Nasdaq-100® Inside the Index: T-Mobile US (TMUS)
Key Figures
- $92.2B LTM revenue
- 142.4M total subscribers
- 35.4% EBITDA margin (LTM)
- ~18x P/E (TTM)
- $18.4B free cash flow (LTM)
VOL 1 • ISSUE 06 • JULY 2026
T-Mobile runs one 5G network serving 142.4 million subscribers. Home internet, AI, and enterprise services are turning spare network capacity into the next leg of growth.
TMUS • Telecommunications • Index Constituent
This Issue — TMUS
T-Mobile, a current Nasdaq-100® constituent at ~0.86% index weight, is the largest US wireless operator by postpaid subscribers and now serves 142.4 million total subscribers after folding in the UScellular acquisition (per company filings and Bloomberg). LTM revenue reached ~$92.2B at a ~35% EBITDA margin, with free cash flow up to $18.4B. Trades at ~18× P/E (TTM).
Business Model & Revenue Drivers
What T-Mobile Actually Sells
The visible product is the monthly phone plan: wireless voice and data for a base that now spans 142.4 million total subscribers, after the UScellular acquisition extended T-Mobile into smaller and rural markets alongside the 2020 Sprint merger. Service revenue is the dominant, highest-quality line, $71.3B, or 80.7% of FY2025 revenue, with branded postpaid phone plans alone contributing $49.4B.
The quieter product rides the same towers. Where the 5G network has capacity to spare, T-Mobile sells it as home internet, a fallow-capacity model that turns unused wireless bandwidth into a broadband bill. Total revenue grew 8.5% in 2025 as accounts, per-account revenue, and the UScellular contribution all added to the top line.
Competitive Moat
Why This Is Hard to Replicate
The advantage is spectrum. T-Mobile controls approximately 394 MHz of low- and mid-band spectrum, with its 2.5 GHz network covering 70% more area than the C-Band network competitors are deploying. The 5G buildout is roughly 90% complete, with densification still in early stages.
That network has been independently validated: T-Mobile was named Best Mobile Network by Ookla for the third consecutive time, swept Opensignal's Quality of Experience and Network Performance awards, and was named U.S. Test Champion by P3, winning all 13 categories including AI Services Champion.
Operating Strengths
Three Structural Advantages
- $152.91 average revenue per account — ARPA grew 2.0% year over year in Q2 2026 (3.7% organic, excluding UScellular), lifting service revenue without adding new lines.
- $30B capital returns targeted, 2026–2027 — Roughly $12B in buybacks planned for 2026 and $10B for 2027, funded by free cash flow now above $18B a year.
- 0.62 adjusted beta (2Y weekly) — Statistically low correlation to the market, giving the stock defensive ballast even as the underlying business keeps expanding.
Growth Catalysts
What Grows the Business Next
Broadband is still the headline, but Starlink is now a two-sided story. T-Mobile targets 15 million FWA customers by 2030, up from 8.5 million today, plus 3–4 million more through fiber joint ventures, for an 18–19 million combined broadband base. Management argues current Starlink satellite fleets can't support the connection density FWA needs in cities, but concedes next-generation satellites could pose a real future threat.
- AI in the network and service. Live translation launched in beta in Q2 2026 as T-Mobile's first network-native AI feature; AI and digitalization initiatives, including a Figure AI physical-AI partnership, are expected to add $1.3B to core earnings in 2026 and $2.7B in 2027
- Enterprise and advertising. T-Ads, financial services, and a new Chief Enterprise Officer role target growth beyond consumer phone plans; a "SuperBroadband" offering pairs 5G with satellite redundancy for enterprise customers
- Fiber build-out. Joint-venture fiber markets are hitting roughly 20% first-year penetration and are expected to add about 100 basis points to 2026 service revenue growth
Historical Context
FY2021 – Latest Revenue Trajectory
Revenue held roughly flat from 2021 to 2023 as T-Mobile absorbed the Sprint merger, then inflected once synergies landed and home internet scaled. The business stayed profitable throughout, and core earnings have grown in each of the most recent years.
- +12% postpaid subscribers: 104.1M → 116.4M
- +4.8 pts EBITDA margin: 33.6% → 38.4%
- +33% home internet: ~6.4M → 8.5M
Valuation & Investment Thesis
A Premium Among Telecom Peers
T-Mobile trades at ~18× P/E (TTM) and 7.2× 2026E EV/EBITDA, a premium to Verizon (6.7×) and AT&T (6.3×) on both metrics. The market is pricing continued ARPA growth, broadband share gains, and a cash flow profile funding steady buybacks — T-Mobile has targeted up to $30B in capital returns over 2026–2027.
Telecom demand is defensive: phone and internet bills get paid in most conditions. For the premium to hold, ARPA growth and broadband adds have to keep building as the UScellular integration matures.
Key Risks
What Could Change the Story
- Growth deceleration, as consensus sees revenue growth cooling from 8.5% in 2025 to an estimated 4.5% by 2027 as UScellular synergies mature
- Prepaid erosion, with prepaid revenue declining for four straight quarters at an accelerating rate, a structural drag on total service revenue
- Credit quality, as bad debts have risen to 1.8% of revenue year-to-date versus 1.4% a year earlier
- Elevated leverage, with net debt near $116.6B and net debt/EBITDA at 3.6x against a 2.5x medium-term target, plus an estimated $35B in spectrum-auction spending expected in 2027–2029
- Fiber footprint gap, as T-Mobile's fiber footprint lags peers, which may matter more as AI traffic patterns emphasize uplink quality
What This Means For You
The Index Angle, in Plain Terms
In Your Index Fund — If you hold a fund that tracks the Nasdaq-100 Index®, you already own this.
- Index composition follows transparent eligibility criteria, and TMUS is a current constituent at ~0.86% index weight: roughly $0.86 of every $100 tracking the Nasdaq-100 sits in T-Mobile
- It's the magenta carrier on your monthly phone bill, now bigger after absorbing UScellular, with more than 8.5 million households also taking its home-internet box
- The same 5G network carries both wireless and broadband, which is why the company spends less of its revenue building infrastructure than its rivals do
Decoding the Jargon
Two terms doing the heavy lifting in this issue.
- ARPA (average revenue per account). T-Mobile now measures revenue per customer account, about $152.91 a month, rather than per phone line. Higher ARPA means more revenue from the same customers
- FWA (fixed wireless access). Home internet delivered over the cellular network instead of a cable or fiber line, letting T-Mobile sell broadband using capacity it already owns
Bottom Line
Inside the Nasdaq-100®, TMUS pairs network efficiency with real growth. The premium prices durable execution across cycles, not a single quarter.
About the Series
The Nasdaq-100® is a globally recognized index of 100 of the most innovative large cap companies listed on the Nasdaq Stock Market®. The Inside the Index series profiles one constituent each issue, from software to soft drinks and computer chips to potato chips, exploring what makes each business distinctive and the metrics investors should know.
Sources
NASDAQ GLOBAL INDEXES, BLOOMBERG. DATA AS OF 7/31/2026.
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