T-Mobile Earnings: A Stable Competitive Environment Continues to Enable Strong Customer Growth

T-Mobile continues to lead the U.S. wireless industry in customer additions while growth in revenue per customer lags AT&T and Verizon. Management didn’t directly respond when asked about potential phone plan price increases in 2024. Instead, it highlighted the “unprecedented value” customers now receive while hinting at “optimization” opportunities, like the changes in its autopay discount policy implemented in 2023. The firm increased the price of its fixed-wireless broadband offering last week, which it expects will modestly slow customer additions to the service in 2024. Management’s forecast for 2024 also calls for phone customer growth similar to 2023. Even with these limitations, T-Mobile expects accelerating wireless service revenue growth. We still expect the firm to grow increasingly comfortable in taking steps to increase revenue per customer as competition in the wireless industry remains rational. We are leaving our T-Mobile fair value estimate at $165 per share.