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United States Telecommunications Report Q1 2011
Business Monitor International, Jan 2011, Pages: 91
The United States Telecommunications Report provides industry professionals and strategists, corporate analysts, telecommunication associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on United States's telecommunications industry.
BMI’s forecasts have been extended to 2015 and we have also incorporated the recently released data from Q310 to inform our forecasts and make adjustments where necessary. While on the whole, data fell into our broad expectations, and modifications to our outlook were not required, there were some developments of note. First, mobile subscriptions increased for all four of the major operators in the US, marking the first time this has occurred since Q207. We attribute the strong growth in the US mobile market in large part to the increasing importance of data-centric phones, particularly smartphones.
Verizon, the market leader, reported that 35.7% of wireless revenues came from data provision and announced smartphone penetration had reached 23%, up from 14% a year earlier. AT&T was just slightly behind with 34.8% of its revenues from data services.
Another characteristic that defined much of 2010 was the rollout of data-centric networks. Verizon launched LTE services in 38 major metropolitan areas, along with 60 airports. The company has plans to launch six LTE-enabled handsets in early 2011. AT&T has claimed that its 3G network is superior to Verizon’s and as such is not under the same pressure to upgrade. However, CEO Randall Stephenson clearly feels the heat of competition, and announced early December that AT&T would have an LTE network available to 70mn people by the end of 2011. Sprint Nextel has announced a major overhaul of its networks, awarding US$5bn in contracts to upgrade and streamline its operations. While WiMAX is the only 4G option the operator currently offers, BMI believes that Sprint may reassess that commitment in the near future. Smaller operators MetroPCS and Leap Wireless had smaller LTE rollouts in their respective markets. MetroPCS was actually the first operator to launch an LTE network, along with an LTE-enabled handset by Samsung, which has helped it grow about 3% quarter-on-quarter (q-o-q). There seems to be a newfound sense of urgency among all operators to catch the wave of demand for data.
Verizon retained the lead in the mobile market, but AT&T may pull ahead by the end of Q410. For the second consecutive quarter, AT&T was the only major operator to increase its market share, and now controls 31.2% of the market (compared with Verizon’s 31.4%). Sprint Nextel has built upon its gains in Q210, which had ended an 11-quarter streak of subscriber losses, with Q310 seeing a net gain of 644,000.
T-Mobile saw a modest increase of 137,000 subscribers, but importantly was able to stop the losses it sustained through H110.
Our forecasts for fixed lines were adjusted slightly downward, as Q310 data shows that the rate of decline has been faster than expected. Broadband uptake continues to be strong, although new accounting methods by Verizon for Q310 mean it is difficult to compare quarters for that operator. All other operators recorded gains. Bundled packages continue to be key to attracting and retaining customers, and those operators that are most successful in offering broadband services are those that offer pay-TV and voice services as well. Comcast is the market leader in both pay-TV and broadband, generating some of the highest ARPUs in the business.
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