T-Mobile Posts Solid Margin Gains Despite Accelerating Customer Additions

T-Mobile regained the lead in the U.S. wireless industry during the third quarter, adding more postpaid phone customers than any other carrier. The firm clearly benefited from the price increases Verizon and AT&T implemented earlier this year. More impressive, in our view, profitability increased nicely as the bulk of the Sprint network decommissioning has been completed. We have increased our margin estimates modestly, lifting our fair value estimate to $165 from $155. We believe the shares are undervalued, though not to the same degree as rivals like Verizon.