Mid-term AI build-out – and pay-out

Another US operator has posted another strong quarter; this time, T-Mobile has beaten city forecasts on both its earnings and revenue, and promptly raised its full-year guidance. Of interest besides, Bloomberg News has reported that Deutsche Telekom has put the brakes (momentarily) on a formal bid to acquire its US subsidiary outright, citing opposition from its works council and worries about diluting the German government’s stake in the parent company. The German firm’s shares traded higher on the report. The financial press has done a fine job with T-Mobile’s scores, as usual; so they are hardly worth dwelling on here. Instead, the real talking points, buried deep in its earnings call, are about spectrum and physical AI – that T-Mobile will spend more on spectrum in 2027/28, and will make money from physical AI by taking a cut from lower device costs, as compute is offloaded to the edge.

By 2035, and possibly sooner, “millions of robots, drones, [and] all sorts” is “kind of a given”, said Srini Gopalan, chief executive at the firm. He has some choice words for SpaceX, as well – reflecting the views of the tier-one telco community in the US, facing down the noise and excitement about a new terrestrial entrant led by a barrel-chested trillionaire. T-Mobile remains open to commercial resale arrangements, as with its T-Satellite broadband set-up (with SpaceX), but draws a clear distinction with an outright MVNO, whether for consumer or physical AI applications. Gopalan responded: “We see ourselves in the lead in terms of those capabilities, and we see no space for an MVNO here because what additional capabilities does it give us?” Straighter two-way trades on edge compute might work, he said. “If we’re talking about SpaceX as a customer or [vice versa], that’s a purely-commercial agreement.”

Highlights, and further discussion can be found here.