T-Mobile US, Inc. TMUS has become the first telecom carrier to activate nationwide 5G network, covering nearly 200 million Americans in more than 5,000 cities and towns. The company’s widely accessible and affordable 600 MHz 5G network is likely to give a run for money to larger rivals like Verizon Communications Inc. VZ and AT&T Inc. T with approval from the Federal Communications Commission (“FCC”) for its $26.5 billion megamerger with Sprint Corporation S.
The only nationwide 5G network boasts an investment of $30 billion for network improvements, 25,000 new towers and cell sites with network coverage of 1 million square miles across the United States. Covering 60% of the U.S. population, T-Mobile’s 5G coverage utilizes longer range low-band 600 MHz spectrum, offsetting the shortcomings of millimeter wave networks like limited range and poor obstacle penetration.
The third largest U.S. wireless carrier, backed by Deutsche Telekom AG, has offered two 5G-enabled smartphones — OnePlus 7T Pro 5G McLaren and Samsung Galaxy S10 5G. The service will be available to regular monthly subscribers and pay-as-you-go or prepaid customers at no extra cost. The network will also be accessible to T-Mobile’s prepaid wireless carrier brand, Metro, marking the first prepaid 5G offering in the country. The company plans to introduce 15 new 5G-compatible phones in 2020 to spur innovation and deliver transformational 5G future.
Current Market Scenario
After striving for more than a year, T-Mobile has finally received clearance from Department of Justice and FCC for its merger with Sprint. This was considered as a significant step in creating the New T-Mobile through which the company aims to bring robust competition to the 5G era. The combined company — New T-Mobile — will have about 127 million customers, a strong closing balance sheet and a fully funded business plan. It represents a total implied enterprise value of about $146 billion. T-Mobile’s innovative network expansion methodologies continue to be faster and technologically sounder, in an attempt to stay ahead of competitors. The U.S. wireless carrier offers the fastest network in the United States in terms of both download and upload speeds.
Markedly, the combination of the two networks would help to fill coverage gaps, create more jobs and provide enhanced 5G connectivity, leading the company to build new 5G infrastructure. The merged company would roll out 5G technology to 97% Americans, including 85% of rural locales. But the state litigators are concerned about competition in the greater telecom space, even as officials from each of the companies said the deal will keep a cap on prices for three years.
T-Mobile has long-term earnings growth expectation of 12.4%. T-Mobile’s shares have gained 22.1% compared with the industry’s growth of 16.9% year to date.
It currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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