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A Closer Look at T-Mobile’s Capex Priorities

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T-Mobile’s capex

T-Mobile (TMUS), the third-largest US mobile operator, has been continuously investing in capex to improve its network. In the fourth quarter of 2018, T-Mobile spent $1.1 billion on cash capex excluding capitalized interest, up from $0.9 billion in the fourth quarter of 2017 and down from $1.3 billion in the third quarter of 2018.

According to the company, the sequential fall was due to fluctuations in the timing of the build-out of its network, whereas the YoY (year-over-year) increase was mainly the result of the company’s accelerated rollout of 600 MHz of low-band spectrum and its laying the groundwork for 5G technology.

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Expected capex investments in 2019

T-Mobile has guided for 2019 cash capex excluding capitalized interest in the range of $5.4 billion–$5.7 billion. This target includes spending on 5G deployment. In 2018, T-Mobile spent $5.2 billion on cash capex excluding capitalized interest.

In comparison, Verizon (VZ) expects its capex for 2019 to be in the range of $17.0 billion–$18.0 billion, while AT&T (T) expects gross capex of $23.0 billion. Sprint (S) expects its cash capex excluding leased devices to be in the range of $5.0 billion–$5.5 billion in fiscal 2018 (which ends in March 2019).

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