From the newsletter (sign-up if you want it sooner): T-Mobile’s latest Q2 results make the case for it as the West’s growth leader among mobile operators. But they also show the divergent strategies reshaping the telecom industry. From mobile-first expansion to fiber infrastructure and AI networking, operators and vendors are placing very different bets on where the next wave of value will emerge.
Four times every-tier-one-telco-in-the-world – that is the rate of annual financial reporting RCR is required to do to properly capture all the individual angles in this weird telco story. Without many staff, it might be added. Which is impossible, of course; and so, while we picked up AT&T’s scores yesterday, and wrote about Nokia today, we might miss certain profiles as we go. The only way, in the end, is just to capture the broader trends, and linger here and there as we go. But what is there to say? Let’s have a go; if just because we have a chance, late Thursday, to take a quick look at T-Mobile in the US, which has just dropped a set of Q2 numbers that mark its status as growth-leader in the west.
Service revenue ($19bn) was up 9% on the year-ago quarter; postpaid service revenue ($15.9nm) was up 13%. It is carrying on from where it left off last time. Compare the latter (loosely) with AT&T’s second quarter returns yesterday, which said revenue growth across its ‘advanced’ categories was 5.1%, pegged at $23.5bn for the period. Note, these are not apples-for-apples scores, but they show the growth rates in their MPV categories, respectively. Again, it is a dicey comparison, but you go down the ‘telco’ stack, take the latest group scores from Ericsson and Nokia, and see a pure-play mobile vendor recording slimmer sales and fatter margins, and an AI agitator on a roll in the ‘supercycle’.
Which is ironic: T-Mobile is the new king of 5G SA in the US, with a nascent business proposition, and hardly anything in the way of fiber, whether to connect homes or data centers; whereas AT&T, the old aristocrat of US mobile, has just said “fiber is best” for AI, and is pumping money into infrastructure to grow its fiber network by 50% in a few years. In other words, at operator level, the opposite is true at operator level – where the purist is making hay, posting handsome double-digit growth, and the expansionist is straightening its jacket to raise its bottom-line as its top line splurts-out low single-digit growth, if any at all. None of which is quite fair; all four of them look organized.
But what does that say? Five years ago, T-Mobile was the disruptor, robbing its peers, and AT&T was the incumbent, mostly defending its base. Today, T-Mobile sounds (in certain ways) like the premium mobile provider in the US, and AT&T sounds like a national infrastructure company. But everyone has an angle on this AI story. T-Mobile is proving there is still easy money in mobile, so long as you are the best in the business (as it would claim). AT&T is proving that fixed-mobile convergence improves telco economics, near term, and spreads the AI gamble. The problem, for now, is the AI gamble is still stuck in the data center; so both are dealing, quarter to quarter, in fairly familiar trades.
Nokia’s results are good because it has, by virtue of shrewd acquisitions (Alcatel-Lucent in 2015 and Infinera in 2025), the wares to capitalize on the new inter-AI comms bonanza, mostly in the cloud, but going long-haul over land and under sea – back from metro networks. Ericsson is waiting on (or rather, driving as hard as it can) the transition, closer to the edge; so is Nokia – although not so close to the edge, these days, as it hawks its ECE edge unit to anyone who will listen. And Lumen, as yesterday, has put it all on black: AI interconnects, everywhere, made programmable and autonomous in line with the most exacting network demands from the most wealthy network customers.
Again, there is so much crossover in here that you can get lost; the message is as much about the direction of travel, as the companies themselves. Fascinating to watch. Anyway, more from T-Mobile in its results announcement, included below.
