T-Mobile Projects Adjusted Free Cash Flow of Up to $19 Billion by 2027, According to Reuters

By Harshita Mary Varghese

T-Mobile announced on Wednesday its expectation of adjusted free cash flow ranging from $18 billion to $19 billion for 2027, revealing a three-year growth strategy at its Capital Markets Day event in San Francisco.

The telecom operator anticipates growth driven by strong customer increases and new technological partnerships with AI chip manufacturer Nvidia and OpenAI, the creator of ChatGPT.

As one of the top three carriers in the United States, T-Mobile has experienced a rise in uptake of its premium plans, which bundle streaming services with unlimited options.

The company plans to return as much as $50 billion to shareholders by 2027, primarily through share buybacks and dividends. Additionally, T-Mobile projects service revenue between $75 billion and $76 billion, and core adjusted EBITDA between $38 billion and $39 billion for 2027.

Analysts were expecting the company to report adjusted free cash flow at approximately $18.9 billion for 2027, according to market projections. Craig Moffett, an analyst at MoffettNathanson, commented that T-Mobile’s outlook aligns closely with these expectations, noting that nothing in the guidance will significantly alter investors’ views on the stock. He described T-Mobile as "easily the best breed in Telecom."

T-Mobile also aims to increase its 5G broadband customer base by 12 million by 2028, as stated by CEO Mike Sievert. The company intends to launch an AI decision-making platform named IntentCX, in collaboration with OpenAI, to enhance personalized customer experiences.

The telecom giant will partner with Nvidia, Ericsson, and Nokia to develop mobile networks utilizing AI technology. Sievert elaborated that the investments planned for future network capabilities will stay within a capital expenditure envelope of $9 to $10 billion.

Despite a 20% increase in share value this year, T-Mobile’s stock closed down by 3% following the announcement.