ONE OF: 0 or MISSING AND Density IS ONE OF: RURAL OR
26 SMALL_TOWN AND Age_bkt2 <= 6
6% 1.18
if SPOKEN_LANGUAGE_bkt IS ONE OF: ENGLISH or MISSING AND Merkle_Spending_Velocity_bkt >= 3 or MISSING AND Density IS ONE OF: SUBURBAN_FRINGE, SUBURBAN_CORE, URBAN, URBAN_CORE or
27 MISSING AND Age_bkt2 <= 2
12% 2.35
if SPOKEN_LANGUAGE_bkt IS ONE OF: ENGLISH or MISSING AND Merkle_Spending_Velocity_bkt >= 3 or MISSING AND Density IS ONE OF: URBAN, URBAN_CORE AND Age_bkt2 <= 6 AND Age_bkt2 >= 3 or
29 MISSING
9% 1.76
if SPOKEN_LANGUAGE_bkt IS ONE OF: ENGLISH or MISSING AND Merkle_Spending_Velocity_bkt >= 3 or MISSING AND Density IS ONE OF: SUBURBAN_FRINGE, SUBURBAN_CORE or MISSING AND Age_bkt2
30 <= 6 AND Age_bkt2 >= 3 or MISSING
7% 1.37
if Merkle_Spending_Velocity_bkt <= 1 AND Electronics_bkt IS ONE OF: Y, UNKNOWN or MISSING AND Density IS ONE OF: SUBURBAN_FRINGE, SUBURBAN_CORE, URBAN, URBAN_CORE or MISSING AND
35 Age_bkt2 >= 7 or MISSING
2% 0.39
if SPOKEN_LANGUAGE_bkt IS ONE OF: SPANISH AND Merkle_Spending_Velocity_bkt >= 2 or MISSING AND Electronics_bkt IS ONE OF: Y, UNKNOWN or MISSING AND Density IS ONE OF: SUBURBAN_FRINGE,
37 SUBURBAN_CORE, URBAN, URBAN_CORE or MISSING AND Age_bkt2 >= 7 or MISSING
4% 0.78
if SPOKEN_LANGUAGE_bkt IS ONE OF: ENGLISH, OTHER or MISSING AND Merkle_Spending_Velocity_bkt >= 2 or MISSING AND Electronics_bkt IS ONE OF: Y, UNKNOWN or MISSING AND Density IS ONE OF:
38 SUBURBAN_FRINGE, SUBURBAN_CORE, URBAN, URBAN_CORE or MISSING AND Age_bkt2 >= 7 or MISSING
3% 0.59
39 if Merkle_Spending_Velocity_bkt <= 1 AND Electronics_bkt IS ONE OF: Y, UNKNOWN or MISSING AND Density IS ONE OF: RURAL OR SMALL_TOWN AND Age_bkt2 >= 7 or MISSING 1% 0.20
40 if Merkle_Spending_Velocity_bkt >= 2 or MISSING AND Electronics_bkt IS ONE OF: Y, UNKNOWN or MISSING AND Density IS ONE OF: RURAL OR SMALL_TOWN AND Age_bkt2 >= 7 or MISSING 2% 0.39
43 if Mega_Internet_Use IS ONE OF: 1 or MISSING AND Electronics_bkt IS ONE OF: N AND Density IS ONE OF: SUBURBAN_CORE, URBAN, URBAN_CORE or MISSING AND Age_bkt2 >= 7 or MISSING 2% 0.39
44 if Mega_Internet_Use IS ONE OF: 0 AND Electronics_bkt IS ONE OF: N AND Density IS ONE OF: SUBURBAN_CORE, URBAN, URBAN_CORE or MISSING AND Age_bkt2 >= 7 or MISSING 1% 0.20
45 if Mega_Internet_Use IS ONE OF: 1 or MISSING AND Electronics_bkt IS ONE OF: N AND Density IS ONE OF: RURAL OR SMALL_TOWN, SUBURBAN_FRINGE AND Age_bkt2 >= 7 or MISSING 1% 0.20
ME46 if Mega_Internet_Use IS ONE OF: 0 AND Electronics_bkt IS ONE OF: N AND Density IS ONE OF: RURAL OR SMALL_TOWN, SUBURBAN_FRINGE AND Age_bkt2 >= 7 or MISSING
| Marketing, Pricing & Analytics T-Mobile Confidential 1% 0.2050
 Study identifies consumer segments currently underrepresented in T-Mobile base
(mirrors findings in Feb SLT deck).
Scope of
1 Study
 It leverages Merkle population data, joined with T-Mobile’s unit economics, and it is
complemented by Mobile Insight data to provide refinements to the segmentation.
 T-Mobile is primarily underpenetrated among Caucasians under 55 years of age residing

