Morningstar Rating

Stock Research and Analysis

by Michael Hodel, CFA

Bulls Say

T-Mobile US holds valuable assets that would be difficult, if not impossible, to replicate. It is one of only four nationwide wireless providers, with ample network and spectrum resources to meet customer demand well into the future.
As Verizon Wireless and AT&T focus the vast majority of their energy on the premium segment of the market, T-Mobile US should have room to carve out a niche as a value-focused carrier.
Because MetroPCS' customers churn and upgrade their phones very quickly on average, T-Mobile US should be able to quickly migrate customers to the T-Mobile network. Read more 

Bears Say

T-Mobile is likely to operate at a persistent cost disadvantage versus its larger rivals. This position will make it difficult to compete as a value carrier while also delivering decent profitability.
Smaller scale and a relatively weak balance sheet will hamper T-Mobile US' ability to react to changing market conditions or take advantage of new opportunities.
The best outcome for T-Mobile shareholders is likely to sell the firm to a larger carrier. Management may resist selling out until the firm's fortunes begin to sour, reducing the price shareholders could hope to receive. Read more 

Management

The majority of T-Mobile US' executive ranks hail from the former Deutsche Telekom/T-Mobile USA, including CEO John Legere. Legere was previously CEO of Global Crossing, a firm he led out of the telecom bubble a decade ago and then sold to Level 3 Communications   Read more 

Profile

T-Mobile US is the product of MetroPCS' acquisition of Deutsche Telekom's T-Mobile USA unit. The company serves 51 million customers, including 25 million postpaid and 16   Read more 

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