T-Mobile’s capital expenditure
To boost its network, T-Mobile (TMUS) continues investing in capital expenditure (or capex). The company has continued to improve its network by deploying more low-band spectrum.
Wall Street expects T-Mobile’s spending on cash capex to rise ~5.2% YoY (year-over-year) to reach ~$1.4 billion excluding capitalized interest in 2Q17.
In 1Q17, T-Mobile spent $1.5 billion on capex, compared to the $1.3 billion excluding capitalized interest it spent in 1Q16, taking into consideration its front-end loaded network spending. T-Mobile’s management believes that the carrier could see rising demand without significantly rising capex going forward.
Expected capex investments in 2017
For 2017, T-Mobile expects its cash capex to be between $4.8 billion and $5.1 billion, which doesn’t include its capitalized interest. In contrast, TMUS’s competitor AT&T (T) expects to invest ~$22 billion in capex, whereas Verizon (VZ) expects its capex to be between $16.8 billion and $17.5 billion.
Meanwhile, for its fiscal 2017, which will end in March 2018, Sprint (S) expects its cash capex to be between $3.5 billion and $4.0 billion, which doesn’t include the impact of its leased devices sold through indirect channels.
Sprint’s and T-Mobile’s lower capex investments have resulted from their lower operating cash flows and the rising debt on their balance sheets.