in rural areas and small towns and in high-income non-rural areas (greater than $100k) –
these groups split into four segments.
Key
2 Findings
 The couple segments have slightly better margins and CLV than T-Mobile base.
 Opportunity also exists to offer AVDs to potential customers working with select
companies in under-penetrated areas to increase sales while minimizing dilution from
intrinsic customers
Source: HarrisX Mobile Insights

 Relative to the market, T-Mobile is underpenetrated among single Caucasians under 55 in both rural and non-
rural areas National Base, Qualified Base, Segment Sizes and Penetration
Chart Title
Unqualified Segments TMO/Qualified Base Index
National HHs Without Network/Distribution 104%
300.0
63%
250.0 55%
47%
Base in Millions
43%
200.0 2.2 2.8 2.1 3.5
150.1
89.5
150.0
239.56
100.0 139.5
50.0
0.0 Total Qualified Base Non-STR Caucasian High Non-STR Caucasian High STR Caucasian Single STR Caucasian Couple Other
National
National HHBase
Base Without
Without Network
Network/Distribution
or Distribution Income Single Income Couple
(red)
Non-STR Caucasian Single Non-STR Caucasian Couple
STR Caucasian Single STR Caucasian Couple Other
High Income High Income
Penetration Index
47% 63% 43% 55% 104%
(Segment Avg. / Population Avg.)
Size (Individuals/Adults) 2.2M 2.8M 2.1M 3.5M 139.5M
Age Less than 55 yrs old Mixed
Ethnicity Caucasian Mixed
Household Size (Adults) Single Two Single Two Mixed
Urban, Suburban core, Urban, Suburban core, Suburban Rural, Small Town, or Rural, Small Town, or
Geographical Density Mixed
Suburban fringe fringe Greenfield Greenfield
Household Income (Median) More than $100K More than $100K Any Any Mixed
Source: Merkle/IDW
Merkle DataSource

DataSource is Merkle’s aggregated
consumer and business data asset
DataSource leverages
analytics to mine data
DataSource aggregates the variables and create DataSource empowers
best-of-the-best data from powerful derived elements profitable marketing
dozens of sources allowing for targeting decisions
and segmenting
audiences effectively

Wealth
Transactional indicators Real property Social media
Mortgage data Syndicated Direct integration
cooperative data handles/flag
research data with Facebook,
Summarized s / social
Twitter, AOL,
Lifestyle / credit statistics Segmentation influence
Cookie Google, Rentrak, etc
behavioral Life events & triggers Systems
New movers synchronized
(examples) Merkle mega, Syndicated to
New homeowners Automotive data for display to
New parents Mosaic derived & Oracle/Bluekai,
& summarized PRIZM standard & custom
Demographics Tri-bureau credit models propensity RocketFuel, Google,
auto statistics CAMEO audiences
variables Adobe, AOL
30+ 2500+ Daily new Direct linkage keys with Monthly new 95%+ 90-95%
major data selectable data movers Audience Platforms & homeowners coverage of all match rates on data
sources elements Datalogix/Oracle U.S. households overlay applications
129MM 275MM 500MM 475MM 130MM 291MM 75MM

households validated individuals email phones vehicles IP addresses social
across 2+ sources (18+ years old) addresses handles/flags
Data Enrichment | Phone Append | Reverse Phone Append | E-append | Reverse E-append | eCOA | Onboarding |
Applications
Market Sizing | Lists / Audience Selection | Segmentation | Predictive Modeling | Syndication | Real-time Marketing

e
Offlin
Online
Dig
ital
What We Source: How We Source: How We Use It:

