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Investing in Telecommunications

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    Earnings can be a tricky issue when analyzing telecom companies. Many companies have little or no earnings to speak of. To gauge a company's value, telecom industry analysts might turn to the price-to-sales ratio (stock price divided by sales). They also look at average revenue per user (ARPU), which offers a useful measure of growth performance, and the churn rate, the rate at which customers leave (presumably for a competitor).

    T-Mobile US Inc. (TMUS)
    Revenue (TTM): $59.9 billion
    Net Income (TTM): $3.1 billion
    Market Cap: $159.7 billion
    1-Year Trailing Total Return: 68.3%
    Exchange: NASDAQ
    T-Mobile US is a major U.S. wireless carrier offering various data plans as well as consumer and business telecommunications services. T-Mobile also offers prepaid wireless products and services as well. In April 2020, T-Mobile completed its merger with Sprint Corp., which the company expects to sharply increase its capacity by a factor of 14 in the coming six years. It sells devices and services through company owned and operated stores and websites.2

    Plain old telephone calls continue to be the industry's biggest revenue generator, but thanks to advances in network technology, this is changing. Telecom is growing less about voice and increasingly about video, text, and data. High-speed Internet access, which delivers computer-based data applications such as broadband information services and interactive entertainment, is rapidly making its way into homes and businesses around the world. The main broadband telecom technology, Digital Subscriber Line (DSL), has ushered in a new era. The fastest growth comes from services delivered over mobile networks.Of all the customer markets, residential and small business markets are arguably the toughest.

    More info: computer systems engineer

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