Market Overview

Heard Of T-Mobile's Uncarrier For Business? Here's What Pacific Crest Has To Say


In a report published Wednesday, Pacific Crest analyst Michael Bowen commented on T-Mobile US Inc's (NYSE: TMUS) move to bring its "Uncarrier" program to businesses.

T-Mobile's "Uncarrier" strategy for business applies to businesses of all sizes and is primarily target towards small and medium businesses. Pricing starts at $16 per line for businesses with 10-19 lines and drops to $10 per line for businesses with 1,000 lines. However, unlike other carriers, each line comes with 1 GB of data and companies can add addition data.

Bowen added that a move by T-Mobile will create "moderate risk" to the wireless business segments of Sprint, AT&T and Verizon as up to half of their wireless revenue coming from the segment.

In fact, T-Mobile estimated that Verizon and AT&T combined for $72.2 billion in business wireless revenue in 2014, while Sprint earned $8.0 billion. By comparison, T-Mobile estimated its share of the business revenue segment was $2.4 billion.

"We believe T-Mobile's low business market share, positive brand image and consumer momentum position it well to take share from incumbents," Bowen wrote. "These programs could add some pressure to EBITDA margin, but could offset this with incremental revenue growth."

Bowen concluded by noting that T-Mobile's penetration is "low" and its new plans are "disruptive enough" to gain scale and that the "moderate" risk to its margins is worth the risk to capture market share.

Shares of T-Mobile are Outperform rated with a $40 price target.

Latest Ratings for TMUS

Nov 2020Raymond JamesMaintainsOutperform
Nov 2020Wells FargoReinstatesOverweight
Nov 2020Morgan StanleyMaintainsOverweight

View More Analyst Ratings for TMUS
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