• Demographic and • Multisourcing • Customer enhancement
psychographic data • Data agnostic • Segmentation
• Self-reported data • Diagnostic • Market sizing
• Cooperative data • Custom built • Prospect targeting
• Specialty lists & Triggers • Analytic driven • 1st and 3rd party data
• Online behavioral data onboarding
• Industry Suppressions
• Segmentation Systems

Merkle DataSource Variable Pre-Test:
Analytics Guidance for Merkle (by C. Okoye)

 Analysis Objective
— The objective of this test is to assess the extent to which the T-Mobile-licensed variables in Merkle DataSource (DS) can each, as individual
predictors, differentiate likely T-Mobile customers from non-customers among US consumers, based on current T-Mobile membership
— Merkle will perform the test using the guidance provided herein (this guide is based on SAS 9.4 which is the engine for Merkle’s analytics tool)
 Target Variable
— As there is no standing variable in DataSource to indicate T-Mobile membership, Merkle should create a target variable flagging current T-Mobile
customers by matching current-customer Household_ID from T-Mobile database back to DataSource records
— A target variable should be created, with successful matches (T-Mobile customers) coded as (1) and non-matches (non-customers) coded as (0)
— Merkle should use this new customer membership variable as the target variable in the test, after confirming match rate to T-Mobile
 Sample
— The overall sample for the test should be 150k, comprising 24k T-Mobile customers and 126k non-customers, in line with T-Mobile’s market share
— To achieve the above split against the expected match rate, Merkle should obtain an initial pull of 500k (80k T-Mobile and 420k non-customers)
• The initial T-Mobile customer pull (80k) should be randomly selected, and specified as 90% postpaid and 10% prepaid to reflect T-Mobile base split
• Once secured, the T-Mobile pull should be matched to DataSource records and then combined with the random sample of non-customers (420k)
— Merkle should build the final sample dataset from the over-sampled pull, and review this with T-Mobile before proceeding with the test
 Descriptive Analysis
— Once test sample is set, Merkle should run initial descriptive analyses to obtain the distributions of valid and missing cases for each DS variable
• For categorical variables: obtain the distinct values, count for each category and number/percentage of missing values
• For continuous variables: obtain the distributions, distinct values and number/percentage of missing values
— Merkle should send the descriptive analyses results to T-Mobile for review and further guidance before proceeding with the test
Merkle should use the following steps to prepare the DataSource variables for test modelling:
A: Categorical Variables
 SAS 9.4 offers some options to specify the method of parameterization and reference category for logistic models, the most common being effect coding
 Merkle should use the effect coding method to create dummies for each categorical variable, creating k-1 dummies for each variable (where k=number of
levels contained within each categorical variable)
— Merkle should specify the effect coding parameterization and reference category for each variable using the CLASS statement in SAS along with the PARAM=EFFECT and
PARAM=REF REF=“<referencename>” options in the logistic step (note that effect coding is also the default in SAS and will be selected automatically even if the
PARAM=EFFECT option is not specified)
 Merkle should create a single dummy variable for all the missing cases
 For all categorical variables, Merkle should perform a weight of evidence (WOE) transformation and obtain the information value (IV) estimate for each
variable using the SAS proc hpbin procedure (WOE = LN(% of non-events ➗ % of events), and IV = ∑ (% of non-events - % of events) * WOE)
B: Continuous Variables
 Merkle should transform all continuous variables into bins, taking the following steps:
1. Create a single dummy variable for all the missing cases for each variable (the proportion of missing cases will be known from the descriptive analysis)
2. Bin all remaining valid cases, with the bins generated by grouping records into deciles (such that the total number of bins = % of valid cases ➗ 10)
• For example, if a continuous variable has 90% valid cases, Merkle should specify nine bins using the SAS proc rank procedure and specify groups=9 in the program
3. Once the bins for valid cases are created, Merkle should explore the distributions and, if extreme skewness is detected, use the SAS proc transreg power transformation
procedure to optimize the scaling and reduce skewness, so as to improve the predictive power of the variable
 As with categorical variables, Merkle should also perform weight of evidence transformation and obtain the information value estimate for each
variable, again using the SAS proc hpbin algorithm but this time with the SAS numbin option

