Joe Raedle
Earlier this week, we updated our Consumer Pulse report, which is a monthly survey we’ve been running on 1,500 US consumers balanced to census since 2014.
Among a huge array of questions we survey consumers on, one topic is smartphones. More specifically, since 2014, we have asked smartphone owners which service provider they use.
As shown below, in our latest monthly survey, over 30% of respondents reported that they use T-Mobile (TMUS). That is a record high for the company and is essentially a doubling in market share from what was the norm for the company throughout the mid to late 2010s.
T-Mobile appears to be the new leader in the cell service space, eclipsing prior behemoths Verizon (VZ) and AT&T (T).
When you look at the performance of the stocks for those same wireless telecommunication companies, it only becomes more evident the degree to which T-Mobile has left its competition in the dust.
In the chart below, we show the performance of TMUS versus Verizon and AT&T since T-Mobile’s IPO in April 2007. As shown, after its IPO, TMUS posted large but temporary gains.
In fact, after falling back below the IPO price six months after debuting, the stock wouldn’t recover those levels for another nine years.
Meanwhile, Verizon was the clear leader of the pack and more or less meandered sideways. TMUS had caught up to Verizon by 2017, and come 2020 and its merger with Sprint nearing completion, TMUS began to run away as the clear winner.
Today, the stock has now risen 253.8% since its IPO, compared to a modest 13.7% gain from VZ and a dreary 42.8% loss for T in that same span.
Compared to the S&P 500, once again T-Mobile has been the clear winner. As shown below, T-Mobile is the only telecommunication services stock that has outperformed (albeit marginally) the S&P 500 since its debut in 2007. Meanwhile, Verizon and AT&T are underperforming by wide margins.
Finally, comparing these stocks’ market caps, T-Mobile didn’t hold a candle to its competitors for much of its history. The merger with Sprint which was completed in 2010 significantly lifted the company’s valuation, bringing it within a much more tangible reach of VZ or T.
However, it still didn’t catch up for another couple of years. In that time, TMUS managed to continue to increase its market cap while VZ and T were in the midst of steady downtrends.
By the third quarter of 2022, TMUS surpassed both VZ and T. Today it is not only the largest wireless telecom by market cap, but it is also the only one whose valuation is making new highs.
Editor’s Note: The summary bullets for this article were chosen by Seeking Alpha editors.
