T-Mobile vs. Verizon: Two Very Different Ways to Own the Same Industry
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T-Mobile US (NASDAQ:TMUS | TMUS Price Prediction) and Verizon (NYSE:VZ) raised 2026 guidance in late July earnings. T-Mobile asks investors to pay for subscriber and market share increases. Verizon asks them to collect a large dividend while its turnaround plays out.
Premium Plans Lift T-Mobile as Verizon Stops Buying Customers
At T-Mobile, postpaid service revenue rose 12.6% to $15.85 billion. More than 60% of new customers chose premium plans. Port-in ARPAs ran about 20% above port-outs. The UScellular deal opens rural markets where T-Mobile holds 24% of homes. CEO Srini Gopalan: “We’re just getting started.”
Verizon cut device subsidies. Wireless equipment revenue fell nearly 20% and total revenue slid 0.7%. Postpaid phone net additions reached 184,000, versus a 9,000 loss a year earlier. Churn improved to 0.92%. CEO Dan Schulman: “The era of just the free handset, that’s gone right now.” Fiber connections reached 10.9 million, up 43.3%.
| Business Driver | T-Mobile | Verizon |
|---|---|---|
| Growth Engine | Postpaid wireless, 5G broadband | Fiber, combined packages |
| 2026 Capex | About $10.0B | $16.0B to $16.5B |
Buybacks Power T-Mobile While Dividends Anchor Verizon
T-Mobile raised its 2026 shareholder return authorization to $18.2 billion from $14.6 billion and bought back $2.2 billion in the quarter. Shares are down 17.64% this year. With a yield of only 2.52%, the stock depends on growth.
Verizon’s 6.08% yield comes from a $0.7075 quarterly dividend. Buybacks are limited at $4.5 billion. After the Frontier deal, net unsecured debt rose to 2.5x adjusted EBITDA from 2.2x. Shares are up 18.41% year to date.
| Lens | T-Mobile | Verizon |
|---|---|---|
| Forward P/E | 12x | 9x |
| Hold Ratings | 5 | 15 |
Verizon Must Turn Discipline Into Revenue by Year-End
Verizon expects mobility and broadband service revenue growth to speed up to about 3% in Q3 and 4% in Q4. Wireless ARPA fell 1.4% to $168.35. At T-Mobile, watch whether service revenue growth holds near the 6% forecast for Q3.
Matching Each Carrier to the Investor It Fits
T-Mobile suits growth investors seeking subscriber increases. Analysts agree, with 9 Strong Buy and 14 Buy ratings. Postpaid churn rising to 0.99% warrants caution.
Verizon fits income investors. Its Hold ratings suggest Wall Street wants proof the turnaround works. If ARPA keeps falling, the dividend story weakens. If T-Mobile’s churn keeps rising, its higher valuation becomes harder to justify.
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Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.
