The nation’s biggest wireless network operators have slowly but surely managed to reignite growth in their revenues from wireless services. And, according to a new Wall Street research report, that trend will expand next year.
At the beginning of 2018, many of the nation’s wireless network operators promised that their financial footing would improve as the months went by. For example, AT&T’s CFO John Stephens acknowledged in April that the operator’s wireless service revenues were essentially flat from the previous quarter, but he said the carrier is “confident that service revenues will improve throughout the year and still expect that we'll be positive for the full year on a comparable basis.”
AT&T wasn’t alone. Verizon, for example, notched a return to service revenue growth on a year-over-year basis in the second quarter of this year—for the first time since late 2014.
And in the third quarter, AT&T’s CFO crowed that “the tide has definitely turned in wireless,” noting that the carrier’s wireless service revenues rose 2.3% to $14 billion.
Most analysts attribute the improvements to an easing of the pricing war that dragged on operators’ financials last year. This year, in contrast, the nation’s wireless network operators have focused on raising service prices and stabilizing their financials.
And, according to the Wall Street analysts at Morgan Stanley, those efforts likely will continue through next year.
“For 2019, we expect Big 4 wireless service revenues to grow by 3.6%, versus an estimated 1.7% in 2018. This is driven by a 2.5% increase in postpaid subs and a 1.1% increase in average ARPU,” the analysts wrote in a note to investors this week. “We will be watching to see if carriers price 5G service plans at a premium to 4G rate plans as they roll out handsets in the first half of 2019. Sprint charged an additional $10 per month for their 4G WiMAX plans in the early days. Initially we would expect 5G service coverage to be fairly limited, however.”
Indeed, 2019 will be an interesting year for the wireless industry. As the cost of smartphones continues to rise, operators are looking to entice more customers to sign up for additional connected devices like smartwatches. Separately, all of the nation’s wireless network operators are rushing to launch 5G services, an offering that they will likely hope to cash in on.
Specifically, AT&T has promised to launch 5G by the end of this year, and Verizon, T-Mobile and Sprint have all promised to do so early next year.