T-Mobile US (TMUS 0.26%) already covers more Americans with its 5G network than its competitors, and the next phase of its 5G buildout could be even more important.

The Un-carrier, as it calls itself, said its 5G Ultra Capacity network now covers 260 million people. Now it's rapidly deploying its spectrum licenses to increase capacity and using new technology to increase the speed of its network.

AT&T and Verizon Communications will be competing with a network with better coverage, better availability, and better speeds. That bodes well for T-Mobile investors as the company should bolster its ability to attract new subscribers.

T-Mobile's superior coverage

With better 5G coverage, T-Mobile has the opportunity to win customers in new markets. In fact, T-Mobile has already reached its year-end goal to reach more than 260 million customers with its coverage. Verizon has also achieved its goal to reach 175 million customers, while AT&T has set a goal to cover 130 million but not yet officially achieved it.

Taking a closer look, the gap from Verizon's 175 million to T-Mobile's 260 million is much bigger than it seems. It took T-Mobile nearly a year and a half to go from 165 million to its current coverage.

That lead gives T-Mobile the opportunity to sell its services more effectively in rural markets, where it has historically ceded share to Verizon and AT&T. But with better coverage in those markets, it can start taking customers away from the competition. T-Mobile's home internet offering may be particularly useful in convincing customers to switch in those rural markets, where broadband internet options are often limited.

Better speeds and availability

It's one thing to have access to a 5G network, but if the network is jammed or the top speeds are no good, the coverage doesn't matter. On that front, T-Mobile is throwing a huge amount of spectrum into its 5G network.

First, it's using its legacy PCS spectrum in the 1900 MHz band to deploy another layer of 5G network coverage. It plans to utilize that band in conjunction with its 2500 MHz bands to produce significant speed improvements through what it calls carrier aggregation. The effect is a much wider channel to transmit data, allowing speeds up to 3 Gbps in T-Mobile's testing. Carrier aggregation is currently only available on certain devices, but T-Mobile plans to make it available on other devices in the future.

Verizon claims customers can achieve speeds of 4 Gbps in some areas by utilizing its millimeter wave (mmWave) network. Millimeter wave is only useful in some areas, though, because the wavelength can only travel short distances. T-Mobile plans to use mmWave in places like stadiums in the future.

T-Mobile also has a fresh batch of 2500 MHz spectrum licenses it can deploy following a Federal Communications Commission auction earlier this year. What's more, it was able to snatch up those licenses for a relative bargain since few other competitors placed bids. Both Verizon and AT&T are focused on higher-frequency bands and have spent a lot of capital acquiring and clearing the necessary licenses for their network buildout.

T-Mobile's spectrum position is enviable, and it will allow it to quickly build out the capacity and speeds customers expect of the next-generation wireless network.

Changing customers' minds

While T-Mobile's network advantage is known to people that follow the industry, consumers' opinions have yet to change from the 4G-era Verizon dominated.

Verizon has been holding onto its marketing message around the strength of its network. It still uses the claim "America's most reliable network" in its marketing, but that claim has come under fire.

Meanwhile, T-Mobile is making good inroads at changing customer perception. "In the last three years we have slashed the perceived leadership of Verizon in network leadership," T-Mobile CEO Mike Sievert said at an investors conference earlier this month. "We have slashed that lead that Verizon has in half."

That said, there's still work to do. The longer T-Mobile extends its actual lead in 5G the more likely consumer perception is to catch up with the reality of the situation. That could lead to significantly more switching to T-Mobile in the future, producing sustained subscriber growth.

And as the company leverages its spectrum and network assets, it should see strong growth in free cash flow. That gives it plenty of room to reinvest in its network, extend its lead over the competition, buyback shares, which will support its current stock price. Look for the shares to outperform its peers once again in 2023.