T Mobile & 5G: October '18 Update

T Mobile & 5G: October '18 Update


Industry & Pitch Update post CQ3 Industry Results

19 Page Update

  1. We think that the DOJ/FCC will approve S+TMUS with conditions in the 1H’19 because the DOJ/FCC will admit that they failed consumers in broadband and paid-TV competition.

  2. The regulatory approval conditions will include: 1) the commitment to a specified 5G wireless nationwide service, 2) the commitment to a fixed wireless service broadband alternative in many single-provider markets, 3) a commitment to a 5G price cap that references the 4G price, and 4) potentially divesting the prepaid business.

  3. Excitement for 5G wireless will build in the 1H’19. We expect TMUS to launch in 30 markets with a $78/mo price single-line Unlimited price point for 4G+5G.

  4. As Wall Street gets comfortable with TMUS’ 5G momentum including a step-up in postpaid share gains in the 2H’19, we expect substantial favorable consensus revisions. Our 2020 EBITDA estimate for TMUS is 14% higher than consensus.

  5. If everything works, the stock should hit $240 by 2021.

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