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How T-Mobile Is Allocating Its Capex

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T-Mobile’s capex

T-Mobile (TMUS) has been continuously investing in capex to improve its network and acquire additional spectrum for future use. The telecommunications company continued to enhance its network in the first half of 2018 via the deployment of more low-band spectrum.

T-Mobile expects its cash capex to be in the range of $4.9 billion–$5.3 billion in 2018. This estimate excludes capitalized interest but includes expenditures for 5G (fifth-generation) deployment as well as the company’s small cell buildout plans. T-Mobile is planning to roll out 25,000 small cells in 2018 and early 2019.

In the first quarter, T-Mobile spent $1.3 billion on cash capex excluding capitalized interest, up from $0.9 billion in the fourth quarter of 2017. This sequential growth was mainly the result of seasonality, as cash capex would be front-end loaded in 2018.

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Expected peer capex investments in 2018

In comparison, Verizon (VZ) expects its capex to be in the range of $17.0 billion–$17.8 billion in 2018, whereas AT&T (T) expects to spend ~$25.0 billion on capex. Meanwhile, excluding leased devices, Sprint (S) expects its cash capex to be in the range of $5.0 billion–$6.0 billion in its fiscal 2018, which will end on March 2019.

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