Skip to main content

New Reality for Mobile Service Providers in North America

Sometimes the only way to increase market share is to go downward. Within the North American mobile communication market, where the monthly service price has remained relatively high when compared to more competitive markets, lowering subscriber costs was an inevitable outcome.

Wireless revenue increased by just 1.1 percent year-to-year among benchmarked U.S. mobile network operators in 3Q16, according to the latest market study by Technology Business Research (TBR).

Let's give credit where it's due. This situation is primarily the result of T-Mobile growing revenue 17.8 percent year-to-year on the strength of its 'Un-carrier' go-to-market strategies.

Mobile Phone Service Market Development

"While T-Mobile and Sprint remain able to increase wireless revenue by generating higher postpaid phone additions through competitive pricing, Verizon and AT&T are relying on value-added services to offset declining revenue from slowing phone subscriber growth," said Chris Antlitz, senior analyst at TBR.

Rather than undercutting competitors to boost subscriber additions, Verizon and AT&T were forced to focus on improving profitability by retaining the subscribers that were immune to their higher prices. They also shifted focus to support their higher-margin Internet of Things (IoT), mobile video and media businesses.

Combined wireless revenue among Tier 1 Canadian carriers rose 3.4 percent year-to-year. In fact, all Tier 1 Canadian operators increased service revenue in 3Q16 due to subscriber additions stemming from the launch of competitive pricing promotions and the freedom for more customers to switch carriers.

Moreover, all Tier 1 Canadian mobile service providers improved wireless churn in 3Q16, because of their successful customer service initiatives and improved network quality.

Combined wireless capex among Tier 1 U.S. operators decreased 10.6 percent year-to-year to $7.6 billion, attributed to carriers completing the bulk of initial LTE network construction, and Sprint’s significant pullback in spending during the quarter.

Most U.S. mobile network operators are now focusing short-term capex on improving the density of LTE networks by acquiring additional spectrum, and deploying small cells to support rising network traffic.

Outlook for New Infrastructure Investment

In the long term, network investments will be targeted to rolling out 5G as the technology becomes standardized around 2020. In the meantime, Verizon and AT&T plan to launch pre-standards 5G fixed-wireless services in 2017 that will augment their existing wireline broadband services.

Network operators are capitalizing on the demand for mobile video to boost subscriber additions. The T-Mobile One and Sprint Unlimited Freedom unlimited data plans launched in August and are alleviating
subscriber concerns over incurring overage fees from mobile video viewing.

That said, Verizon is refraining from offering unlimited LTE data to maintain high profitability, but is providing zero-rated streaming to some mobile video services, such as its go90 platform. Similarly, AT&T began offering its customers zero-rated access to DirecTV mobile streaming services in September.

Popular posts from this blog

Why Healthcare and Smart City Apps Drive 5G IoT

Fifth-generation (5G) wireless technology for cellular networks is a successor to fourth-generation (4G) wireless technology. By 2023, Juniper Research anticipates that there will be over 1 billion 5G connections globally. The technology will provide the data infrastructure for the advancement of wireless communications and for new developments in the Internet of Things (IoT) -- including smart cities and healthcare. 5G IoT Market Development According to the latest worldwide market study by Juniper Research, 5G IoT connections will reach 116 million globally by 2026 -- that's increasing from just 17 million connections in 2023. Juniper analysts predict that the healthcare sector applications and government or other smart city services will drive this outstanding 1,100 percent growth over the next three years. Juniper examined 5G adoption across key industry sectors -- such as the automotive, mobile broadband, and smart homes -- and forecasts healthcare and smart cities will accoun

How Savvy Leaders Re-Imagine Work in 2023

As we look to the year ahead, there will be significant challenges and opportunities facing the Chief Human Resource Officer (CHRO) role. In order to be successful, savvy HR leaders must be prepared to take proactive steps that adapt and evolve. "HR leaders have faced an increasingly unpredictable environment amid many organizations mandating a return to office, permanently higher turnover and burnt out employees," said Emily Rose McRae, senior director at Gartner . HR Innovation Market Development One of Gartner's key predictions for 2023 is that the use of artificial intelligence (AI) and automation will continue to increase within the enlightened digital workplace. This transition will require HR leaders to develop new skills and competencies in order to effectively manage and lead teams that are increasingly relying on these enabling technologies. Additionally, HR leaders will need to ensure that their organizations are investing in the necessary infrastructure and re

Top 10 CFO Priorities Require Rethinking Finance

The Chief Financial Officer (CFO) role is essential to digital business growth. While CFOs do not get closely involved in the tactical details of the digital transformation of their functions, they still recognize its strategic importance. According to the latest survey by Gartner, CFOs are faced with the challenge of balancing the need for substantive digital business innovation with financial cost control and risk management. "CFOs will be stretched thinly across many activities in 2023. The survey revealed a wide range of actions CFOs plan to either lead or be significantly involved with," said Marko Horvat, vice president at Gartner. Survey Findings: The Top Ten Priorities Cost Optimization - Cost reduction remains the top priority for CFOs as they look for ways to cut costs and improve efficiency in their operations. This includes identifying cost-saving opportunities through automation, outsourcing, and business process improvement. Business Continuity - The global C