Investors last week dumped the stocks of Verizon Communications, AT&T, Sprint and T-Mobile US in a hurry amid growing concerns that the carriers' wireless pricing battles are unsustainable long term and that rising costs of spectrum will combine with the price war to drive down carriers' profitability.
The Wall Street financial analysts who watch the nation's carriers are in a bit of a tizzy this week because Verizon and AT&T, the two dominant players in the market, are warning of pressure on earnings and margins from promotions and higher subscriber growth in the fourth quarter. The analysts are worried because they think the competition from T-Mobile US and Sprint could get more intense. I think that'd be fine if that happens. If Verizon and AT&T lost profits and customers to Sprint and T-Mobile, I'd say that would be a grand development for the U.S. market and would be broadly beneficial for consumers.
While Verizon Wireless did not provide specific subscriber growth figures for the fourth quarter, the carrier indicated it will report strong momentum in the quarter. Verizon's confidence in its fourth-quarter performance, with more than three weeks left in the year and with the holiday shopping season in full swing, speaks to the challenges Sprint and T-Mobile US face in eating into Verizon's subscriber base.
T-Mobile US is almost done transitioning customers on its legacy plans to its more recent no-contract Simple Choice plans, and argues that customers who are being moved to the new plans are getting more benefits for basically the same price.
Sprint CEO Marcelo Claure has been on the job for less than three months and has already taken several steps to revamp the carrier's business. However, financial analysts say that, in light of the company's gloomy third-quarter results, Claure will need to be much more aggressive in shaking up Sprint's business model if he wants to return the carrier to subscriber growth and financial profitability.
The third-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 the largest carriers fared in the quarter.
Jackdaw Research analyst Jan Dawson has assembled these slides that provide an in-depth look at how Verizon, AT&T, Sprint and T-Mobile performed in the third quarter. Dawson also covers América Móvil's U.S. MVNO, TracFone Wireless, which is by far the nation's largest MVNO. 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 net additions by device type.
Sprint is expected to report weak subscriber results for the third quarter, according to estimates from financial analysts, but an even bigger spotlight will be on new CEO Marcelo Claure's vision for reviving the company's results and boosting its network performance.
HALF MOON BAY, Calif.--T-Mobile US continued to roar ahead in terms of subscriber growth in the third quarter. T-Mobile also hit its year-end LTE coverage milestone of 250 million POPs a couple of months ahead of schedule. However, T-Mobile's earnings took a hit in the quarter, in part because of the surge in subscribers and higher expenses.
HALF MOON BAY, Calif.--T-Mobile US CEO John Legere said he is impressed by what Sprint CEO Marcelo Claure is doing to be aggressive and win back market share, but he warned that if customers flood onto Sprint's network and have a poor experience they will churn and never come back.