Despite impediments like the coronavirus-induced turmoil and social unrest, T-Mobile US Inc. (TMUS - Free Report) has achieved a historic milestone by offering 5G services across all 50 states in the country. The feat showcases the inherent strength of its resilient business model amid a competitive and cut-throat business environment.
The company recently formed a strategic collaboration with General Communication Inc., a telecommunications firm operating in Alaska, to provide 5G network connectivity in Anchorage — the largest city in the state. With this, T-Mobile reportedly became the only wireless carrier to offer 5G services throughout the country either on its own or through partner coverage. The win-win partnership further enabled General Communication customers to enjoy roaming access to T-Mobile’s nationwide 5G network spanning one million square miles across nearly 6,000 cities and towns.
Notably, T-Mobile and General Communication have a long-serving business relationship and had inked the first LTE roaming partnership in 2014. The firms, together, were also the first to deliver voice over LTE services. The recent collaboration will likely serve as a model for General Communication’s network modernization initiative as it aims to extend its footprint across Alaska in order to serve cities like Juneau, Fairbanks and other fiber-connected regions.
With the merger and subsequent integration with Sprint assets, T-Mobile has redefined itself as a wireless giant with a huge subscriber base that is comparable with rivals AT&T Inc. (T - Free Report) and Verizon Communications Inc. (VZ - Free Report) . The merger has enabled T-Mobile and Sprint to join their high- and low-band spectrum for a faster nationwide 5G rollout, undeniably disrupting the competitive landscape of the U.S. telecom market.
In addition, T-Mobile has gained the wherewithal to offer unmatched value to consumers, with better service at lower prices. The enhanced scale and financial strength of the combined entity will drive a planned investment of $40 billion in its network and business over the next three years. Moreover, synergies achieved from the integration have the potential to unlock massive scale and deliver greater value to stockholders.
T-Mobile’s network will likely have 14 times more capacity in the next six years than on a standalone basis, which will enable it to leapfrog the competition in network capability and experience. Its customers will have access to average 5G speed, which will be up to eight times faster than current LTE in a few years and 15 times faster over the next six years. Within six years, the new T-Mobile is expected to provide 5G to 99% of the U.S. population and average 5G speeds above 100 Mbps to 90% of the population. T-Mobile’s business plan is built on covering 90% of rural Americans with average 5G speeds of 50 Mbps, up to two times faster than broadband. It will compete for consumers at all price points.
The stock has gained 35.3% in the past year compared with 3% growth for the industry.
T-Mobile currently has a Zacks Rank #5 (Strong Sell).
A better-ranked stock in the industry is United States Cellular Corporation (USM - Free Report) , carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
United States Cellular delivered a positive earnings surprise of 104.1%, on average, in the trailing four quarters.
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