T-Mobile US reported mostly strong results for its fiscal fourth quarter of 2023, but management raised future-looking eyebrows by stating the carrier was potentially looking at an acquisition of a rival or 5G network-bolstering fiber assets.

T-Mobile US CFO Peter Osvaldik during the carrier’s Q4 earnings call stated that it continues to look at its “capital allocation methodology,” which he said tries to identify “the highest value-creating opportunities” around investing in its network, growth of its core business and “adjacent businesses.”

“Then, of course, we'll look at all other things beyond that, whether that's in the fiber space, whether that's the UScellular’s, we'd look at that process and see are there value-creating opportunities,” Osvaldik added.

Those two opportunities could spell out T-Mobile’s strategic investment plans for 2024, highlighting areas where the carrier can further flesh out its deployment plans.

The UScellular opportunity popped up last year when the carrier’s parent company Telephone and Data Systems (TDS) stated plans for exploring “strategic alternatives” for its wireless operations. UScellular is currently the nation’s fifth-largest facilities-owned wireless operator.

Rumors had initially linked a possible deal with Dish Network.

“They have towers, they have spectrum and they operate in geographies that we haven’t fully built out so it’d be something that we’d be interested in looking at,” Tom Cullen, EVP of corporate development at Dish Network, said during a Dish Network presentation.

However, Dish Network is also battling its own financial demons, which includes some fiscal juggling with T-Mobile US.

T-Mobile has also been rumored to be looking at acquiring or investing in fiber giant Frontier Communications. That deal could help T-Mobile US further power a fiber-based broadband service that would run alongside the carrier’s increasingly popular 5G-based fixed-wireless access (FWA) service.

Frontier last summer did close on a $2.1 billion financing deal that it says will allow it to fully fund its ongoing fiber deployment plans and “provides the company with flexibility for future refinancing.” However, it’s in the midst of a revolt from activist investment firm Jana Partners, which early last month sent a letter to Frontier’s board asking that it “engage in a comprehensive review of strategic alternatives to maximize value for shareholders.”

Osvaldik's comments temporarily spiked the stock price for all parties involved.

T-Mobile CEO Mike Sievert attempted to temper expectations during the latest earnings call about an imminent deal.

“There's no big deal on the horizon that we see that would knock us off our pace, and I think that's important calculus,” Sievert said. “If something presented itself, it made a lot of sense for shareholders, our job is to bring it to you. But right now, we don't see it.”

What does continue to knock the socks off of shareholders is T-Mobile's ongoing FWA growth.

The carrier added 541,000 FWA connections during the last three months of 2023, which was slightly ahead of the first three quarters of the year, and ended 2023 with 4.8 million FWA connections. Those customers are also starting to generate additional revenues as the carrier begins to move away from promotional pricing offers.

A recent report from Parks Associates found 66% of customers subscribing to a FWA service from a wireless operator “consider their plans to be at a fair or good price.” This was a significantly higher sentiment than the 51% of fiber customers and 35% of cable subscribers who felt they were getting a good deal.

“Incumbent ISPs in previously uncompetitive markets are most at-risk from growing awareness of [mobile network operator] FWA plans,” Kristen Hanich, director of research at Parks Associates, wrote. “They must be prepared to face an increasingly competitive market as additional FWA capacity comes online.”

T-Mobile has maintained consistent FWA performance over the past year despite the robust connection growth, which highlights its push toward injecting more capacity into the service. Network speed test monitoring firm Ookla last month reported that T-Mobile's FWA download speeds were right around 120 Mb/s for all of 2023, despite the carrier adding around 1.6 million new connections over the previous 12 months.

T-Mobile has worked to deepen the use of its 2.5 GHz spectrum holdings to support its FWA growth. The carrier recently gained government approval to access more of those spectrum assets and the carrier has also started to test the use of its millimeter-wave (mmWave) spectrum holdings to further boost FWA network speeds.

Sievert had previously told an investor conference that the carrier has designed its network to support up to 80 gigabytes of usage per month by each customer. However, T-Mobile EVP and CTO John Saw said during a keynote speech at the MWC Las Vegas event that its FWA customers were using around 450 gigabytes of data per month.

The carrier has managed this disparity by parsing out FWA connections to its network. This includes monitoring of network capacity per cell site, which can impact on a day-to-day basis the ability for new customers to sign up for the service.

“If three people in your neighborhood sign up, or four or five people depending on the sector, the whole neighborhood comes off our list until such time as we’ve got that excess capacity again,” Sievert had previously stated.

Despite those network management moves and the potential for greater revenue, Sievert maintained T-Mobile's FWA growth projections during the most recent call.

“We haven't drawn any new conclusions versus what we previously told you about possible models beyond this initial capital-light model that we have for high-speed internet,” Sievert said. “Our forecast all along has said that model takes us to 7 million to 8 million subscribers. We're well on our way. We'll monitor that as we get closer, and we have a lot of time left. So stay tuned if we're able to provide you with an update on that in the future, but no update today.”