More financial analysts think that U.S. wireless carriers will report weak postpaid subscribe numbers for the first quarter after a wave of customers signed up for Apple's (NASDAQ:AAPL) iPhone 4S in the fourth quarter.
JP Morgan Chase analyst Phil Cusick estimated that U.S. wireless carriers collectively shed 20,000 postpaid customers in the first quarter. "The huge fourth quarter fueled by the iPhone took all the air out of the first quarter," Cusick told Bloomberg. "It's a saturated market."
Cusick's estimates come after a report last week from investment banking firm Jefferies & Company, which found that U.S. wireless carriers could see the worst net customer additions in years during the first quarter. The firm said that the U.S. wireless industry as a whole could experience its first ever net loss of postpaid subscribers during the period.
"A Jefferies proprietary handset survey suggests volume expectations for 1Q are the weakest in years, in line with our view that net adds are significantly lower in the quarter after an iPhone launch," wrote Jefferies analysts Thomas Seitz and Kunal Madhukar in their research note.
Cusick estimated, like Jefferies, that Verizon Wireless (NYSE:VZ) and AT&T Mobility (NYSE:T) took customers from Sprint Nextel (NYSE:S) and T-Mobile USA. According to Cusick's estimates, T-Mobile USA probably lost 600,000 postpaid customers and Sprint lost 125,000 in the first quarter. Verizon likely added 500,000 contract customers and AT&T gained 225,000 postpaid subscribers, Cusick estimated.
Postpaid growth may return after the first quarter, which is traditionally weak, analysts said. However, the drop could force the carriers to run more promotional activities to attract postpaid customers. Still, some analysts are not convinced the postpaid market will be that bad in the first quarter. Barclays Capital analyst James Ratcliffe estimated that Tier 1 carriers added 380,000 postpaid customers collectively in the first quarter, according to Bloomberg.
Verizon will be the first carrier to report its earnings April 19. During the fourth quarter, Verizon reported the addition of 1 million total new connections, while AT&T, which reports April 24, added 717,000 wireless postpaid subscribers, its largest increase in five quarters. Sprint, which reports earnings April 25, added around 161,000 net postpaid subscribers during the fourth quarter. T-Mobile lost a net 802,000 postpaid subscribers in the fourth quarter, and will reports its earnings May 10.
- see this Bloomberg article
Jefferies: Q1 could be 'weakest in years' for U.S. wireless carriers
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AT&T blasts Q4 record with 9.4M smartphone sales, 7.6M iPhone activations
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