Entner: American consumers driving their carriers to lower prices and offer more flexible plans
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.
Check out the detail in this chart:
T-Mobile USA with not much left to lose realized that its only chance for survival was to change the status quo and try things it never dared, but should have. Within a week of T-Mobile rolling out a rapid device upgrade plan with Jump, AT&T and Verizon offered similar plans. A month later Sprint followed. The chart also reflects a few trends taking hold among consumers. The popularity and proliferation of shared data plans, that include unlimited voice and text, has been impressive. Consumers like the simplicity of being able to pool data without worrying whether one family member will bust the budget. They also like the ability to add additional devices for a very low price. The significant growth in connected tablets that has fuels a lot of AT&T's and Sprint's growth recently would not be possible without these low-fee add-ons that mostly come with mobile share plans. The new device upgrade plans are expanding the choices consumers have to pick the right plan for them. While primarily designed for customers who want to change their devices, consumers who generally wait for their device to break in order to upgrade benefit as well due to the lower monthly cost.
Prices have also come down. Just this month, AT&T lowered prices on their mobile share plans. This led Verizon Wireless not even two weeks later to not only lower their prices to match AT&T, but to include free international texting and 25 GB cloud storage space in the offer. In addition, Verizon Wireless announced that it significantly upgraded network speeds nationwide. Clearly, even Verizon Wireless was not immune to the competitive pressure, both in terms of network quality and pricing and had to react. Choices matter to consumers and the growth of T-Mobile subscriber share, which is on par with the rate of growth at AT&T and Verizon in the last few quarters impressively shows that if you want to compete in the US, consumers respond positively.
Bottom line, there is undisputable evidence that the carriers are duking it out for every consumer dollar. The question is: as wireless becomes even more ingrained into our lives with connected cars and homes, how will competition change the industry in the future? Stay tuned.
Roger Entner is the Founder and Analyst at Recon Analytics. He received an Honorary Doctor of Science from Heriot-Watt University. Recon Analytics specializes in fact-based research and the analysis of disparate data sources to provide unprecedented insights into the world of telecommunications. Follow Roger on Twitter @rogerentner.