The last few years have shown plenty of competition among the four major wireless carriers in the US. Largely anchored by T-Mobile and their Uncarrier strategy. T-Mobile has shown that they are able get customers away from their competitors and keep them. They’ve had numerous quarters with over a million net adds, and a few with over 2 million. UBS believes that we’ll see more of the same in Q2 and Q3, with T-Mobile taking the majority of the net adds and AT&T pushing the low-end with Cricket. However, they do also think we’ll see a storm coming in Q4, which is typically the busiest time for the wireless industry due to the holiday season.
UBS said in a research note that “AT&T and Verizon have largely held the line on pricing and AT&T’s willingness to shed postpaid phone subscribers has contributed to resilient trends at Verizon. Together, handset subscriber growth for AT&T and Verizon continues to slow.” They go onto talk about how the key question here is “whether AT&T will continue to accept postpaid phone losses.” With AT&T focused on improving their sub trends with new bundled offerings. However they are still pushing Cricket pretty tough, to compete in the prepaid market with the likes of MetroPCS, Boost Mobile and Virgin Mobile. UBS is expecting that AT&T’s aggressiveness will ramp up in the second half when their OTT products launch, along with the new iPhone.
While the wireless industry appears to be pretty calm right now, that’s expected to change in the second half of the year. UBS analysts also wrote that the industry is “set up for another few quarters of similar trends, including prolonged upgrade cycles and strong profitability, we think a potential storm is brewing as Q4 approaches.” As in storm, they mean some heavy competition. Which we saw last year in Q4. For the most part, that is the carriers busiest time of the year, as there are tons of new smartphones available, and everyone is looking to buy one as a gift during the holiday season. It wouldn’t be surprising to see all types of promotions going on once we hit October 1st.