Analysts Say Wireless Revenues Will Continue Their Downturn

Wireless carriers' service revenues among the major players in the United States have been stagnating and even dropping lately, and according to a report from New Street Research, that trend is likely not going to end any time soon. While it's easy to blame this downturn on saturation of the US smartphone market, New Street's report actually points to a different source; an ongoing price war. The report goes on to highlight T-Mobile as potentially having something to gain from this scenario, with the carrier expected to snag some 43% of gross subscriber adds for the year, if all goes as predicted. That scenario would put 27% of the industry's total customer pool in T-Mobile's court.

These market conditions are reportedly likely to be agitated by the incoming releases of a few high-end smartphones. The Samsung Galaxy Note 8, Google Pixel 2 and Pixel 2 XL, and Apple iPhone 8 and iPhone X are all expected to drive competition among carriers. This, in turn, would increase churn as customers jump ship from their current carrier to get the best deals on the new devices. Naturally, this would go hand in hand with the price war trend continuing, which means that overall revenues will continue to decrease. This comes on the heels of a slight industrywide decrease in churn recently; this could mean that the industry dynamic is about to be turned on its head, or it could mean that wireless customer bases will show resistance to predicted churn trends, opting to either ignore the hot new devices for the time being, or find a way to get them from their own carriers.

Declining revenue has traditionally been blamed on customers adopting installment plans on devices, which can be expensive upfront for carriers, but New Street Research's data shows that about 80% of customers are already on such plans. It is worth noting that all of the major carriers are hard at work on their 5G deployments, and many are bolstering their LTE networks with higher capacity and new technology. Some carriers are even working on getting 4.9G solutions out the door before the big 5G push, in order to both give customers a taste of 5G before it lands, and provide fallback for 5G networks, which are likely to be commercially deployed in their relative infancy, once the full specification of the 5G standard is announced. Naturally, all of this is costing and will cost tons of capital, further pushing net revenues down. Gross revenues, of course, are not affected, and could very well follow the trends predicted by New Street Research.

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Daniel Fuller

Senior Staff Writer
Daniel has been writing for Android Headlines since 2015, and is one of the site's Senior Staff Writers. He's been living the Android life since 2010, and has been interested in technology of all sorts since childhood. His personal, educational and professional backgrounds in computer science, gaming, literature, and music leave him uniquely equipped to handle a wide range of news topics for the site. These include the likes of machine learning, voice assistants, AI technology development, and hot gaming news in the Android world. Contact him at [email protected]
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