Methodology
 Once data transformations are completed, Merkle should commence the actual test modeling, testing all DataSource variables one at a time
 For the testing model, we recommend ROC Curve analysis using logistic regression; this will generate an AUC (area under the curve) score indicating the
ability of each variable to classify between our target binary values (customers and non-customers) – see Appendix for more on this
 Merkle should run an initial test for each variable including all the dummies created for that particular variable, generating a single AUC; after the initial run, a follow-up
test should be run eliminating statistically insignificant dummies: the AUC from this re-run should be documented as the comparative score for the variable
 The following example shows the program steps required to produce the ROC Curve output, among others (separate runs for age and income):
Age Income
*/ Data creation (actual step will use server data);
data MerkleTest;
input customer income age;
datalines;
0 140 25
0 200 35
0 190 45
0 180 55
1 120 65
0 190 45
1 180 55
1 120 65
0 190 45
0 180 55
1 120 65
1 170 75;
*/Logistic step specifying ROC output;
ods graphics on;
proc logistic data=MerkleTest
plots(only)=(roc(id=obs)effect);
model customer=age / scale=none
clparm=wald
clodds=pl
rsquare
ctable
lackfit;
units age=10;
run;
ods graphics off;

 In our example on the preceding slide, SAS produced the ROC Curve, with an AUC score (.971 for age and .914 for income); this is the type of score
that Merkle should report
 Acceptable AUC scores range from .5 to 1, but the lower the score the less predictive the variable. The following ranges may be used as a suggested
guide (though final cut-offs will depend on actual results):
— .8 to 1 = Excellent
— .6 to .8 = Good
— .5 to .6 = Poor
 SAS will not produce the data for the ROC curve (i.e. the coordinates of sensitivity and specificity) automatically; this can be generated by specifying:
— outroc=ROCTable (this outputs a table named “ROCTable” with columns for sensitivity and specificity)
 Merkle should generate a classification table to provide data that we can use to perform further model evaluation analysis such as accuracy tests:
— Merkle should specify the ctable option in the logistic step to generate an actual-by-predicted classification table, using the pprob= option to specify the probability
levels for the classification table: pprob= (0.5, 0.6, 0.7, 0.8, 0.9, 1) should be specified
— Merkle can also generate a classification table (confusion matrix) by specifying the PREDPROBS=INDIVIDUAL option in the OUTPUT statement (e.g. output
out=<outputfilename>), and then use the PROC FREQ statement in reference to the output file (data= <outputfilename>) to generate the confusion matrix. However,
we recommend the ctable option since it allows for multiple levels of probability to be specified.
 As additional measures of model performance, Merkle should generate the gain and lift statistics to estimate and report the following metrics:
1. “Positive Lift/Gain %” to show the cumulative proportion of predicted true positives gained in the propensity deciles with higher lift scores than the random baseline
2. “Cumulative Lift” representing the combined lift estimate for propensity deciles with higher lift scores than the random baseline
 Merkle will need to use the SAS GainLift macro to generate the lift and gain statistics in logistic regression, as there is seemingly no standard
procedure for this in Base SAS
— Merkle can download the macro text file for this procedure from here, and if necessary they can review and become familiar with the analytic process here
• Some guidance to Merkle analyst, if it helps: Save the macro to a location on your desktop and then do a %inc ‘location of macro code.sas’; or run it before the data step. Then to
invoke the macro you call %gainlift(arguments as needed)
 Finally, Merkle should obtain other test statistics in the model output, including: likelihood ratio test results, AIC (Akaike information criterion), SC
(Schwarz criterion), Wald, R2, Hosmer-Lemeshow, and Gini Co-efficient (this can be calculated manually from the AUC: GiniCoeff = 2*AUC-1)
Summary Report & Model Outputs
 T-Mobile expects Merkle to deliver a summary report covering the key statistics for each of the tested DataSource variables.
 The summary report should be delivered as an Excel spreadsheet with the following columns:
RO Positive Sig.
Variable Population Gini Information Cumulative Likelihood Odd Ratio Profile
Name Coverage CA Value Lift/Gain Lift (p- C-Statistic AIC SC Ratio
Wald
Likelihood Estimate
Coefficient
UC % value)
MS0001
MS0002
MS0003
MS1000
 T-Mobile also expects Merkle to send over all the key model outputs from SAS. We recognize that this could be cumbersome. As such, we
will work with Merkle as testing progresses to determine which specific outputs T-Mobile will require.
 Merkle should set up a call or onsite visit to review the results with T-Mobile after they have delivered the report.

