T-Mobile US, Inc. TMUS recently inked a definitive agreement to establish a joint venture (JV) with KKR & Co. Inc. KKR to acquire Metronet with its majority shareholders, Oak Hill Capital and the Cinelli family. This partnership is expected to empower T-Mobile to cater to the evolving demands of its users through access to advanced connectivity and technology solutions.
Headquartered in Indiana, Metronet is recognized as the fastest-growing pure-play fiber company in the United States and a proficient independent fiber-to-the-home operator. Presently, the company provides fiber solutions to more than 2 million homes and businesses across 17 states, leveraging a cutting-edge broadband platform. Metronet’s 100% fiber network delivers symmetrical multi-gigabit Internet service directly to residences and businesses, meeting the increasing consumer need for seamless, widespread connectivity.
The acquisition, subject to customary closing conditions and regulatory approvals, is expected to close in 2025. Upon closing, T-Mobile is expected to acquire a 50% equity stake in the JV for approximately $4.9 billion.
Post-acquisition, Metronet will be operating as a wholesale services provider for its retail customers, while T-Mobile will likely have full responsibility for the former’s residential fiber operations and customers. T-Mobile will integrate Metronet’s expertise in digital and fiber infrastructure with KKR’s strong heritage of corporate partnership and global fiber franchise to further expand its fiber footprint and deliver real value to customers while addressing a growing demand for fast and reliable broadband.
This collaboration is poised to drive substantial growth for Metronet, projected to reach 6.5 million homes by 2030, strengthening its position in the fiber broadband market. Additionally, it is also expected to bolster T-Mobile’s existing 5G Home Internet portfolio, which serves more than 5 million households and businesses nationwide, thereby improving T-Mobile’s top-line performance in the upcoming quarters.
Shares of T-Mobile have gained 25.7% over the past year compared with the industry’s growth of 25.7%.
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Zacks Rank and Key Picks
T-Mobile currently carries a Zacks Rank #3 (Hold).
A couple of better-ranked stocks in the broader industry have been discussed below.
Ooma, Inc. OOMA offers cloud-based communications solutions, smart security and other connected services. The company’s smart software-as-a-service and unified-communications-as-a-service platforms serve as a hub for seamless communications and networking infrastructure applications. It currently sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
It delivered a trailing four-quarter average earnings surprise of 8.90%. In the last reported quarter, Ooma delivered an earnings surprise of 27.27%.
Telephone and Data Systems, Inc. TDS, sporting a Zacks Rank of 1 at present, provides wireless products and services, cable and wireline broadband, TV and voice services to approximately 6 million customers in Chicago.
In the last reported quarter, TDS delivered an earnings surprise of 145.45%.
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See Stocks Now >>Telephone and Data Systems, Inc. (TDS) : Free Stock Analysis Report
KKR & Co. Inc. (KKR) : Free Stock Analysis Report
T-Mobile US, Inc. (TMUS) : Free Stock Analysis Report
Ooma, Inc. (OOMA) : Free Stock Analysis Report
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