Gross margins for pay-TV operators on video services, which now average around 25 percent, will decline to zero by 2023 if current growth rates of expenses for things like programming continue, according to a Bernstein Research report, which leverages SNL Kagan data.
Despite a flurry of promotions during the second quarter, the four Tier 1 carriers saw their lowest postpaid churn rates on average, according to analysts at Wells Fargo. That led to a sharp jump in net subscriber additions compared to the second quarter.
T-Mobile US' pre-release yesterday of its second-quarter subscriber numbers--which showed strong momentum, especially in postpaid subscribers--prompted financial analysts to raise their expectations for the carrier's revenue in the period. However, analysts also think T-Mobile's EBITDA and margins could come under pressure as a result.
Sprint likely lost postpaid handset customers in the first quarter but could report stronger financial results when it posts its quarterly earnings tomorrow, according to Wall Street analysts at Evercore ISI. In a research note, Evercore analysts Jonathan Schildkraut and Justin Ages also wrote that network quality continues to be a problem for Sprint that will need to be addressed.
Although Verizon Wireless reported improving margins, the carrier added fewer postpaid customers in the period than many financial analysts had expected. The company also lost 3G smartphone and prepaid customers in the quarter. In the past, Verizon executives have said they are willing to part with such customers and not get bogged down in a price war to retain them.
AT&T Mobility expects to add around 400,000 postpaid customers in the first quarter, which would be a weaker performance than the year-ago period and below analysts' expectations--but the carrier also expects to see its postpaid churn improve. Financial analysts predicted the company's improved churn figures would be offset by weaker wireless margins.
The fourth-quarter earnings season is coming to a close, so now it's time to see how the nation's top wireless carriers stacked up against each other in terms of key metrics. Jackdaw Research analyst Jan Dawson has assembled these slides that provide an in-depth look at how Verizon Wireless, AT&T Mobility, Sprint and T-Mobile US performed in the fourth quarter. Dawson's research covers relatively standard metrics including revenue growth and net adds, but also includes deep dives into prepaid vs. postpaid performance, subscriber acquisitions vs. losses, and more. Special Report
For months, financial analysts have been worried that T-Mobile US' surging subscriber growth would hinder its profitability. They're no longer quite so concerned.
T-Mobile US will report its full fourth-quarter earnings tomorrow and since the carrier has already detailed its subscriber growth, the focus is likely going to be on its margins and future technology deployments, according to a financial analyst.
Online video providers from Netflix to Amazon to Yahoo are scurrying to create original content that will poach viewers away from their rivals. But an analyst with The Diffusion Group says that pouring money into scripted entertainment is a strategy that is destined to fail.