VALUATION HIGHLIGHTS

1. Postpaid Mobile Plans & Phones constitute 81% of the Trefis price estimate for T-Mobile's stock.
2. Prepaid Mobile Plans & Phones constitute 11% of the Trefis price estimate for T-Mobile's stock.

WHAT HAS CHANGED?

Latest Earnings: Q4 Fiscal Year 2025

T-Mobile reported a robust fourth quarter, with total revenue reaching $24.33 billion, an 11.2% increase year-over-year, which surpassed analyst expectations of $24.18 billion. Diluted earnings per share (EPS) for the quarter stood at $1.88, while adjusted EPS of $2.14 beat the consensus estimate of $2.04 by nearly 5%. The performance was primarily driven by industry-leading customer growth, including 2.4 million postpaid net additions, and a 10% surge in service revenues. Despite the beat, net income was impacted by approximately $293 million in severance and reinvestment costs related to the company's workforce transformation initiative.

Note: T-Mobile's FY'25 ended on December 31, 2025.

Broadband Expansion and Strategic Fiber JVs

During its February 2026 Capital Markets Day, T-Mobile aggressively raised its long-term broadband targets, now aiming for 18 to 19 million total broadband customers by 2030. This strategy is anchored by its 5G Fixed Wireless Access (FWA) leadership and a growing pivot toward fiber through strategic joint ventures with partners like Lumos and Metronet. The company expects its fiber footprint to reach up to 15 million homes passed by the end of the decade, effectively transitioning T-Mobile from a pure-play wireless carrier into a diversified broadband powerhouse.

POTENTIAL UPSIDE & DOWNSIDE TO TREFIS PRICE

Below are key drivers of T-Mobile's value that present opportunities for upside or downside to the current Trefis price estimate:

Wireless Services

• Postpaid ARPA Growth: T-Mobile is targeting a 2.5% to 3.0% increase in Average Revenue Per Account (ARPA) as customers continue to migrate to premium "Go5G" and the newly launched "Better Value" plans. If the take rate for these high-tier plans exceeds the current 60% trend, there is significant upside to service revenue and EBITDA margins.
• Postpaid Phone Churn: Q4 churn rose slightly to 1.02% from 0.92% a year prior due to heightened competitive activity from AT&T and Verizon. A sustained increase in churn beyond Trefis estimates could pressure customer lifetime value (CLV) and increase subscriber acquisition costs.

For additional details, select a division from the interactive Trefis split for T-Mobile at the top of the page.

BUSINESS SUMMARY

T-Mobile operates a customer-centric wireless business model known as the "Un-carrier" strategy, focusing on contract-free plans, transparent pricing, and network leadership. By leveraging its extensive mid-band 5G spectrum advantage, the company has transitioned from a value-leader to a premium network provider, enabling it to capture significant market share in both urban and previously underserved rural markets.

SOURCES OF VALUE

The Postpaid Wireless segment remains the primary engine of value, driven by superior spectrum holdings that allow for higher capacity and faster speeds at a lower delivery cost than peers.

Mid-Band 5G Spectrum Dominance

T-Mobile's early acquisition and rapid deployment of 2.5 GHz spectrum have provided a 3-to-4-year lead in 5G network performance. This technical moat allows the company to support massive data growth and Fixed Wireless Access without the immediate need for the heavy capital intensity facing its competitors.

Operating Efficiency via AI and Digitization

The company is aggressively integrating AI into its "T-Life" digital platform and customer care operations, aiming for $3 billion in efficiency savings by 2027. By automating 39% of upgrades and reducing calls to care by 50%, T-Mobile is widening its EBITDA margin differentiation against traditional carriers.

KEY TRENDS

Convergence of AI and 5G-Advanced

At MWC 2026, T-Mobile emphasized its shift toward AI-native 6G readiness and 5G-Advanced. By embedding AI directly into the radio access network (AI-RAN), the company is optimizing network resources in real-time to support latency-sensitive applications like autonomous systems and digital twins.

Strategic Capital Allocation and Buybacks

T-Mobile continues to prioritize shareholder returns, authorizing up to $14.6 billion in total stockholder returns for 2026. This includes a plan to double Q1 2026 share repurchases to $5.0 billion, reflecting management's confidence in durable free cash flow generation and a stable 2.5x leverage target.

Fixed Wireless as a Mainstream Competitor

Fixed Wireless Access has moved from an interim solution to a core growth pillar, with T-Mobile now serving 8.5 million 5G broadband customers. The trend of consumers abandoning traditional cable for affordable, easy-to-install 5G home internet is accelerating, providing a low-churn bundle opportunity for the wireless business.