T-Mobile US Inc. TMUS has inked a definitive agreement with Grain Management, LLC to sell its 800 MHz spectrum assets. The transaction with this leading private investment firm, focused on digital infrastructure and solutions for the global broadband industry, will likely be completed by the end of April, subject to the fulfillment of mandatory closing conditions and regulatory approvals. 

In return, T-Mobile will gain Grain’s 600 MHz spectrum licenses and cash. This will expand T-Mobile’s 600 MHz spectrum band, enabling it to strengthen its 5G network by leveraging the spectrum’s wide coverage capabilities. On the other hand, Grain will deploy the 800 MHz spectrum to utilities, other critical infrastructure industry operators, rural and regional operators and other enterprises to help bridge the digital divide. The transaction, therefore, is a win-win for both companies.

TMUS’ Portfolio Restructuring

T-Mobile has been actively acquiring and deploying 600 MHz spectrum to expand its 5G network coverage, particularly in areas that previously had communication gaps. In 2024, T-Mobile inked a definitive agreement with United States Cellular Corporation USM to acquire substantially all of the latter’s wireless operations along with 30% of its spectrum assets across several spectrum bands. 

The transaction enabled T-Mobile to expand its fast-growing home broadband offerings and fixed wireless products by tapping into the additional capacity and coverage created through the combined spectrum and wireless assets. Moreover, the Un-carrier leased space on various US Cellular towers to ensure continued, uninterrupted service for its customers.

In 2023, T-Mobile agreed to acquire Comcast Corporation's CMCSA 600MHz spectrum licenses covering around 39 million people living in New York, NY, Orlando, FL, Kansas City, MO and other markets that are outside Comcast's cable footprint. Comcast might also sell spectrum licenses covering 110 million people in cities including Chicago, IL, San Francisco, CA, Baltimore, MD, Boston, MA, Miami, FL, Nashville, TN and other markets that are inside Comcast's cable footprint. This deal is likely to close in 2028. T-Mobile also acquired $3.5 billion worth of 600 MHz spectrum licenses in 2022, covering around 100 million people in major markets like Boston and Los Angeles from Columbia Capital.

TMUS Rides on 5G Bandwagon

T-Mobile continues to enhance its network infrastructure, including 5G and fiber networks, to provide best-in-class coverage and capacity across the nation. The infrastructure investments position it for growth by ensuring widespread access to its services, particularly in the rural region. T-Mobile's commitment to closing the digital divide underscores its dedication to fostering inclusive connectivity and driving socio-economic progress as the digital landscape evolves. 

T-Mobile boasts a leadership position in the 5G market. The company’s 5G network covers 98% of Americans or more than 330 million people in the country. Moreover, TMUS has an industry-leading postpaid customer growth with a record-low churn rate. About 55% of postpaid customers are using a 5G phone, and 5G devices account for more than half of the total network traffic. The Ultra Capacity 5G delivers superfast speeds, powering 5G smartphones and enabling innovators to deliver transformational 5G experiences. T-Mobile achieved its 2024 target of covering 300 million Americans with ultra capacity 5G network two months before its targeted deadline. It intends to bring more competition to home broadband, especially in underserved rural markets.

Shares of the company have gained 58.8% in the past year compared with the industry’s growth of 39.2%.

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Zacks Rank & A Key Pick

T-Mobile currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. 

Ubiquiti Inc. UI, sporting a Zacks Rank #1, offers a comprehensive portfolio of networking products and solutions for service providers and enterprises. Its service-provider product platforms offer carrier-class network infrastructure for fixed wireless broadband, wireless backhaul systems and routing, while enterprise product platforms provide wireless local area network infrastructure, video surveillance products and machine-to-machine communication components. In the trailing four quarters, it delivered an earnings surprise of 7.5%.

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