Chetan Sharma: Q2 'the lowest net-adds quarter in the U.S. mobile history'

U.S. wireless carriers added the lowest number of net new subscribers on record--139,000--in the second quarter, owing in large part to Sprint's (NYSE:S) shutdown of its Nextel iDEN network, according to a new report from Chetan Sharma Consulting.

"For the quarter, the market added a paltry 139K new connections, a decline of 95% from Q2 2012," Sharma wrote in the report. "It was the lowest net-adds quarter in the US mobile history (barring the early days of tepid growth). The biggest reason was the sun setting of the Nextel brand which was finally laid to rest after the grand experiment of 2004 went wrong."

Indeed, Sprint lost 2.034 million total customers in the quarter, Cricket provider Leap Wireless (NASDAQ:LEAP) lost 364,000 and U.S. Cellular (NYSE:USM) lost 127,000, which offset net gains from Verizon Wireless (NYSE:VZ), AT&T Mobility (NYSE:T) and T-Mobile US (NYSE:TMUS).

According to Sharma's report, U.S. wireless carrier net adds reached their lowest point in the second quarter. Click here for Sharma's full PDF report.

Sharma noted that the star performer for the quarter was T-Mobile, which, for the first time in six years, led in total net additions, just edging out Verizon. T-Mobile's postpaid net additions of 688,000 were second only to Verizon's 941,000. However, as Sharma noted, T-Mobile's growth, which was goosed in part by the addition of Apple's (NASDAQ:AAPL) iPhone to its lineup, "came at a cost with shrinking margins and lower overall ARPU."

In terms of non-traditional subscriber growth, Sharma noted that AT&T "continued to lead the connected device segment with 48% market share." Sharma also pointed to AT&T's late April launch of its Digital Life home security and automation service as a sign of the shift toward digital services.

"The fourth curve opportunities are massive but require a different skill set and strategic approach than the past three curves," Sharma wrote, referring to voice, messaging and data. "As predicted, we are starting to see the impact of the 4th wave on a global scale and some operators have started to break out the 4th wave revenues in their financials. Operators with better balance sheets will also look for global expansion especially in Europe where economic impact on the telecom operators has been severe, however the M&A efforts will be complicated by respective governments desire to keep control of the national infrastructure provider."

For Sharma's take on the U.S. mobile data market, see this separate story.

For more:
- see this report
- see this presentation (PDF)
- see this FierceMobileContent article

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