Zacks Industry Outlook Highlights T-Mobile US, United States Cellular Corporation and ATN International

For Immediate ReleaseChicago, IL – March 11, 2025 – Today, Zacks Equity Research discusses T-Mobile US, Inc. TMUS, United States Cellular Corporation USM and ATN International, Inc. ATNI.Industry: WirelessLink: https://www.zacks.com/commentary/2427636/3-wireless-stocks-likely-to-benefit-from-positive-industry-trendsThe Zacks Wireless National industry is set to benefit from an accelerated 5G rollout and increased fiber densification driven by healthy demand trends. However, high capital expenditures for infrastructure upgrades, supply-chain disruptions amid the prolonged Russia-Ukraine war, Middle East tensions and high customer inventory levels have dented the growth prospects to some extent.Against this backdrop, T-Mobile US, Inc., United States Cellular Corporation and ATN International, Inc. are likely to gain from higher demand for scalable infrastructure for sustainable networks with a wide proliferation of the Internet of Things (IoT), wireless traction and solid broadband momentum.Industry DescriptionThe Zacks Wireless National industry primarily comprises firms that provide a comprehensive range of communication services and business solutions. These include wireless, wireline, local exchange, long-distance calls, data/broadband and Internet, video, managed networking, messaging, wholesale and cloud-based services to retail consumers.The firms within the industry also offer IP-based voice and data services, targeted advertising, television, streaming content, cable networks and publishing operations, multiprotocol label switching networking, fiber optic long-haul networks and hosting and communications systems to businesses and government agencies. In addition, the firms provide edge computing services that allow businesses to route application-specific traffic where required and are most effective — whether in the cloud, the network, or on their premises.What's Shaping the Future of the Wireless National Industry?5G Ecosystem Gaining Traction: Most industry participants are deploying the latest 4G LTE Advanced technologies to deliver higher peak data speeds and capacity, driven by customer-focused planning, disciplined engineering and investments for infrastructure upgrades. The companies are also expanding their fiber optic networks to support 4G LTE and 5G wireless standards as well as wireline connections.Further, leading firms within the industry have been deploying the C-Band spectrum to gain additional coverage. These mid-band airwaves offer significant bandwidth with better propagation characteristics for optimum coverage in rural and urban areas compared with mmWave. With low latency and increased bandwidth, business enterprises are increasingly embracing the exciting possibilities offered by artificial intelligence and the IoT via the real-time transfer of mobile data. As the 5G ecosystem evolves, customers are expected to experience significant enhancements in coverage and speed.Eroding Margins: Increased infrastructure spending for network upgrades has largely compromised short-term margins. Aggressive promotional expenses, lucrative discounts and the adoption of several low-priced service plans to attract and retain customers are eroding profits. A steady decline in linear TV subscribers and legacy services due to a challenging macroeconomic environment and high inflation adds to the margin woes.Consequently, the industry firms are increasingly seeking diversification from legacy telecom services to more business, enterprise and wholesale opportunities. Companies are making significant investments to upgrade their network and product portfolio, including considerable advances in software-defined, wide-area network capabilities and a new Cloud Core architecture, which is affecting their profitability.Moreover, high raw material prices due to the Middle East tensions, the prolonged Russia-Ukraine war and the consequent economic sanctions against the Putin regime have affected the operation schedule of various firms. Wireless operators face challenges due to the disruptive rise of over-the-top service providers in this dynamic industry.Price-sensitive competition for customer retention in the core business is expected to intensify in the coming days. Aggressive competition is likely to limit the ability to attract and retain customers, affecting operating and financial results.Software-Centric Network Rationalization: The industry participants are realigning their wireless network toward a software-centric model to cater to increasing business demands and customer needs through remote facilities. The industry players focus on improving operational efficiencies through network simplification and rationalization, thereby boosting end-to-end provisioning time and driving standardization.Moreover, the firms are offering a variety of pathways for delivering services through a combination of network-based video transcoding, packaging, storage and compression technologies to provide new IP video formats, live TV, streaming services and home gateways to connected devices inside and outside the home.Zacks Industry Rank Indicates Rosy ProspectsThe Zacks Wireless National industry is housed within the broader Zacks Computer and Technology sector. It carries a Zacks Industry Rank #24, which places it in the top 10% of more than 250 Zacks industries.The group's Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates solid prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.Before we present a few wireless national stocks that are well-positioned to outperform the market based on a strong earnings outlook, let's take a look at the industry's recent stock market performance and valuation picture.Industry Outperforms S&P 500, SectorThe Zacks Wireless National industry has outperformed the S&P 500 composite and the broader Zacks Computer and Technology sector over the past year.The industry has jumped 41.8% over this period compared with the S&P 500 and the sector's growth of 13.8% and 12.8%, respectively.Industry's Current ValuationOn the basis of the trailing 12-month enterprise value-to-EBITDA (EV/EBITDA), which is the most appropriate multiple for valuing telecom stocks, the industry is currently trading at 9.54X compared with the S&P 500's 17.05X. It is also below the sector's trailing 12-month EV/EBITDA of 16.4X.Over the past five years, the industry has traded as high as 9.57X, as low as 5.4X and at the median of 7.31X.3 Wireless National Stocks to Keep a Close Eye OnT-Mobile: Headquartered in Bellevue, WA, T-Mobile is a leading national wireless service provider. The company offers services under the T-Mobile, Metro by T-Mobile and Sprint brands. T-Mobile is benefiting from industry-leading postpaid customer growth with a record-low churn rate. The company's dedicated 5G spectrum assets, which have superior propagation and a strong emphasis on customer experience are supporting the top line.Its Ultra Capacity 5G network is powered by the mid-band 2.5 GHz spectrum, which delivers superfast speed, covers more than 330 million people and ensures a superior 5G experience. The stock has gained 61% over the past year. It has a long-term earnings growth expectation of 16.6% and delivered an earnings surprise of 11.9%, on average, in the trailing four quarters. T-Mobile carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.US Cellular: Headquartered in Chicago, IL, U.S. Cellular is the fourth largest full-service wireless carrier in the United States. The company provides a range of wireless products and services, and a high-quality network to increase the competitiveness of local businesses and improve the efficiency of government operations.U.S. Cellular is expanding its footprint while adopting unlimited plans to enhance average revenue per user. The company has a mid-band spectrum in almost all of its operating markets. This Zacks Rank #1 stock has gained 83.8% over the past year. It delivered an earnings surprise of 67.8%, on average, in the trailing four quarters.ATN International: Headquartered in Beverly, MA, ATN International offers digital infrastructure and communications services with a focus on rural and remote markets. The company is progressing steadily with its "Glass-and-Steel" network expansion strategy and is gradually moving away from the legacy wireless wholesale business.The acquisition of Sacred Wind Enterprises by Commnet Broadband, which is a wholly owned subsidiary of ATN International, is likely to extend its regional footprint with a complementary portfolio. It aims to focus more on the rural markets to augment its leading position with support from government stimulus programs for broadband deployment in under-served areas. ATN International has a long-term earnings growth expectation of 10%. 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Click to get this free report United States Cellular Corporation (USM): Free Stock Analysis Report ATN International, Inc. (ATNI): Free Stock Analysis Report T-Mobile US, Inc. (TMUS): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks