How Verizon, AT&T, T-Mobile, Sprint and more stacked up in Q4 2015: The top 8 carriers

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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.

In this report you will find a ranking of the of the top eight U.S. wireless carriers in the fourth quarter of 2015 by subscriber base, according to research firm Strategy Analytics. You'll also find charts of other major metrics -- such as churn, ARPU and revenue -- of each carrier.

Below that, Jackdaw Research analyst Jan Dawson provides several slides that offer an in-depth look at how Verizon Wireless (NYSE: VZ), AT&T Mobility (NYSE: T), T-Mobile US (NYSE:TMUS) and Sprint (NYSE: S) each performed in the third quarter of 2015. Dawson's research dives into prepaid vs. postpaid performance, subscriber acquisitions vs. losses, and more.

So what are you waiting for? Dig in!

Top US Wireless Carrier Metrics Q4 2015 (ranking by subscribers, retail + wholesale)

  Carrier Subscribers (millions) Net Adds (millions) Postpaid Smartphone Net Adds (mil) Churn (Avg Monthly) ARPU
1 Verizon Wireless* 140.098 2.559 0.713 1.23%  $48.95
2 AT&T 128.640 2.234 0.340 1.50%  $38.78
3 T-Mobile USA 63.282 2.062 1.082 2.44%  $43.30
4 Sprint** 57.904 -0.226 0.368 3.36%  $44.10
5 US Cellular 4.876 0.069 0.130 1.70%  $55.31
6 C Spire*** n/a        
7 Shentel 0.455 0.007 0.010 2.64%  $47.87
8 nTelos**** 0.340 -0.004 0.006 4.20%  $46.80
Subscribers include retail and wholesale connections of both traditional and new connected device categories (e.g. M2M)
*Verizon Wireless subscribers include Strategy Analytics' estimates for wholesale and connected device volumes
**Sprint subscribers and net adds excluding affiliate subscribers, but including wholesale; service revenues excluding wholesale and affiliate
***C-Spire is a private company and does not reveal its metrics, estimated to have c. 1.0 million subscribers
****nTelos Q4 2015 figures estimated by Strategy Analytics
Source: Strategy Analytics, based on carrier reports

This list does not include resellers or MVNOs such as TracFone Wireless. (To see how TracFone did in the fourth quarter, click here.) And don't forget to see how these figures stack up against the third quarter of 2015. You also might want to check out our wrap-up of the wireless industry in the fourth quarter of 2015.

Strategy Analytics also provides a look at historic trends in the wireless industry in several key metrics:



And beyond these standard metrics, Dawson provides a deeper look. Thanks to a partnership between Dawson and FierceWireless, we're publishing these slides exclusively for a short time. These slides are part of a larger report Dawson has assembled on the fourth quarter. Dawson's quarterly slide deck, with about 40 charts, is available as part of a subscription service. In addition, he provides the underlying data behind the charts along with his analysis in custom presentations to certain clients, including carriers and device vendors. Dawson can be reached at [email protected] or (408) 744-6244.

Check out Dawson's fourth quarter slides and commentary below, and let us know what you think in the comments!

Smartphone sales fell year on year for the first time

For the first time in Q4 2015, smartphone sales by the four major carriers fell year on year, from around 42 million to around 38 million:

There were a couple of drivers behind this year on year shrinkage, and perhaps the most significant was that Q4 2014 was unusually big for smartphone sales thanks to the launch of the iPhone 6 and 6 Plus the month before the quarter began. That launch drove an unusually high upgrade cycle for the iPhone, and carriers' aggressive marketing around it also brought forward some upgrade activity that would otherwise have happened in Q1 2015. Just as Apple struggled to grow its iPhone shipments in Q4, so the carriers failed to sell as many smartphones in total a year after that unprecedented quarter. But even beyond that one-off iPhone impact, smartphone sales have been slowing as the market reaches near saturation and as the two largest carriers back off on pushing customers to upgrade. As saturation continues to increase and as installment plans for devices continue to take hold, it's likely that we'll see smartphone sales continue to slow over the coming quarters.

Wireless revenue growth goes negative

Smartphone sales weren't the only thing to suffer their first year on year decline in recent memory -- combined wireless revenues for the five largest operators also declined year on year:

The reasons for this decline are, again, complex, and vary by carrier. For some carriers, the overall lack of significant growth in their subscriber base is the key reason, and this includes Sprint and TracFone. For other carriers, notably T-Mobile, the increased prevalence of leasing plans has had an impact on reported equipment revenues, because these are reported differently from revenues from equipment installment plans. For Verizon and AT&T, the slower or negative growth was driven by the lower smartphone sales plus the ongoing transition to equipment installment plans, which is lowering service revenue significantly. Once the carriers work their way through these various transitions, revenue growth should stabilize again, but given the saturation in the phone market in particular, it's likely that future growth rates for the industry will continue to be modest.

Competitive dynamics shifting

T-Mobile reports a metric that no other carrier reports on its earnings calls, namely porting ratios to the other carriers. These numbers represent the ratio of numbers ported into the carrier versus those ported out, such that a ratio above one represents net gains in subscribers, while numbers below one represent net losses. The chart below shows these porting ratios versus the three other major carriers as reported by T-Mobile on its last few earnings calls:

What's interesting to note here is that, whereas Sprint was once by far the largest source of T-Mobile's competitive wins, it has made huge progress in cutting losses to T-Mobile, and its porting ratio has come down significantly. At the same time, AT&T has seen its porting ratio rise steadily over the past year to almost two. Meanwhile, Verizon's porting ratio has remained relatively stable. Sprint's better retention of its customers, as reflected in its overall lower churn in recent quarters, is the single biggest reason why it's seen much better net adds recently. Interestingly, however, overall share of gross postpaid adds has remained fairly consistent for these carriers over the past year:

As you can see, the overall share of gross adds for each carrier hasn't changed dramatically, though Verizon's has been falling slightly and T-Mobile's rising slightly. Verizon still dominates postpaid gross adds in the US, while Sprint continues to bring up the rear, and AT&T and T-Mobile are much closer that one would expect them to be given the size of their respective postpaid subscriber bases.

Postpaid phone net adds rebounding slightly

Although they are becoming a smaller portion of total net adds and subscribers in the industry, postpaid phone subscribers continue to be the mainstay of each of the major carriers' wireless businesses, and postpaid phone net adds the most significant subscriber growth metric. As you can see from the chart below, however, the carriers are each experiencing unique trends in this department:

T-Mobile continues to lead the industry on this metric, with postpaid phone net adds roughly twice those of Verizon, which has been one of the more consistent performers (though it tends to struggle in Q1, so watch out for next quarter's results to see if this trend holds). Sprint has dramatically improved its postpaid phone net adds in recent quarters, finally reaching positive territory in Q3 and growing that number in Q4. AT&T, meanwhile, continues to be the only one of the big four carriers with consistent negative phone net adds, as it allows lower-end feature phone customers to leave. Overall postpaid phone net adds were shrinking for a period of time, but as several of the carriers cannibalize their prepaid bases, this number has started to rebound a little. However, it's worth noting that both Verizon and T-Mobile's phone net adds were lower in Q4 2015 than a year earlier, and this was the second quarter in a row for both carriers. This suggests both that Sprint's resurgence may be having an impact, but also that the number of new phone customers available continues to shrink.   

How Verizon, AT&T, T-Mobile, Sprint and more stacked up in Q4 2015: The top 8 carriers