FILE PHOTO: A T-Mobile shop is pictured in San Ysidro, San Diego, California, U.S., October 26, 2017. REUTERS/Mike Blake/File Photo
(Reuters) -T-Mobile said on Wednesday it expects adjusted free cash flow between $18 billion and $19 billion in 2027 as the telecom operator laid out a three-year growth plan at its Capital Markets Day event in San Francisco.
The company outlined its expectations for growth on the back of strong customer additions, as well as new tech collaborations with AI chip firm Nvidia and ChatGPT maker OpenAI.
T-Mobile, one of the top three carriers in the U.S., has seen increased adoption of its premium plans that offer streaming packages along with unlimited offerings.
It plans to return up to $50 billion to shareholders through 2027 through share buybacks and dividends.
T-Mobile also forecast service revenue to be between $75 billion and $76 billion, and core adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) between $38 billion and $39 billion for 2027.
Analysts had expected the company to report adjusted free cash flow of $18.9 billion for 2027, according to Visible Alpha.
MoffettNathanson analyst Craig Moffett said the company's outlook was "more or less" in line with expectations.
"There was nothing in the guidance one way or the other that is going to change anyone's perspective on the stock," he said, adding that T-Mobile is "easily the best breed in Telecom."
T-Mobile expects to add 12 million 5G broadband customers by 2028, CEO Mike Sievert said.
The company plans to launch a new AI decision-making platform called IntentCX, in partnership with OpenAI, for more personalized customer solutions.
It will collaborate with Nvidia, Ericsson and Nokia to design mobile networks using AI.
"The investments we make in all of our future network capabilities fit within the $9 to $10 billion capex envelope that we're outlining," Sievert added.
T-Mobile's shares, which have gained more than 20% so far this year, closed down 3%.
(Reporting by Harshita Mary Varghese in Bengaluru; Editing by Alan Barona and Shounak Dasgupta)
