T-Mobile’s free cash flow is poised for growth in the coming years, analysts have said, as costs related to the buyout of rival Sprint Corp wind down and more customers sign up for the telecom firm’s 5G networks at competitive prices. The buyback announcement comes a day after T-Mobile announced the sale of its wireline business to Cogent Communications Holdings Inc in a bid to focus more on 5G.
In an effort to reward shareholders after outperforming rivals, wireless carrier T-Mobile US Inc. on Thursday unveiled a $14 billion share repurchase programme that will go through September of next year. In after-hours trading, its shares increased 2.8% to $149.47. The stock has increased 25.3% so far this year, outperforming rival AT&T’s 9.7% decline and Verizon’s 20.5% decline.
The repurchases are expected to be made from available cash on hand and proceeds of one or more debt issuances or other borrowings, the company said. In its investor day last year, T-Mobile executives had said the company expects free cash flow growth to support $60 billion in stock buybacks from 2023 to 2025.