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T-Mobile US Inc TMUS

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Morningstar’s Analysis

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T-Mobile Continues to Execute While Increased Competition Hits Growth; Shares Fairly Valued

Analyst Note

| Michael Hodel, CFA |

T-Mobile continued to perform well during the second quarter, though Verizon and AT&T’s efforts to bolster their market share were noticeable. Management again increased expectations for 2021, though not to an extent that significantly changes our outlook. The firm also discussed Dish’s new agreement with AT&T, stating that it already assumed Dish would move customers off the T-Mobile network in the coming years. As such, the loss of Dish wholesale revenue was already contemplated in the long-term expectations that management provided in March. We don’t believe loss of Dish radically alters T-Mobile’s strategic direction.

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Company Profile

Business Description

Deutsche Telekom merged its T-Mobile USA unit with prepaid specialist MetroPCS in 2013, creating T-Mobile US. Following the merger, the firm provided nationwide service in major markets but spottier coverage elsewhere. T-Mobile has spent aggressively on low-frequency spectrum, well suited to broad coverage, and has substantially expanded its geographic footprint. This expansion, coupled with aggressive marketing and innovative offerings, produced rapid customer growth. With the Sprint acquisition, the firm's scale now roughly matches its larger rivals: T-Mobile now serves 65 million postpaid and 21 million prepaid phone customers, equal to nearly 30% of the retail wireless market. In addition, the firm provides wholesale service to resellers like Tracfone.

Contact
12920 SE 38th Street
Bellevue, WA, 98006-1350
T +1 425 378-4000
Sector Communication Services
Industry Telecom Services
Most Recent Earnings Jun 30, 2021
Fiscal Year End Dec 31, 2019
Stock Type Speculative Growth
Employees 75,000

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