On the one hand, we read articles about the population growth in the U.S. flat-lining. But on the other hand, all three of the big wireless carriers in the U.S. reported increases in postpaid phone net adds in Q4 2022.
T-Mobile revealed last month that it added 927,000 postpaid phone net adds in the fourth quarter 2022. And for the full year, it reported a record high 6.4 million postpaid net customer additions. AT&T reported 656,000 postpaid phone net adds in Q4, while Verizon posted 217,000 postpaid net phone adds for the same time period.
Not only did the carriers all report postpaid phone net adds, but the cable MVNOs Comcast and Charter added over 900,000 mobile subscribers in Q4 2022, their largest quarter yet.
Where in the world are all these adds coming from?
First, all the telecom analysts chimed in, saying that the numbers were inflated because of 3G network shutdowns last year. People were moving off those networks and onto to newer networks, and the industry was double-counting them.
LightShed Partners analyst Walter Piecyk tweeted that if 3G network shutoffs were included, T-Mobile’s Q4 phone net adds (both post and prepaid) tallied 880,000 compared with AT&T’s 584,000 net adds and Verizon’s losses of 544,000.
The analysts at New Street Research led by Jonathan Chaplin had similar numbers. “We focus on retail adds, given the shift from prepaid to postpaid,” wrote New Street. “Cable saw a surge in adds to 1 million in 4Q22. T-Mobile improved more modestly to almost 900,000. AT&T’s adds have slowed over the past two quarters. If we unwind the normalization Verizon made for the network shutdown, they would have lost almost 600,000 adds in 4Q22.”
Even still, where did T-Mobile’s 900,000 or so adds come from?
In response to questions from Fierce Wireless, T-Mobile said its 927,000 figure includes new business postpaid phones. But its figure only pertains to phone adds, it does not include the 524,000 new T-Mobile Home Internet additions in the quarter. The figure also does not include other devices such as watches.
In 2022 T-Mobile was offering various promotions such as BOGO, where people could bring their own device and get one for free. And the carrier also offered some get-a-free-line-on-us promotions.
Some people on Reddit claimed they were getting multiple free lines from T-Mobile, and Fierce wondered if these lines were inflating T-Mobile’s figures.
In response, T-Mobile said the BOGO offers and get-a-line-on-us is only counted in the 927,000 figure if a phone is activated on the new line. Otherwise, it’s counted as an upgrade.
Based on T-Mobile’s responses, it doesn’t appear that its promotions are falsely inflating the carrier’s new phone numbers.
So, again, what accounts for the new lines?
Even though the U.S. population isn’t growing, there are more older people and ever-younger people getting smartphones.
Recon Analytics principal Roger Entner has some data that shows that more young children were given smartphones by their parents in the aftermath of the mass school shooting in Uvalde, Texas.
Bill Ho, principal analyst with 556 Ventures, agreed that a wider range of age groups is purchasing handsets. “That’s kind of the circle of life anyway,” he said. “It’s been like that since when cell phones were available.”
In terms of the BOGO and other promotions, Ho said, “The whole overarching idea is to reduce churn.” People who have a bunch of T-Mobile lines will be less inclined to switch providers.
A report from Counterpoint Research in November 2022 said the rise in work-from-home during the pandemic helped encourage the adoption of mobile business lines for employees.
“Verizon’s business postpaid phone net additions have outpaced consumer postpaid phone net additions in recent quarters as they target this vertical, while T-Mobile is aggressively seeking to gain business subscribers from its weak starting position,” wrote Counterpoint. "This helps to explain the overall growth in mobile lines, as many customers now have two lines, one for business and one for personal use.”
It will be interesting to see what happens to subscriber growth in 2023 as the effects of 3G shutdowns end, population growth remains stable and the effects of work-from-home have already taken effect.
In terms of growth in phone lines this year, Ho may have summed it up best. "Unless you’re behind the curtain, you don’t really know."