- T-Mobile held its Capital Markets Day in San Francisco on Wednesday, laying out its growth strategy for the next three years
- Nvidia CEO Jensen Huang and OpenAI CEO Sam Altman were surprise guests and provided some all-star sizzle to the story
- The carrier’s ‘best in 5G’ narrative was overrun by questions about its fiber strategy
SAN FRANCISCO—True to form, T-Mobile’s senior management team confidently laid out their ambitious three-year growth plan during their Capital Markets Day on Wednesday.
The question is: Is anyone buying it?
Turns out, quite a few, despite Fierce’s efforts to find skeptics in the hallways of the Ritz Carlton, where T-Mobile hosted the event. A scattering of analysts said they were impressed by the plan to extend network leadership, build up the broadband business and grow new markets – and they believe T-Mobile has the goods to get it done.
That’s not surprising given that 22 Wall Street analysts covering T-Mobile currently rate it a “buy” compared to one “sell” rating, according to WSJ Markets.
Sure, some analysts grumbled that they didn’t hear enough specifics. Wall Street analyst Craig Moffett today published a report lamenting a missed opportunity in that a lot of interest revolved around T-Mobile’s fiber strategy when the topic that should have been top of mind is how much runway is left for T-Mobile to grow share in suburban, rural and business markets. (More on that later.)
The “sizzle” came in the form of new technology partnerships with AI rock stars Nvidia and OpenAI. Nvidia CEO Jensen Huang and OpenAI CEO Sam Altman joined T-Mobile CEO Mike Sievert on stage to talk about all the ways T-Mobile will use their AI technologies to improve the customer experience, both through customer service and the network.
T-Mobile is set to launch the IntentCX AI-decisioning platform with OpenAI in 2025. It’s less clear when the collaboration with Nvidia, Ericsson and Nokia will yield results, but they’re going to start with an AI-RAN Innovation Center based in Bellevue, Washington, where they’ll bring Radio Access Network (RAN) and AI innovation closer together.
Perhaps not quite as Silicon Valley-esque but high on the agenda: T-Priority, a new business targeting the public safety sector that goes up against AT&T’s FirstNet business and Verizon Frontline.
As for the topic du jour: broadband, T-Mobile said it expects to reach 12 million 5G broadband customers by 2028 using fixed wireless access (FWA), up from its previous target of 7 million to 8 million customers by 2025. Fiber to the home will augment that progress; the company expects to reach 12 million to 15 million homes with its fiber partnerships by the end of 2030.
AI aspirations raise some eyebrows
Techsponential founder Avi Greengart acknowledged that he’s skeptical about some of T-Mobile’s more aspirational announcements around AI, and it’s not clear whether the geographies where T-Mobile’s partners are rolling out fiber matches the areas where T-Mobile’s FWA offering is over-subscribed.
However, “the core story is extremely convincing: T-Mobile has an excellent spectrum position, strong brand, and history of execution in the post-merger era. Public safety and enterprise are pure upside for T-Mobile,” Greengart said.
Ditto from Roger Entner, founder of Recon Analytics.
“They have a really good track record,” he told Fierce. “T-Mobile is on a very good trajectory. I think unless AT&T and Verizon significantly make a change, there’s nothing that will change the relative trajectory.”
Jitesh Bhayani, Research VP in IDC’s Worldwide Telecom group, said T-Mobile’s plans are “pretty ambitious.” However, “I do believe this kind of innovation is needed, not only from a B2B perspective, but from a consumer perspective,” he told Fierce.
He would like to hear more about what type of managed services are in the works and how AI is going to influence that, as well as whether the fiber business will expand from residential to business.
“But overall, I think the fact that they’re partnering with Nvidia the way they are to me sounds very exciting and I’m hoping that this will propel the entire industry,” he said. “I totally agree that they are on the right track.”
556 Ventures’ Bill Ho said T-Mobile has always under promised and over delivered.
“They staked their claim to postpaid and said they will continue to lead adds. Switching and rural areas will still be the source of subscribers and growth. I buy this as it’s their future guidance,” he told Fierce.
So, it appears T-Mobile remains a darling in the eyes of many analysts, at least for now.
In a research note Wednesday, New Street Research analyst Jonathan Chaplin ran through the list of updated financial targets and said the Capital Markets Day event likely left the audience with the impression that T-Mobile is “a very well run mobile operator” with a deep focus on their customers and on generating attractive returns for shareholders.
“They project extreme competence. The strategy is clear and they articulate it well. T-Mobile is well on its way to becoming the most valuable telecom company in the U.S. and potentially globally,” he said.
High praise, indeed.
Fiber overshadowing wireless
Back to Moffett’s point about a “missed opportunity.” He’s been critical about all this focus on fiber because there’s just not much of a fiber footprint to be meshed together. It all risks being a distraction to what should really matter: winning in wireless.
“A single slide framed what, for us, should have been the focus: T-Mobile is #1 in 40 of the top 100 U.S. markets, and yes, they are still growing in those markets. But they’re still #2 in another 30 of the top 100, and still #3 in the remaining 30 of the top 100,” he wrote.
It all boils down to a solid growth story that could be compelling, but right now, it’s being overshadowed by “a set of wired broadband moves that raise more questions than they answer,” he concluded.