T-Mobile's 5G Dominance and Valuation: A High-Growth Play in a Consolidating Market

In the fiercely competitive U.S. telecommunications sector, T-Mobile US (TMUS) has emerged as a standout performer, leveraging its 5G network leadership and aggressive customer acquisition strategies to outpace rivals like AT&T and Verizon. With a combination of market share gains, financial outperformance, and a valuation that reflects both growth and efficiency, T-Mobile presents a compelling case for investors seeking exposure to the next phase of wireless innovation.

5G Leadership: Speed, Coverage, and Strategic Expansion

T-Mobile's 5G network has cemented its position as the industry's most advanced, according to an Opensignal report. Independent analytics firm Opensignal reported that T-Mobile's 5G download speed averaged 158.5 Mbps in early 2025, dwarfing AT&T's 53.3 Mbps and Verizon's 46 Mbps. For specific 5G download speeds, T-Mobile reached an astonishing 238.3 Mbps, compared to 155.1 Mbps for AT&T and 136.5 Mbps for Verizon, per TMUS statistics. This performance is underpinned by T-Mobile's mid-band spectrum advantage, which balances speed and coverage—a critical differentiator in a market where 5G availability matters as much as raw speed.

Network coverage further solidifies T-Mobile's edge. The company now provides 5G service to 98% of Americans, according to the Macrotrends TMUS page, with 71.7% 5G availability—a stark contrast to AT&T's 14.7% and Verizon's 10.6%. This ubiquity is particularly valuable as demand for high-speed connectivity surges, driven by streaming, remote work, and the impending rollout of 5G-enabled IoT devices.

Strategic acquisitions, such as the pending US Cellular deal, are amplifying T-Mobile's reach. The acquisition is projected to increase its market penetration from 17.5% to 20% by FY 2025, targeting underserved rural and small-town markets where competitors have struggled to maintain reliable service. This dual focus on urban speed and rural reliability positions T-Mobile to capture a broader share of the U.S. wireless market.

Financial Momentum: Revenue, EBITDA, and Profitability

T-Mobile's financials reflect its operational success. In Q2 2025, the company reported service revenue of $17.4 billion, a 6% year-over-year increase, with postpaid service revenue rising 9% to $14.1 billion, according to AT&T EBITDA margin. Annual EBITDA for 2024 hit $30.929 billion, up 14.2% from 2023, while Q1 2025 Core Adjusted EBITDA reached $8.3 billion—a 8% year-over-year gain. These figures outpace industry peers: Verizon's 2024 EBITDA grew modestly to $46.58 billion, per Verizon EBITDA, while AT&T's EBITDA margin contracted to 32.75% in Q2 2025.

T-Mobile's profitability efficiency, though less transparent than its rivals, appears robust. While exact EBITDA margins are not disclosed, its EBITDA growth and revenue expansion suggest strong cost management. For context, Verizon's EBITDA margin in Q4 2024 was 41.3%, and AT&T's stood at 34.6%. T-Mobile's margin likely lags these figures due to ongoing network investments but remains competitive given its aggressive growth trajectory.

Valuation: A Premium for Growth, or Overpriced Optimism?

T-Mobile's stock trades at a premium to traditional valuation metrics. As of 2025, it has a trailing P/E ratio of 21.65 and a forward P/E of 20.17, compared to AT&T's 17.53 and Verizon's 9.77. Its P/S ratio (3.13) also exceeds AT&T's 1.54 and Verizon's 1.27. These multiples reflect investor confidence in T-Mobile's growth potential but raise questions about sustainability.

However, the premium is arguably justified. T-Mobile's PEG ratio of 1.42 indicates that its valuation aligns with expectations of durable earnings growth. The company added 1.3 million postpaid customers in Q1 2025 alone, with a historic churn rate of 0.92%. Such retention, coupled with its leadership in 5G adoption, suggests that T-Mobile can sustain profitability even as it invests in expansion.

Risks and Considerations

While T-Mobile's momentum is undeniable, risks persist. Its higher valuation leaves it more vulnerable to earnings shortfalls than cheaper peers like Verizon. Additionally, regulatory scrutiny of its US Cellular acquisition and spectrum licensing costs could temper margins. Competitors are also ramping up 5G investments, particularly in rural areas, which may erode T-Mobile's coverage advantage over time.

Conclusion: A Justified Premium in a 5G-Driven Future

T-Mobile's combination of 5G leadership, customer growth, and financial outperformance makes it a standout in the telecom sector. While its valuation multiples are higher than those of AT&T and Verizon, they are supported by superior growth metrics and a strategic focus on underserved markets. For investors willing to pay a premium for innovation and scalability, T-Mobile represents a high-conviction play in the evolving 5G landscape.