Articles by Roger Entner
President Obama's foray into broadband policy could represent a major turning point in telecommunications and internet policy both for the United States and the world as a whole, if the FCC adheres to what the President requested. In a world where prices decline, services improve, and choices increase, this country's most senior leader has decided that a heavy-handed regulatory framework developed 80 years ago is the right vehicle to grow jobs, attract investment and catalyze innovation in the digital economy.
The U.S. mobile broadband experience is the stuff of lore around the world, in part due to the smartphone revolution that started here, enabled by large, reliable wireless networks and innovative pricing strategies. The U.S. was also the first to roll out fully commercial large-scale LTE networks that offered significantly higher speeds than ever before, and still leads the world in LTE subscribers and deployment.
We should have seen it coming: Just as we have watched the majority German-owned T-Mobile USA and the majority Japanese-owned Sprint contemplate walking down the aisle in slow motion, a new, dashing suitor has appeared on the stage and who else could it be? It's a French company that thinks it's a better match than the Japanese.
Though off a bit from the fourth quarter of 2013, the industry continued to expand strongly with total wireless subscriptions up 3.529 million as T-Mobile blew the doors off with record gains. AT&T also was strong, while Verizon had a rare off-quarter and Sprint had another setback on the road to recovery.
Q4 2013 saw robust growth across the industry with subscriptions climbing by 4.688 million thanks to gains from all the providers other than Leap and U.S. Cellular. Sprint offered the biggest surprise with 58,000 contract additions. By taking the AT&T playbook to the next level offering an aggressive tablet promotion, the company turned another contract loss into a surprising win.
When I first became a wireless analyst, Japan was portrayed as an almost mythical wireless wonderland where everything was perfect and so much better than the unenlightened and backward countries not enjoying the mobile data and mobile handset miracles from the land of the rising sun. NTT DoCoMo was the most visible prophet of the Japanese way of wireless and it put its money mouth was. Now, Japan is again being portrayed to us as a land where wireless magic is reality. But is this really the case?
The recent burst in wireless plan revisions reminds us that change and expanded consumer choices have become defining characteristics of the U.S. mobile market place. As illustrated in the chart below, carriers are engaging in an intense back and forth of response and counter-response on everything from their shared data plan offerings to device upgrades to handset financing.
Right before CES--where we cared more about who crashed whose party and got kicked out rather than substance--Verizon and T-Mobile came to a significant spectrum deal. Under a series of agreements, Verizon will sell T-Mobile 23 700 MHz A Block licenses covering more than half of the U.S. population, including some of the largest markets in the United States: Los Angeles, San Francisco, Dallas, Atlanta and Detroit. As part of the agreement, T-Mobile and Verizon are re-aligning spectrum blocks in Northern California and Atlanta.
Sprint desperately needs a repositioning, in the same way that T-Mobile has shown is possible. As the last quarters have proven, just providing "unlimited for life" is not enough for consumers to switch to Sprint in significant numbers because the other operators offer packages with more data per month than most consumers use. Unless Sprint can provide more value than Verizon or AT&T, the customer losses will continue.
Dish, Sprint and T-Mobile hold very large amounts of high-band spectrum and have been using it to support lots of network and service innovations as a way to compete against AT&T and Verizon. So, why is there such a resurgence of commotion about the virtues of "low-band spectrum?"