T-Mobile US confirms capex dip as it boasts stellar 2022

• US operator is boasting a stellar 2022
• It added 6.4 million postpaid customers last year
• It has been investing heavily in its 5G network rollout
• But the bad news for vendors is that T-Mobile’s capex is dropping significantly this year

T-Mobile US decided not to wait until it reports its full year 2022 financials to boast about what an amazing 12 months it’s just had, choosing instead to issue a press release late on Wednesday that provided an update on its customer additions for last year – and the numbers were impressive.    

The self-styled ‘Un-carrier’ said it added 1.8 million net postpaid customers during the fourth quarter and ended 2022 with 6.4 million additional postpaid customers, boasting that this annual increase is expected to be the “best in [the US] industry”. It has, indeed, been growing its customer base faster than both AT&T and Verizon on a consistent basis in recent times and, by many metrics, is regarded as the 5G market leader in the US – see T-Mobile US builds a commanding lead over rivals AT&T and Verizon.

That means T-Mobile ended 2022 with 92.2 million postpaid customers, as well as almost 21.4 million prepaid customers, giving it a grand total of 113.6 million customers. 

One of the drivers for its customer growth has been its fixed wireless access (FWA) service, which it simply calls ‘High Speed Internet’. It signed up 524,000 new customers to that service in the fourth quarter, taking its total additions for last year to 2 million. As a result, it ended the year with more than 2.6 million FWA home broadband users: Such numbers should be of concern to its fixed broadband rivals, particularly the cable companies. 

As ever, T-Mobile wasn’t shy about praising itself. “It's clear that T-Mobile's ability to offer both the best network and value is bringing new customers to the Un-carrier and enticing those who join us to stay,” noted CEO Mike Sievert. “And our momentum won't stop as we continue to translate our long-established 5G lead into overall network leadership and execute on our unique growth strategy. We are perfectly positioned to profitably take further market share in 2023 and beyond!” he boasted. 

That customer growth has come on the back of significant network investments during the past couple of years as T-Mobile aimed to build a leadership position in 5G following its merger with Sprint. In 2022, T-Mobile ramped up its capital expenditure (capex) programme and was on course to reach between $13.7bn and $13.9bn in full-year capex, based on its estimates shared in late October.

But the operator’s major investment push is now over and that spells bad news for its vendor suppliers, which will be seeing far less business from the Un-carrier in 2023 and the following years.

Speaking at the Citigroup investor conference on Wednesday, T-Mobile CFO Peter Osvaldik noted that the operator currently covers 260 million US citizens with its higher-speed mid-band 5G services and is on course to increase that to 300 million (that target is set to be met by the end of 2023, the operator noted in an announcement last month). It also reaches more than 320 million US citizens with its low-band 5G services – keep in mind that the total US population is about 333 million.

As a result of achieving that coverage, the operator can now scale back its capex, with Osvaldik noting that the likely 2023 capex total will be between $9bn and $10bn, a year-on-year decrease of more than 30% (based on the mid points of those ranges). 

This isn’t totally unexpected, as T-Mobile has previously suggested its capex spending would be dipping this year, but it will still come as a blow to the vendor community, which will also be gearing up for a reduction in capex budgets at AT&T and Verizon from next year: Verizon’s CEO, Hans Vestberg, told the Citigroup conference that 2024 capex would dip to about $17bn in 2024, a massive drop from the $22bn invested last year, with the 2023 number to be revealed on 20 January when the operator unveils its 2022 financials. 

- Ray Le Maistre, Editorial Director, TelecomTV