Chart 1: Test Distributions
ROC Curve (for further reading see: here1, here2, here3, here4, here5, here6, here7, here8, here9 and also here10)
 For this test, T-Mobile recommends the use of the Receiver Operating Characteristic Curve (ROC Curve) method, a logistic regression procedure which estimates the predictive function of
input variables in a binary classification. ROC analysis is used to quantify how accurately diagnostic tests (or systems) can discriminate between two outcomes. As stated in the literature,
ROC curve is based on the notion of a "separator" scale, on which results for the target outcome form a pair of overlapping distributions. The complete separation of the two underlying
distributions implies a perfectly discriminating test while complete overlap implies no discrimination (see Chart 1 to the right, zoomed out in next slide).
 ROC curve is based on signal testing theory. It is a fundamental tool for diagnostic test evaluation in which the true positive rate (Sensitivity) is plotted as a function of the false positive rate (1-Specificity)
for different cut-off points of a parameter. The ROC curve shows the trade off between the true positive fraction (TPF) and false positive fraction (FPF). Each point on the ROC curve represents a
sensitivity/specificity pair corresponding to a particular decision threshold. ROC curve corresponding to progressively greater discriminant capacity of diagnostic tests are located progressively closer to the
upper left hand corner in "ROC space“. An ROC curve lying on the diagonal line reflects the performance of a diagnostic test that is no better than chance level. ROC curve is equal to the ratio of the two
density functions describing the distribution of the separator variable in the outcome populations, i.e. the likelihood ratio. Chart 2: Confusion Matrix
 According to the literature that I reviewed, ROC analysis has in the past few decades become a popular method for evaluating the
accuracy of diagnostic tests. Some argue that the most desirable property of ROC analysis is that the accuracy indices derived from it
are not distorted by changes in arbitrarily chosen decision criteria or cut-offs. As such, it tends to be largely accurate and stable.
 The Area Under the Curve (AUC) is the summary measure of accuracy derived from ROC Curve analysis. It assesses the effectiveness
of a given variable to discriminate between two binary populations, in our case: likely TMO customers vs. non-customers. It valuates
the sorting efficiency of a classifier. If two tests are to be compared, it is desirable to compare the entire ROC curve rather than any of
its particular points. The AUC summarizes the entire ROC curve rather than its specific points. The AUC is considered an effective
combination of sensitivity and specificity, the two primary measures of diagnostic validity. Using the AUC as a measure of diagnostic
performance, we can compare individual tests or determine if various test combinations can improve diagnostic accuracy.
 Arguably, the AUC is of great interest because it has meaningful interpretation. The AUC can be interpreted as the probability that a
randomly chosen subject is rated or ranked as more likely on some outcome than a randomly chosen subject without that outcome.
That is, the AUC of a classifier (i.e. a test model) is equal to the probability that the classifier will assign a higher score to a randomly Chart 3: ROC Area Under the Curve (AUC)
chosen positive example than to a randomly chosen negative example. As the literature states, this specific interpretation is based on
Sensitivity (True Positive Rate)

