T-Mobile US, Inc. (NASDAQ: NASDAQ:TMUS) outlined a comprehensive three-year growth strategy at its Capital Markets Day event, aiming to boost its financial metrics significantly by 2027. The company's senior leadership team presented plans to build upon its network, customer service, and digital transformation to drive profitable growth and shareholder returns.
T-Mobile's strategy includes extending its network leadership through advanced technology deployments like Massive MIMO and the first broad deployment of 5G Advanced in the U.S. The company has also announced collaborations with NVIDIA (NASDAQ:NVDA), Ericsson (BS:ERICAs), and Nokia (HE:NOKIA) to create an AI-RAN Innovation Center, which will integrate AI and RAN innovations for enhanced network experiences.
In customer experience, T-Mobile is leveraging AI and digital tools to transform interactions, aiming for digital completion of most customer activations and upgrades. A partnership with OpenAI will develop a predictive AI platform named IntentCX, which is expected to reduce customer contacts to Care by 75%, improving satisfaction and reducing operating costs.
The company also plans to grow its core wireless business by capturing market share in underpenetrated segments. T-Mobile for Business is set to focus on small to mid-market companies and deliver advanced solutions to enterprise and government customers.
In the broadband sector, T-Mobile aims to reach 12 million 5G broadband customers by 2028, with a fiber partnership expected to pass 12 to 15 million households by the end of 2030. The company anticipates an internal rate of return of around 20% from its fiber joint ventures.
Financially, T-Mobile forecasts service revenue growth to accelerate at a compound annual growth rate (CAGR) of approximately 5% from 2023 to 2027, with expected service revenues of $75 to $76 billion in 2027. The company also projects a nearly $10 billion increase in annual Core Adjusted EBITDA by 2027, with a CAGR of about 7% from 2023 to 2027. Adjusted Free Cash Flow is expected to reach $18 to $19 billion in 2027, marking a CAGR of 8% from 2023 to 2027.
To balance capital allocation, T-Mobile plans to maintain a 2.5 times leverage target and anticipates $9 to $10 billion in annual capital expenditures to fund network leadership. The company is also committed to stockholder returns through dividends and share repurchases.
The Board of Directors has declared a cash dividend of $0.88 per share, payable on December 12, 2024, to stockholders of record as of November 27, 2024, representing a 35% increase from the previous quarter.