Unlimited Data Has Proven Costly for Carriers, Says Analysts

Unlimited data is back at all four carriers in the US, but according to Cowen and Company Equity Research, the move to bring back unlimited data has proven to be quite costly for all four carriers. And the future isn't going to be much prettier. According to Colby Synesael of Cowen and Company Equity Research, "the first quarter of unlimited for all four carriers left much to be desired. Both AT&T and Verizon incurred postpaid losses for the first time on record, a trend that could continue." Synesael continued by stating that Verizon had its worst quarter in "recent memory". But the bad news isn't all on AT&T and Verizon. T-Mobile also included 'less great' postpaid net adds guidance. Now because of this, AT&T and Verizon are looking at new avenues of growth like video and IoT.

Of course, Cowen and Company Equity Research aren't the only ones that believe this. Jeffries Analysts are saying the same thing. Profit margins are shrinking and wireless carriers are losing customers. This isn't all due to the fact that unlimited data has made a comeback, after all the smartphone market has plateaued in the US for quite some time already, which is part of the carriers revenue, selling smartphones. But now that unlimited is here, there are less overages and data buckets for the carriers to bring revenue in with, which is resulting in the carriers bringing in less profit for themselves.

With all four carriers in a hotly contest competition right now, it will be quite a while before ARPU stabilizes again. ARPU is the average revenue per user, and it's what many carriers judge their growth on. AT&T has the highest ARPU right now, with T-Mobile and Sprint's numbers shrinking. Although, T-Mobile is still able to turn a profit and actually grow, likely because it is able to get more people to add more lines, making its ARPU shrink but still bring in more profit. Sprint has done good to turn their numbers around, but it is still pretty deep in debt, so its numbers don't look as good. Unlimited data is not something carriers wanted to bring back, and it's quite clear why that is, now.

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Alexander Maxham

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Alex has written for Androidheadlines since 2012 as Editor of the site and traveled the World to many of the biggest Smartphone and Technology events. Alex has a background in Technology and IT and Deep Passion for Everything Android and Google. His specialties lay in Smartphones of all budgets, Accessories, Home Automation and more. Contact him at [email protected]
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