nonparametric Wilcoxon-Mann-Whitney test (U) statistics that is used in calculating AUC (AUC=U/n1n2). Another interpretation is
rve
that the AUC is the average value of sensitivity for all the possible values of specificity. Either way, an index like the AUC is especially C Cu
useful in comparison of diagnostic tests. RO 0. 5
UC=
 nA
In theory the AUC ranges from 0 to 1, but its effective baseline is 0.5. The maximum AUC=1 means that the diagnostic test is perfect ti o
ina
in the differentiation between the target outcome and the non-target outcome. This happens when the distribution of test results for im
scr
targets and non-targets do not overlap. AUC=0.5 implies chance discrimination, represented by the diagonal line in ROC space (see Di
om
nd
Chart 3). Higher AUC scores, represented by curves sloping closer to the upper left hand corner, indicate higher discrimination. Ra
 The AUC is equivalent to C Statistic (Concordance statistic, a.k.a. C-Index). It is also related to Gini Coefficient (measure of inequality
or dispersion).The AUC/Gini relation is represented in the following equations: AUC=(GiniCoeff+1)/2, and GiniCoeff=2*AUC-1.
 While running an ROC analysis, any of the many coefficients and statistical tests associated with logistic regression can be obtained.
1-Specificity (False Positive Rate)
We suggest that Merkle generate such outputs as additional metrics to assess the performance of the test models.

Sample Test Distributions
Source: http://cancerdiscovery.aacrjournals.org/content/3/2/148
Source: Wikipedia

DataSource Variable Test Results
Test performed by Merkle

 Analysis Objective
— The objective of this test was to estimate the utility of individual Merkle DataSource variables as potential predictors for a T-Mobile customer-
targeted segmentation of US consumers
 Tested Variables
Merkle Source Count — T-Mobile does not have access to the entire Merkle
Number of Tested Premium DataSource Variables 1,011 DataSource variables, only the few that have been
Number of Premium DataSource Variables dropped due to missing threshold of 85% 77 onboarded to the MDB platform. As such, Merkle
Total Tested and Untested Premium DataSource Variables 1,088
Number of Tested Core DataSource Variables 224 analysts were engaged to perform this variable test
Number of Core DataSource Variables dropped due to missing threshold of 85% 142
Total Tested and Untested Core DataSource Variables 366 — Merkle ended up testing the entire set of variables in
Number of Tested Marketplace DataSource Variables 40
Number of Marketplace DataSource Variables dropped due to missing threshold of 85% 0 their master database, including the premium list and
Total Tested and Untested Marketplace DataSource Variables 40 other stand-alone set not in their primary database
Number of Tested DataSource Variables 1,275
Number of Marketplace DataSource Variables dropped due to missing threshold of 85% 219 — Merkle had a total of 1,494 variables from the
Total Tested and Untested DataSource Variables 1,494
aggregated databases; after applying an 85% missing
value filter, 219 were dropped and 1,275 were tested
 Sample
Test Sample Percent Count TMUS Sample Percent Count
Prospect 77.6% 116,400 T-Mobile 70% 23,520
TMUS (TMO & 22.4% 33,600 MetroPCS 30% 10,080
Metro) Total TMUS Sample 100% 33,600
Total Test Sample 100% 150,000
 We have several metrics with which to evaluate the variables. Some evaluate goodness of the model, some assess independent variable and dependent variable
correlations, some assess significance, and some assess the actual predictive power of the variables
 Among the actual predictors, some like Wald are parametric so should probably not be used
 This leaves us mainly with AUC, IV, Lift/Gain, and Gini to evaluate the variables; AUC and IV are the most important
 To evaluate, we need to isolate from the rest the 100+ variables that are already loaded into IDW and deployable in segmentation model
 We’ve worked with Merkle to identify the onboarded 100+ in their variable test output, but for a variety of reasons, they can only match 48 of the 122 variables (39.3%)
 For this reason, we recommend the following approach for the immediate segmentation input:
 Retain the ad-hoc segmentation (10 segments) input variables if they meet the theoretical threshold of 0.5 AUC
— Age
— HH Income
— Presence of Children
 Incorporate additional variables from the cohort of onboarded 100+ , if they meet the threshold of 0.65 AUC and/or 0.3 IV, as long as test result was statistically significant
— Ethnicity
— Urbanicity
— HH spending/wireless spend
 For the remaining 100+ cohort not in the Merkle test, load them into the segmentation and have the model evaluate their utility
 Beyond the immediate segmentation build, specify additional inputs as follows:

 Incorporate a variable if it meets the threshold of 0.65 AUC and/or 0.3 IV
 If a variable does not meet the above threshold, incorporate if it is included in Crystal’s of Lubov’s shortlist
 Work with the architecture team and Merkle to onboard the additional variables
 Update segmentation after the next batch of variables have been onboarded

