After years of competition, the growth of t-mobile us (TMUS.O) has started to slow down. Nowadays, it is turning towards fiber connections, while AT&T (T.N) is far ahead in this costly development area.

For many years, t-mobile us has been dominating the wireless communication market. As a self-proclaimed "non-carrier" company, it has won a large number of customers from companies like AT&T and verizon (VZ.N) through lower prices, more flexible contracts, and ultimately a widespread 5G deployment.

Recently, t-mobile has taken the lead with its home broadband service provided through its 5G connection (i.e., fixed wireless).

Over the past three years, t-mobile's stock price return rate has reached 86%, while the s&p 500 index's return rate is 33%. Meanwhile, AT&T's return rate is 33%, and verizon remains almost flat.

However, t-mobile's era of easy growth may be coming to an end. Although the company recently raised its expected fixed wireless users for 2028 from 8 million in 2025 to 12 million, the growth rate of new users is slowing down. In the second quarter, t-mobile added 0.406 million fixed wireless users, a 27% decrease from the same period last year.

Analyst Frank Louthan of Raymond James said: "We believe that fixed wireless access will account for about 10% of the main household broadband market in the USA. The main drawback of fixed wireless is speed, which although sufficient to meet all consumer needs, is still perceived by consumers as not being at the speed they think they need. Therefore, it will remain a niche product."

In order to continue to take market share from traditional cable TV providers, t-mobile is now turning to home fiber connections, which is a costly investment and has already burdened verizon and AT&T.

According to S&P Global Market Intelligence forecasts, by 2027, the number of residential fiber optic users will reach 30 million, compared to approximately 23 million this year. At the same time, fixed wireless users are expected to grow from 11 million this year to 16 million by 2027.

Due to the high price of fiber optics, S&P estimates that annual total revenue from fiber optics will be approximately three times that of fixed wireless revenue.

AT&T CEO John Stankey recently told CNBC: 'There's nothing that compares to fiber in terms of the marginal cost of adding each incremental unit of traffic. So, it will always be more cost-effective and perform better than any other technology. That's why we are betting on this infrastructure investment.'

Recent trades by Verizon and T-Mobile indicate their adaptation to a fiber-optic future. Verizon reached a deal with Frontier Communications for $20 billion, while T-Mobile invested nearly $6 billion through a joint venture to acquire fiber broadband providers Metronet and Lumen Technologies.

T-Mobile is expected to deploy fiber optics to 12-15 million American households by 2030. Meanwhile, Verizon and Frontier together aim to cover 25 million households through fiber optics, with an expected 9.6 million households subscribing to the service. This transaction may take up to 18 months to complete.

At the same time, AT&T already has 8.8 million AT&T fiber users, totaling 28 million consumer and business fiber locations. The company plans to cover 30 million consumer and business locations by the end of 2025, with hopes to add around 10-15 million more locations.

AT&T's existing competitive advantage means that most of its expensive fiber investments are already completed, while T-Mobile and Verizon are still making rapid progress.

T-Mobile stated at the Capital Markets Day in September that they plan to return up to $50 billion to shareholders by 2027 through share buybacks and dividends. However, analysts point out that T-Mobile may retain some cash for fiber investments.

Analyst Timothy Horan at Oppenheimer wrote in a research report: "[T-Mobile] management has set aside approximately $20 billion, which could potentially be used for more acquisitions, while the market actually hopes these funds will be used to accelerate share buybacks."

T-Mobile is not lacking potential acquisition targets, Lumen Technologies, Windstream, and Google Fiber all remain as independent owners of fiber-optic networks in the USA. However, even if these trades were to happen, T-Mobile would still be a small competitor to AT&T's fiber network.

Investors favor T-Mobile's faster growth and lower capital intensity. Currently, T-Mobile's pe is 23 times, while AT&T and Verizon's pe are both less than 10 times.

However, as T-Mobile shifts towards fiber optics, it will increasingly resemble its larger competitors - and its pe may converge. At the same time, T-Mobile's 1.7% dividend yield is far below AT&T's 5.2% and Verizon's 6.3%.

Given AT&T's leading edge in fiber infrastructure, its prospects may be even smoother.