Analyst(s): Ron Westfall
Publication Date: January 31, 2025
T-Mobile’s Q4 FY 2024 earnings report reinforces its leadership in subscriber growth, 5G expansion, and broadband penetration, driven by strong postpaid net additions and low churn. Expansion into smaller markets and rural areas, supported by the US Cellular acquisition, is set to accelerate growth.
What is Covered in this Article:
- T-Mobile’s customer growth and financial performance
- Advancements in 5G technology and network reliability
- Expansion into fiber broadband and rural market penetration
- Strategic M&A impact on network strength and service expansion
- Future outlook and FY 2025 guidance
The News: T-Mobile (NASDAQ: TMUS) reported a 7% year-on-year (YoY) increase in total revenue for Q4 FY 2024, reaching $22 billion—2.6% above consensus estimates. Service revenues grew 6% YoY to $17 billion, while core adjusted EBITDA rose 10% YoY to $8 billion. Diluted earnings per share (EPS) surged 54% YoY to $2.60, exceeding consensus expectations of $2.30. The company added 903,000 postpaid phone customers and recorded a postpaid phone churn rate of 0.92%, tying for its lowest ever in Q4.
“By putting customers first, T-Mobile delivered another monster Q4 that punctuated an amazing growth year with best-in-class results across wireless and broadband,” said Mike Sievert, CEO of T-Mobile. “In 2024, more new postpaid customers chose the Un-carrier than ever before, and we had our lowest ever full-year postpaid phone churn, leading to our third year of more than 3 million postpaid phone net additions.”
T-Mobile Q4 FY 2024: Sustained Growth and 5G Leadership
Analyst Take: T-Mobile’s Q4 FY 2024 results showcase its industry-leading momentum in subscriber growth, profitability, and 5G leadership. The company continues to see high postpaid net additions while keeping churn at record lows – evidence of its solid network and smart pricing strategy. Management continues to execute a dual-pronged growth strategy – expanding 5G broadband penetration in underpenetrated markets while driving average revenue per account (ARPA) growth through premium plan adoption and selective pricing actions. Meanwhile, its aggressive capital allocation strategy – focused on network investments, fiber partnerships, and M&A-driven expansion – positions T-Mobile to extend its competitive edge in FY 2025 and beyond.
Postpaid Momentum and Market Share Expansion
T-Mobile remains the industry leader in postpaid phone net additions, bringing in 903,000 new subscribers in Q4, well ahead of AT&T and Verizon. This growth comes down to its top-tier 5G coverage, smart pricing strategies, and aggressive customer acquisition efforts. Notably, postpaid phone churn dropped to 0.92%, tying for T-Mobile’s lowest Q4 churn ever – reflecting that its strong network and customer retention strategies are paying off.
A major growth driver? Expanding into smaller markets and rural areas, which make up 40% of the US population. Following its US Cellular acquisition, T-Mobile is ramping up efforts in these regions, expecting even stronger postpaid growth in FY 2025. The goal is to increase market penetration from 17.5% to 20% next year and hit 33% or more in the long run by expanding its retail presence and boosting brand awareness. Meanwhile, postpaid ARPA climbed 4.3% YoY to $146.3, thanks to selective price hikes on older plans – without causing a major uptick in churn.
5G Network Superiority and Competitive Differentiation
T-Mobile’s mid-band spectrum advantage widens the gap against AT&T and Verizon, strengthening its leadership in 5G coverage, speed, and capacity. With over 300 million people now covered by high-capacity 5G, the company is leveraging its deep spectrum holdings to boost network performance – without relying too heavily on aggressive pricing.
A key differentiator is its 2.5 GHz spectrum acquired from Sprint, which provides 3.1 MHz of sub-6 GHz spectrum per million subscribers, surpassing AT&T (2.7 MHz) and Verizon (2.1 MHz). This superior spectrum depth allows T-Mobile to offer faster speeds and broader coverage, supporting new service offerings and subscriber growth without significant capital outlay.
Strategic M&A Driving Growth in Wireless and Broadband
T-Mobile’s $4.4 billion acquisition of US Cellular’s wireless operations expands its subscriber base and enhances network coverage in smaller markets. The deal includes 30% of US Cellular’s spectrum holdings, which will support network expansion and service improvements. Management expects the transaction to further strengthen postpaid growth in FY 2025 as T-Mobile expands its presence in underpenetrated markets.
T-Mobile is also expanding its broadband footprint through fiber partnerships. The company entered joint ventures with EQT and KKR to acquire fiber providers Lumos and MetroNet, gaining access to 2.3 million fiber-passed locations. Management stated that the company aims to expand its fiber reach to 12-15 million locations by FY 2030.
Future outlook and FY 2025 guidance
T-Mobile’s raised FY 2025 guidance highlights management’s confidence in maintaining industry-leading growth amid a maturing wireless market. The company expects postpaid net customer additions of 5.5-6.0 million, marking its highest-ever full-year outlook at the start of a fiscal year. Service revenue is now projected to grow at approximately 5% YoY, up from the 4% target outlined at Capital Markets Day, reinforcing the company’s ability to balance price hikes, subscriber growth, and ARPA expansion. Meanwhile, core adjusted EBITDA guidance of $33.1-$33.6 billion highlights margin durability and cost efficiencies, supporting long-term earnings power.
Capital investment remains a priority, with cash CapEx of around $9.5 billion allocated to strengthening network leadership in 5G mid-band spectrum and broadband expansion. These investments are set to further extend T-Mobile’s competitive advantage over Verizon and AT&T, particularly in smaller markets and rural areas, where its US Cellular acquisition enhances scale and coverage.
Read the full press release on the T-Mobile website.
Disclosure: The Futurum Group is a research and advisory firm that engages or has engaged in research, analysis, and advisory services with many technology companies, including those mentioned in this article. The author does not hold any equity positions with any company mentioned in this article.
Analysis and opinions expressed herein are specific to the analyst individually and data and other information that might have been provided for validation, not those of The Futurum Group as a whole.
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Author Information
Ron is an experienced, customer-focused research expert and analyst, with over 20 years of experience in the digital and IT transformation markets, working with businesses to drive consistent revenue and sales growth.
Ron holds a Master of Arts in Public Policy from University of Nevada — Las Vegas and a Bachelor of Arts in political science/government from William and Mary.
