Overview
Morgan Stanley continues to favor T-Mobile in the telecom sector while warning that satellite broadband expansion will materially reshape the connectivity market. The firm projects that Starlink will attract roughly 16 million consumer and small business broadband subscribers in the United States by 2030, a shift that has prompted across-the-board downward revisions to incumbent broadband providers' forecasts.
Strategic positioning and valuation
Despite the competitive threat from satellite operators, Morgan Stanley kept an Overweight rating on T-Mobile and reiterated it as its top pick. The bank lowered T-Mobile's price target from $260 to $230 and rolled that target forward to the middle of 2027. That revised target equates to about 8 times enterprise value to forward adjusted EBITDA under the firm's modeling.
The research note highlights structural advantages for T-Mobile in a changing market. Its existing back-book of customers is priced roughly 10 percent or more below peer carriers, and the company has seen strong uptake of premium plans among new subscribers. Morgan Stanley judges these dynamics supportive of service revenue growth in the mid-to-high single digits through the end of the decade.
On network exposure, the bank argues T-Mobile is least vulnerable to stranded asset risk tied to satellite competition. The company maintains a relatively small owned fiber footprint and favors capital-light fiber deployments through joint ventures. For fixed wireless access (FWA), T-Mobile adopts a capacity-driven deployment strategy rather than an asset-heavy rollout, which Morgan Stanley views as a defensive posture against emerging satellite alternatives.
Broader industry implications
Morgan Stanley's outlook favors wireless carriers over cable companies as the connectivity sector absorbs disruption. The bank notes that major cable operators have been shedding broadband subscribers for several years; Comcast and Charter have each been losing roughly 500,000 broadband subscribers annually, according to the research. Morgan Stanley now expects that as Starlink scales, cable and broadband providers will continue to see annual broadband losses in the range of 400,000 to 500,000 subscribers.
To reflect evolving market dynamics, Morgan Stanley trimmed several near-term revenue estimates for T-Mobile. For second-quarter 2026, prepaid service revenue was lowered by about $100 million to $2.45 billion, a change tied to elevated consumer migration toward postpaid plans. Wholesale service revenue estimates were cut by $55 million to $635 million, reflecting ongoing run-off of mobile virtual network operator (MVNO) revenues. The firm expects these headwinds to be at least partly offset by postpaid average revenue per account growth.
Looking further ahead, Morgan Stanley adjusted long-term net-add expectations to account for satellite entrants. In its updated scenarios for 2028-2030, the bank models annual declines versus prior estimates of roughly 600,000 net additions for fixed wireless access and 100,000 net additions for fiber.
Corporate actions and coverage
In recent corporate developments, T-Mobile declared a quarterly cash dividend of $1.02 per share. Separately, Wells Fargo has initiated coverage on the company with an Equal Weight rating.
Note: This article presents Morgan Stanley's published estimates and company actions as reported; it does not introduce additional forecasts beyond those provided by the firm.