T-Mobile US (NASDAQ:TMUS) used its year-end earnings call and Capital Markets Day update in New York to highlight what CEO Srini Gopalan described as a “halftime check-in” against the company’s September 2024 targets, pointing to continued outperformance in growth, profitability and cash generation, alongside an updated multi-year outlook.
Executives repeatedly framed the strategy around widening differentiation in three areas—network, value and customer experience—and argued that this combination is expanding the company’s addressable growth opportunities across consumer wireless, business, broadband and newer initiatives such as advertising and financial services.
“Best network” emphasis and AI-driven deployment
He also described “customer-driven coverage,” an AI- and data-driven approach to prioritizing network investment based on where customers live, work and travel rather than traditional coverage metrics. T-Mobile said it now deploys “almost 4,000 greenfield sites a year,” using machine learning to plan deployments “surgically” around customer experience.
On performance, management cited median download speeds that it said are roughly double the nearest competitors, along with faster performance on new devices. Gopalan also pointed to third-party recognition, including wins in speed tests and a J.D. Power network quality ranking that he said marked a change in long-standing industry perceptions. T-Mobile said customer perception is shifting as well, with the share of “network switchers” who believe T-Mobile has the best network rising from “1 in 8” in 2020 to “slightly more than 1 in 4” today.
Value positioning, experience initiatives and T-Life
On pricing and value, Gopalan said existing T-Mobile customers pay “between 12%–15% lower than AT&T and Verizon’s,” and argued that new customers see a “20%–30% gap” in holistic value when including plan benefits such as Netflix and Hulu offerings and other services. Management said protecting value remains central even as it pushes network leadership.
Customer experience initiatives were tied to culture and technology. Gopalan said the company has achieved a 50% reduction in customer calls through efforts such as eliminating repeat contacts and equipping frontline teams with better tools, while reiterating a longer-term goal discussed previously. He also said the company is shifting retail emphasis toward company-owned “experience stores” and reducing some authorized retail presence.
Much of the experience discussion centered on the T-Life app, which management said has surpassed 100 million downloads. Executives reported that about 24 million out of roughly 34 million relationships use T-Life monthly, averaging four sessions per month. Gopalan said T-Mobile has moved from 22% of upgrades occurring through T-Life in Q4 2024 (all assisted) to 73% today, with 39% unassisted.
T-Mobile also introduced what it called “Live Translate,” an AI-driven real-time voice translation service built into its network core that it said supports more than 50 languages and works without a separate app if one participant is on the T-Mobile network. Gopalan said it represents an early example of AI services embedded directly in the core network.
Growth priorities: network seekers, rural expansion and broadband scale
Gopalan said the company sees significant opportunity in winning “network seekers,” a customer segment he said historically chose AT&T and Verizon in the 4G era. He also highlighted small markets and rural areas, noting that 40% of Americans live in those regions and that T-Mobile’s share has risen from 13% in 2020 to 24% today, including M&A.
In broadband, T-Mobile increased its long-term fixed wireless access (FWA) target, saying it now sees a path to 15 million FWA customers by 2030, up from a prior 12 million target for 2028. Gopalan said the forecast continues to assume a “fallow capacity” model—allocating peak-hour capacity first to mobile, then using remaining capacity for home internet—and does not assume additional spectrum or future 6G spectral efficiency improvements.
Management also said its fiber initiative, T-Fiber, is expected to contribute 3–4 million customers by 2030, with a target of 12–15 million homes passed based on current assets and partnerships. Combined, executives projected a broadband base of 18–19 million customers by 2030, describing it as incremental growth rather than cannibalization.
Financial update: 2026–2027 outlook, cash flow and capital allocation
CFO Peter Osvaldik detailed Q4 performance and updated multi-year targets. For Q4, T-Mobile reported:
- 261,000 postpaid net account additions
- 2.7% year-over-year postpaid ARPA growth, with 3.6% organic growth
- Service revenue up 10% year-over-year reported (5% organic)
- Adjusted EBITDA up 7% reported (4% organic)
- Free cash flow conversion of service revenue of 22% in Q4 and 25% for the year
For 2026, T-Mobile now expects approximately $77 billion in service revenue (about 8% growth), including around $3.6 billion from M&A contributions, implying 6% organic growth. The company guided to 900,000 to 1 million postpaid net account additions in 2026 and 2.5%–3% postpaid ARPA growth. Osvaldik said that embedded in the account outlook is an implied expectation of about 2.5 million postpaid phone net additions.
For 2027, T-Mobile expects $80.5 billion to $81.5 billion in service revenue, including about $4 billion from M&A and roughly 5% organic growth. On profitability, the company guided for 2026 core adjusted EBITDA of $37 billion to $37.5 billion, and said it expects to reach $40 billion to $41 billion in 2027. Osvaldik also outlined cost savings driven by digitalization, AI and simplification, projecting incremental savings of $1.3 billion in 2026 and $2.7 billion in 2027 relative to 2025.
T-Mobile expects $10 billion of CapEx in 2026, including upgrades to retained UScellular sites, and a “normalized” $9 billion to $10 billion in 2027. For adjusted free cash flow, it guided to $18 billion to $18.7 billion in 2026 and $19.5 billion to $20.5 billion in 2027. The company also disclosed expectations for merger-related cash outlays and higher cash taxes in 2027, which it said incorporate anticipated impacts from the “one big, beautiful bill.”
On reporting changes, Osvaldik said T-Mobile will focus on postpaid net account additions and postpaid ARPA as its core performance measures going forward and will no longer report subscriber-level elements, while stating the company will provide account-based churn metrics. Management said the shift is intended to align disclosures with how customers buy service—primarily as multi-line families and businesses—and how the company measures lifetime value creation.
On capital allocation, Osvaldik said the company has returned over $45 billion to shareholders since the buyback program began in Q3 2022, including more than $20 billion since the September 2024 Capital Markets Day. He said the company has a remaining allocation envelope of over $52 billion for 2026–2027 and plans to allocate up to $30 billion to shareholder returns, including up to $10 billion per year in share repurchases. Osvaldik said T-Mobile is accelerating Q1 share buybacks to “up to $5 billion.” He also referenced Deutsche Telekom’s statement that it does not currently plan to sell T-Mobile shares in 2026 and is exploring ways to deepen its investment.
About T-Mobile US (NASDAQ:TMUS)
T-Mobile US is a national wireless carrier that provides mobile voice, messaging and data services to consumers, businesses and wholesale customers across the United States, Puerto Rico and the U.S. Virgin Islands. The company operates a nationwide mobile network and offers device sales, equipment financing and support services through retail stores, online channels and distribution partners. T-Mobile positions its products around bundled service plans, device offerings and value-added features for both individual and enterprise customers.
Product offerings include postpaid and prepaid wireless plans under the T-Mobile and Metro by T-Mobile brands, as well as connectivity solutions for small and large businesses.