6. Proposed Segmentation Schemes
Unfinished business…

 Proposed approach:
— Follow an incremental, test and learn approach to ensure cross-team alignment
 Variable test
— Determine the relationships among input variables and assess the predictive power of input data against named
targets (targets = TMO Membership in MDB and Likelihood to Switch in MI)
 Magenta membership segmentation

— Logistic model using curated characteristics of TMO base to identify potential targets in the broader market
versus likely non-customer types
 Behavioral segmentation
— Leverages advanced algorithm and wide range of demographic, behavioral and psychographic variables to
build market-level segmentation

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Legacy Segmentation Projects

ME | Marketing, Pricing & Analytics T-Mobile Confidential

ME | Marketing, Pricing & Analytics T-Mobile Confidential 2

ME | Marketing, Pricing & Analytics T-Mobile Confidential 3

ME | Marketing, Pricing & Analytics T-Mobile Confidential 4

ME | Marketing, Pricing & Analytics T-Mobile Confidential 5

ME | Marketing, Pricing & Analytics T-Mobile Confidential

ME | Marketing, Pricing & Analytics T-Mobile Confidential 8

• Awareness • Location of sign-up • Brand & model • Minutes • # of contacts in • Overall

ME | Marketing, Pricing & Analytics T-Mobile Confidential 10

Wireless Behavior Demographics

ME | Marketing, Pricing & Analytics T-Mobile Confidential 11

This segmentation analysis identifies ways for T-Mobile to achieve

ME | Marketing, Pricing & Analytics T-Mobile Confidential 12

ME | Marketing, Pricing & Analytics T-Mobile Confidential 13

to lesser extent) wireless share space to lesser extent)

ME | Marketing, Pricing & Analytics T-Mobile Confidential 14

Young - mainly 18-34 Fairly young – 25-44

Consult Doctor’s Care

Bank Online Bank Online Own Security Bank Online

ME | Marketing, Pricing & Analytics T-Mobile Confidential 15

Median age (years) 50 31 64 48 37

Percent on family postpaid plan 54% 63% 29% 54% 57%

Percent on prepaid plan 12% 11% 46% 24% 17%

Percent using high-end phones 38% 30% 3% 30% 43%

Handset upgrade - 6 months or less 18% 13% 6% 14% 25%

Data Source: Nielsen Mobile Insights (Q2 2015)

Share of US Wireless base 21% 17% 12% 27% 24%

Demos & Status

Handset Purchaser: Recent Switcher 15% 15% 18% 18% 19%

Percent on family postpaid plan 54% 63% 29% 54% 57%

 Market opportunity analysis: scenarios, volumes and sources of volumes.

ME | Marketing, Pricing & Analytics T-Mobile Confidential 18

Entrenched Budding Mobile Motivated Mobile

Friends and Family

ME | Marketing, Pricing & Analytics T-Mobile Confidential 20

ME | Marketing, Pricing & Analytics T-Mobile Confidential

Gadgets Galore Kids & Keyboards SMMs (4)

Text Legend: Media Target Segments; Non-Media Target Segments

ME | Marketing, Pricing & Analytics T-Mobile Confidential 25

Develop Magenta Core

Develop Magenta Stretch

DEMOGRAPHICS TECHNOLOGY MOBILE ATTITUDE LIFESTYLE SOCIAL MEDIA

Aspirational Magenta Common Purple

Gadgets Calling Digital The

Smart Multimedia Big City, Landline

Target as Magenta if mid-scale or higher

Broadband Bundled Leisurely

ME | Marketing, Pricing & Analytics T-Mobile Confidential 28

“Purple Land” “Common Market”

“New Frontier” “Magenta Land”

ME | Marketing, Pricing & Analytics T-Mobile Confidential 29

 Brand tracking: Incorporate in weekly brand tracking and MLS reports

 Add Magenta construct to brand equity and media mix modeling

ME | Marketing, Pricing & Analytics T-Mobile Confidential 32

Media Messaging Focus

Magenta Non-Media Target