T-Mobile, US, Inc. TMUS recently announced that the joint venture (JV) it formed with global investment organization EQT has successfully completed the acquisition of Lumos. As one of the prominent fiber-to-the-home Internet access providers, Lumos operates a 7,500-mile fiber network, boasting a customer base of 475,000 homes throughout the Mid-Atlantic region.

Strategic Importance of the Acquisition

As of the end of 2024, T-Mobile offered 5G Home Internet plans to 70 million homes and provided services to 6.4 million customers across the country. The fifth largest and fastest-growing Internet service provider has introuced its fiber home Internet across 32 U.S. markets. Moreover, the company also has approximately 1 million customers on the waitlist, highlighting the growing demand for TMUS 5G Home Internet. TMUS is aiming to expand its home broadband portfolio and infrastructure expansion capability to support this surge in demand.

With various strategic collaborations and joint ventures, T-Mobile has set a target of reaching around 12-15 million households by 2030. Its acquisition of Lumos perfectly aligns with its broader strategy. Lumos fiber-to-the-home service offerings complement TMUS 5G Home Internet offerings and will likely enable TMUS to match the growing broadband demand.

Post-acquisition, Lumos is benefiting from TMUS’ comprehensive network assets and EQT’s fiber infrastructure expertise. T-Mobile has pumped in $950 million in the JV with the plan for an additional $500 million investment between 2027 and 2028. With these investments, TMUS is aiming to drive Lumos fiber expansion and reach a 3.5 million customer base by the end of 2028.

TMUS Rides on Customer-Focused Approach

Following the acquisition, Lumos’ customer base will gain access to T-Mobile’s unbeatable connectivity and enticing features. The carrier’s customer-first service model and nationwide retail presence will ensure a premium experience for Lumos customers. New and existing users will have Magenta status, offering exclusive benefits such as discounts on gas, food, entertainment and more. All of the T-Mobile plans include unlimited data, Wi-Fi equipment and installation, simplifying the broadband deployment process and ensuring reliable Internet services for end users.

Will This Buyout Drive TMUS’ Share Performance?

The Lumos acquisition expands TMUS’ capability to serve underserved regions by accelerating the deployment of high-speed broadband. The broadening of the customer base will ensure greater economies of scale and allow T-Mobile to offer more competitive pricing. T-Mobile’s strategic acquisition and innovation are steadily expanding its market reach. Moreover, its differentiated marketing and customer-first service model to attract new subscribers will likely drive long-term growth.

T-Mobile’s acquisition strategy has significantly strengthened its position in the wireless industry over the past few years. The company completed its acquisition of Sprint in 2020. The combined company’s network has 14 times more capacity than on a standalone basis, which enables it to leapfrog the competition in network capability and customer experience.

T-Mobile also inked a definitive agreement with United States Cellular Corporation to acquire substantially all of the latter’s wireless operations along with 30% of its spectrum assets across several spectrum bands. The transaction will enable T-Mobile to expand both its fast-growing home broadband offerings and fixed wireless products through the additional capacity and coverage from the combined spectrum and wireless assets. The company recently completed the acquisition of Blis, an innovative provider of privacy-centric advertising solutions, and Vistar Media, a leading provider of technology solutions for digital-out-of-home advertisements.

TMUS’ Stock Price Movement

Shares of T-Mobile have gained 61.8% in the past year compared with the industry’s growth of 40.8%.

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TMUS’ Zacks Rank & Other Stocks to Consider

T-Mobile currently carries a Zacks Rank #3 (Hold).

Here are some better-ranked stocks that investors may consider.

InterDigital IDCC sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

In the trailing four quarters, InterDigital delivered an earnings surprise of 158.41%. It is a pioneer in advanced mobile technologies that enable wireless communications and capabilities. InterDigital boasts a comprehensive portfolio of more than 33,000 granted patents and applications. The company witnessed an exceptional year in innovation in 2024, with more than 5,000 new patent filings worldwide. 

CommScope Holding Company, Inc. COMM sports a Zacks Rank #1 at present. It has a long-term growth expectation of 19.37%. 

Headquartered in Hickory, NC, CommScope is a premier provider of infrastructure solutions, including wireless and fiber optic solutions, for the core, access and edge layers of communication networks. The company currently operates in three segments: Connectivity and Cable Solutions, Networking, Intelligent Cellular and Security Solutions and Access Network Solutions. CommScope has an established global manufacturing and distribution footprint. Its strategically located manufacturing hubs optimize product delivery timelines.

United States Cellular Corporation USM sports a Zacks Rank of 1 at present. In the last reported quarter, it delivered an earnings surprise of 150%.

U.S. Cellular has taken concrete steps to accelerate subscriber additions and improve churn management. The company aims to offer the best wireless experience to customers by providing superior quality network and national coverage. It is well-positioned to support the investment required for network enhancements, including the deployment of 5G technology.

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