U.S. operators will improve service revenue in 2H18 via continued subscriber growth and adoption of premium unlimited data plans

HAMPTON, N.H. (Sept. 11, 2018) — Wireless revenue rose 2.4% year-to-year to $59.1 billion among U.S. carriers covered in Technology Business Research Inc.’s (TBR) 2Q18 U.S. & Canada Mobile Operator Benchmark. The increase came as a result of higher equipment revenue spurred by the adoption of premium devices as well as improving service revenue trends. Verizon and AT&T (when excluding the impact of the ASC 606 revenue recognition standard) were able to return to year-to-year service revenue growth in 2Q18 as the bulk of customers have transitioned to nonsubsidized service plans. Service revenue is also benefiting from customers migrating from lower-priced tiered data plans to more expensive unlimited data plans and will be further aided by the recent launch of new premium unlimited data tiers, such as Verizon’s Above Unlimited and Sprint’s Unlimited Plus plans.


Service revenue will also benefit from U.S. operators sustaining smartphone and connected device subscriber growth in 2H18. “Despite growing smartphone saturation, all Tier 1 U.S. operators were able to gain postpaid phone net additions in 2Q18 as opportunity remains to target first-time wireless customers, including young adults and immigrants entering the country,” said TBR Telecom Analyst Steve Vachon. “Postpaid phone subscriber growth is also coming at the expense of prepaid growth, which is slowing as more customers qualify for postpaid plans as the economy improves. Operators are also expanding their connected device portfolios in areas including wearables and connected car to bolster postpaid subscriber growth. The Apple Watch 3 has particularly bolstered postpaid connections as the device is the first Apple Watch model capable of receiving LTE connectivity.”

Combined wireless revenue among Tier 1 Canadian carriers rose 5.1% year-to-year to $6.2 billion due to continued postpaid additions spurred by shared data programs and expanding LTE-Advanced coverage. The postpaid market in Canada continues to flourish, with Bell Mobility and Rogers increasing postpaid net additions year-to-year in 2Q18, in part due to the country having a significantly lower wireless penetration rate, which is currently estimated at about 87%, compared to the U.S. Canadian operators are also bolstering postpaid subscriber growth by providing low-cost connectivity options to support connected devices, including tablets and wearables, as part of their shared-data family plans. Competitive pressures are challenging average revenue per user (ARPU), however, as Bell Mobility and Telus experienced year-to-year blended ARPU declines in 2Q18 as the companies priced more aggressively to maintain market share. ARPU declines were also driven by Tier 1 Canadian operators offering targeted promotions to combat aggressive pricing offers from regional companies such as Videotron and Shaw’s Freedom Mobile brand.

The U.S. & Canada Mobile Operator Benchmark details and compares the activities of the largest U.S. and Canadian operators, including financial performance, go-to-market initiatives and resource management strategies. Covered companies include AT&T, Verizon, Sprint, T-Mobile, U.S. Cellular, Rogers, Telus and Bell Mobility.


0 replies

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply

Your email address will not be published. Required fields are marked *

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.