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Indicative Year-to-Maturity: 4.275%
T-Mobile US
- Sector: Technology Media and Telecommunications
- Sub Sector: Telecommunications
- Region: US
- Bond: TMUS 3.5 31
- Indicative Yield-to-Maturity (YTM): 4.275%
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Fundamental View
AS OF 28 Jul 2025- We expect T-Mobile will maintain its position as the industry leader in postpaid phone net additions, service revenue and EBITDA growth in 2025. We think the company has significant subscriber runway remaining in the suburban/rural and enterprise markets.
- Adjusted net leverage (2.3x at 2Q25) is 0.3x/0.6x lower than AT&T/Verizon. Relatively strong EBITDA growth and a modest dividend commitment results in greater financial flexibility than peers.
- T-Mobile benefits from the strongest spectrum position in the industry, including an average of 181 MHz in the 2.5 GHz band, which results in better 5G network coverage than AT&T and Verizon.
Business Description
AS OF 28 Jul 2025- TMUS is the one of the top 3 U.S. wireless carriers and is owned ~51% by Deutsche Telekom (DT). On April 1, 2020, TMUS and S completed an all-stock merger, valuing S at an EV of approximately $59.7 bn.
- TMUS ended 2024 with ~130 mn customers, including 104 mn postpaid and 25 mn prepaid.
- TMUS reaches 330+mn POPs with its Extended Range 5G network (using the 600 MHz spectrum) and reaches 300mn customers with its Ultra Capacity 5G.
Risk & Catalysts
AS OF 28 Jul 2025- Converged wireless/broadband offers from cable operators raises the risk of pricing pressure in the mature consumer wireless market.
- The company has not shied away from acquisitions. T-Mobile recently acquired Mint Mobile, two FTTH JVs and will soon close its purchase of US Cellular. So far, M&A has not had much impact on T-Mobile’s credit metrics, but further moves into FTTH may be received poorly by investors.
- With T-Mobile’s credit rating now comfortably in the mid-BBB area and leverage in the vicinity of the group’s mid-2x target area, we expect the company’s capital allocation to shift toward shareholder returns.
Key Metric
AS OF 28 Jul 2025| $ mn | FY21 | FY22 | FY23 | FY24 | LTM 2Q25 |
|---|---|---|---|---|---|
| Revenue | 80,118 | 79,571 | 78,558 | 81,400 | 84,052 |
| Organic Revenue Growth | 7.3% | (0.7%) | (1.3%) | 3.6% | 6.3% |
| EBITDA | 26,924 | 27,821 | 29,428 | 31,864 | 32,965 |
| Adj. EBITDA Growth | (64.0%) | 33.9% | 5.8% | 8.3% | 8.0% |
| Adj. EBITDA Margin | 33.6% | 35.0% | 37.5% | 39.1% | 39.2% |
| CapEx % of Sales | 15.4% | 17.6% | 12.5% | 10.9% | 10.7% |
| Total Debt | 79,574 | 78,425 | 83,586 | 84,255 | 88,871 |
| Net Debt | 72,943 | 73,918 | 78,451 | 78,846 | 78,612 |
| Gross Leverage | 3.4x | 3.0x | 2.9x | 2.7x | 2.7x |
| Net Leverage | 3.0x | 2.7x | 2.6x | 2.4x | 2.3x |
| Interest Coverage | 7.2x | 8.0x | 8.3x | 8.7x | 8.7x |
| FCF as % of Debt | 13.7% | 13.2% | 19.2% | 23.0% | 22.7% |
CreditSight View Comment
AS OF 23 Oct 2025We expect TMUS will once again lead the Big 3 in major KPIs in 2025, including ~6% EBITDA growth. We view earnings/growth visibility as higher than peers, with the outlook supported by its leading 5G mid-band coverage (over 300 million PoPs with ~200 MHz) and historical under-penetration in rural and enterprise markets. T-Mobile also boasts the lowest leverage (~2.5x) and strongest FCF/debt ratio amongst the Wireless Big 3, while its rising FCF generation and comparatively low dividend commitment provide flexibility for selective M&A. Despite the rising focus on convergence, we believe TMUS will stick with its off-balance sheet strategy for FTTH JVs and view the risk of a transformational broadband acquisition (ILEC or cable) as extremely low.
Recommendation Reviewed: October 23, 2025
Recommendation Changed: March 18, 2021
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