Leadership in Wireless with a Changing Landscape is Challenging

David Byrd : Byrd's Eye View
David Byrd
Chief Marketing Officer for ANPI

Leadership in Wireless with a Changing Landscape is Challenging

Without a doubt, wireless communications continues to grow unabated. The fact that there are more cell phone/wireless subscriptions than people in the US (326.4 million versus 318 million) proves just how pervasive mobile communications is today. And as more and more Americans dump their landline phones (39.4%), the race to expand subscriber bases is more important than ever. Therefore, it is both surprising and interesting news that in the first quarter of 2014, T-Mobile US added 1.256 million new phone subscribers, with the two largest providers trailing badly. AT&T added 176,000 subscribers, a rather poor showing, but Verizon actually lost 156,000.

Much of T-Mobile’s gain comes from a change in its approach to the market. T-Mobile ended handset subsidies and international roaming charges, and no longer requires multi-year service plans. Obviously, consumers have responded very positively to these changes. For myself, I use AT&T and was the beneficiary of the 20% reduction in my monthly bill in February. I received that positively, as well. While Verizon may have stumbled, Sprint appears to have fallen flat with a loss of 750,000 subscribers, making a merger between it and T-Mobile ever more strategically important. Many wireless analysts agree that the merger would create a real alternative to AT&T and Verizon, the clear top two providers, but betting on the deal surviving regulatory oversight may prove risky.

All of the wireless service providers are busily upgrading their networks to provide true LTE data speeds of 100 Mbps or more. AT&T has Project VIP. Sprint has Spark tri-band LTE, which is expected to reach 150 Mbps. Although T-Mobile has made news with its acquisition of MetroPCS, it, too, plans to upgrade much of its 2G EDGE network to LTE sometime in 2015. Verizon, with the nation’s largest LTE network geographically, can focus more of its attention on subscriber acquisition and retention, which it clearly needs to do. However, they will need to prove they can walk and chew gum at the same time, as the date nears for the FCC’s spectrum auction rules release.

The 2015 FCC spectrum auction is a transfer of low band spectrum from TV broadcasters to wireless service providers. In part, the last such auction was motivation for AT&T to make a bid for T-Mobile, which acquired more spectrum than AT&T and Verizon combined. Neither of the big two wants to see that happen again.

Wireless services in the US will only improve with better coverage, faster speeds and more competitive pricing. Watching these titans battle for market share is very entertaining, but also very important. Wireless, cable and IP communications are the cornerstones of the nation’s future as the availability of existing services is expanded and the delivery of new services that can exploit the improved bandwidth is realized. In addition to how consumers are addressed by these evolving networks, the success of businesses to realize expanded market opportunities and new revenues profitably depend upon them, as well.

 



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