Now that we have all of the Q2 earnings reports from U.S. wireless carriers, it's time to dive into the numbers. Jan Dawson from Jackdaw Research has done an excellent job offering some insight and into the second quarter for these carriers, comparing numbers, subscribers, revenue and growth from the big 4 plus Tracfone. All of this was published by Fierce Wireless as an early look. A full report will be up on the Jackdaw Research soon. In the meantime, let's take a look at some of these charts and break down the data.
Tracfone saw the biggest growth in revenue this quarter, with T-Mobile coming in second and Verizon third. Sprint is bringing up the rear. T-Mobile saw a big increase in the first quarter of this year and dropped off a little this quarter, but still had solid revenue growth. Verizon has turned in a steady 5-8% growth every quarter for the past year. Data is still the big growth driver in terms of revenue. Dawson says AT&T saw a decrease because they are moving customers to their Next upgrade plan. "Next has dented revenues this past quarter and will likely do so for several more quarters to come, because it's giving subscribers who were previously on subsidy plans a break on their service revenues even before they've started paying for their own phones," he writes.
Verizon still has the most postpaid subscribers of any U.S. wireless carrier, which comes as no surprise. It's interesting to note that Verizon does not report wholesale subscribers, meaning those on an MVNO partner, or "connected devices" like tablets. This means that we don't have a complete picture of Verizon's customers. Tracfone is obviously the largest prepaid carrier. Sprint has only slightly more subscribers when it comes to postpaid and prepaid customers, but they have a lot more wholesale subscribers because they partner with big MVNOs like Virgin and Boost. T-Mobile and Sprint combined barely make up Verizon or AT&T's customer base. This is problem for competition. Dawson says, "both AT&T and Verizon have around double the subscribers of Sprint and T-Mobile today, especially if Verizon's wholesale and connected devices subs are factored in. That's an insurmountable obstacle to both effective competition and higher margins for both of the smaller carriers."
Net adds are a combination of newly added subscribers, minus the customers who cancelled this quarter. Each carrier has a different mix of additions. Tracfone only added prepaid customers, of course. Verizon added postpaid customers almost exclusively and lost a few prepaid subscribers. Sprint added a ton of wholesale customers and connected devices but lost prepaid and postpaid subscribers. AT&T lost prepaid and wholesale customers while adding valuable postpaid and connected subscriber lines. T-Mobile added new customers in every category.
Dawson goes into more detail on each carrier's margins, net adds by device, and does a deep dive on the adds vs. losses for each company. You can find all the charts on Fierce Wireless using the source link below. Jackdaw Research will be publishing their full report next week.