T-Mobile Best-Positioned Carrier to Weather Looming Storms: Moffett
U.S. wireless carriers are performing well during a period of global turmoil and inflation, but tougher times loom, MoffettNathanson’s Craig Moffett said in a Thursday research note. “U.S. wireless carriers are entirely domestic, with no exposure to European energy shocks…
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or Eurozone recession risks,” he said. “They have no Eurozone earnings and no export exposure to an excessively strong dollar. If there is a U.S. recession, their services are, by and large, indispensable.” But they also face challenges, especially keeping up subscriber growth, he said. Recent growth is “unsustainable” and “far in excess of population growth, and is seemingly poised for a fall,” he said. “A drop in subscriber growth would probably only increase the pressure on carriers to compete on the basis of price and promotions, making matters worse.” Moffett sees T-Mobile as the major player best positioned to “weather” the storm ahead. “The company is growing share of gross additions and is poised to see declines in churn rate,” he said. “With the industry’s best pricing and the industry’s best network, and with still many growth opportunities ahead (not least in rural America), we believe T-Mobile’s share gains are poised to accelerate,” he said.