What an exciting and frustrating time it is to be a carrier in the US. While Sprint is struggling to hold on to existing customers and trying desperately to add new customers through their 'Cut Your Bill in Half' campaign, AT&T seems content to lose customers as a trade-off to stabilize their ARPU (Average Revenue Per User). T-Mobile continues to do their 'Uncarrier' thing while gaining new customers each quarter and the once mighty Verizon has finally lost that 'build the best network and they will come' attitude and is facing reality by offering up tempting promotions to improve their own churn rate.
Analysts are predicting that T-Mobile will likely lead the industry again in the second quarter in subscriber additions and Verizon will most likely see an improvement as they have been more active with price promotions than its peers do. Verizon has reintroducing its 10GB for $80 per month promotion or its shared data plans along with the 15 GB for $100 price point. Analysts say, "We believe the actions are tactical with an eye towards improving churn, which should dip sequentially, though it faces a tough [year-over-year comparison]."
Analysts also believe that Wall Street analysts have underestimated the number of customers that will switch over to their Edge program in order to finance their device over the long term. However, analysts argue "This would place further pressure on [average revenue per account], which is already beginning to reflect the impact of rising Edge penetration, with declines likely to accelerate throughout the year." Edge plans will typically lower service revenue, and based on Verizon's promotional activities, analyst believe that they will increase their postpaid accounts by 153,000 and lower the ARPU to $153.37, or a 4-percent decline year-over-year.
While most have been concerned about AT&T its DirecTV transaction, analyst believe "AT&T appears to have maintained its more disciplined wireless strategy. Specifically, we believe the company is willing to cede handset share in favor of stabilizing handset ARPU, an appropriate tactic in our view." Analysts are expecting AT&T to lose 167,000 smartphone customers in the second quarter – still an improvement over the first quarter, but double the 87,000 figure from Wall Street.
As far as Sprint goes, analysts expect them to be adding customers later this year with "modest progress" during the second quarter by losing 'only' 166,000 customers…a marked improvement when compared to the loss of 201,000 during the first quarter. Analyst say they need to come up with a new campaign in order to keep up their progress, as the "Cut Your Bill in Half" is more than six months old.