T-Mobile's Growth Stunted By Fiber Shortage And Market Rivalry

T-Mobile US Inc. TMUS is grappling with a fiber shortage that could hinder its growth in a competitive market, according to KeyBanc Capital Markets.

The T-Mobile US Analyst: Analyst Brandon Nispel downgraded the rating to Underweight, while establishing a price target of $200.

The T-Mobile US Thesis: While the company is fiber deficient, the latest strategic transactions – of AT&T Inc T with Lumen Technologies Inc LUMN, Charter Communications Inc CHTR with Cox Communication, and Verizon Communications Inc VZ with Frontier Communications Parent Inc (NASDAQ: FYBR) – are focused on converged mobile and home broadband, Nispel said in the downgrade note.

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These developments suggest that a bundled offer may be needed to compete in the market, the analyst stated. Following these strategic deals, T-Mobile US now has a "poor competitive position," he added.

Net adds across the industry seem to be declining, possibly due to macro uncertainty, price hikes, and competition, Nispel said. "Ultimately, we are forecasting elevated churn, a slower net-add environment, and share going to Cable," he further wrote.

TMUS Price Action: Shares of T-Mobile US had declined by 1.6% to $232.04 at the time of publication on Wednesday.

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