The multinational market analysis firm New Street Research (NSR) whose telecommunications and Internet industry analysis team covers everything from net neutrality rules to wireless carriers' infrastructure strategies, recently published another report pertaining to the US wireless business. While many similar studies are released on a regular basis, the largest US carriers may want to take notice of this one as NSR predicts they will lose 10% of their customers to cable operators by 2020.
While T-Mobile and Sprint — the third and fourth largest carriers in the US — managed to increase their market share at the expense of AT&T and Verizon during 2016, NSR's analysts recently pointed out that it was business as usual for smaller wireless service providers in the country during the same period. In the context of an over-saturated market, this lack of "an all-out price war" which involves the entire industry suggests that significant structural changes are on the horizon, the research note states. While NSR notes that fundamental alterations in the wireless industry were expected for quite some time now, the firm's latest report predicts these changes will hit the largest telecom companies harder than it was originally anticipated after the cable industry invades their home turf next year.
Of course, this forecast refers to Comcast and Charter, major cable telecommunications companies which are slated to become mobile virtual network operators (MVNOs) in the US by 2017. More specifically, NSR predicts that Verizon and AT&T will lose 9 million customers to cable providers by 2018, and 23 million by 2020, which would amount to almost 10% of their current user base. Interestingly enough, the research firm believes smaller wireless providers like T-Mobile and Sprint will be relatively unaffected by the increased competition on the market and in a best-case scenario – they may even benefit from it.
NSR concludes that telecom giants are well-aware of these incoming changes, which is why they've been trying to diversify their revenue streams for a few years now. Provided that this report is accurate, it certainly sheds light on AT&T's recent acquisition of DIRECTV and its attempt to merge with Time Warner, as well as Verizon's willingness to purchase Yahoo's struggling Internet business.