5G Industry Transition – We have worked on every single G transition. Now that we are moving into the 5G cycle, we are heavily involved with players across the ecosystem and around the globe from very advanced markets to just emerging. We have penned 7 research papers on 5G already, many of them industry firsts, and have several in the works for the coming months and years based on what we are learning from our work on the ground. Chetan Sharma Consulting will be providing more regular updates on our views on the technology, the shifts, the opportunities, and the players starting with MWC next week.
Highlights of the US Mobile Market Q4 2017
- The US wireless market had a mixed year in 2017. While the service revenue declined for the third straight year, growth in access revenues was encouraging. After dipping into the negative territory in the first quarter, mobile data growth accelerated in each of the remaining quarters in 2017.
- T-Mobile continues to outshine its peers in net-adds and revenue growth performance. It captured 60% of the postpaid net-adds, and 77% of the phone net-adds.
- The connected devices segments (non-phone) crossed the 100M milestone in 2017 becoming the second country to do so.
- Smartphone penetration stood at 93%.
- For the first time, there were more cars added than phones for the full year. AT&T dominates the connected car segment with 11 straight quarters of 1M or more connected car net-adds.
- For the first time, connected vehicles was the biggest net-adds category for the year.
- While the operators struggled to maintain growth, the overall wireless market grew 18% in 2017 thanks to the continued explosion on the 4th Wave by new digital players.
- The 4th Wave ecosystem grew by 60% in revenues.
- 2017 saw the sharpest declines in tablet net-adds with a whopping 86% drop. It had something to do with operators not pushing cellular tablets, but it might also indicate that consumers are not opting for cellular tablets and are probably going the tethering route. This might have implications to the 5G strategy for OEMs.
- Net Income declined 11% while Capex and Opex jumped 17%.
- The mobile data pricing dropped by 60% in 2017.
- Verizon continued its steady march on the IoT/Telematics front. While the growth has slowed down, it is marching towards a $1B business in 2018.
- Income/sub/mo declined again with Sprint experiencing the sharpest declines. On average, AT&T and Verizon took the bulk of the profits.
- Except for T-Mobile, all operators saw declines in LTV though churn levels are still at historic lows.
- Overall ARPU continues to decline partly because of the device mix which is now including IoT that tend to be low ARPU albeit highly profitable subscriptions. But, the main reason of the decline is competitive intensity.
- The mobile data consumption continues to rise. US is third behind Finland and Korea in terms of GB consumed per sub/month and first amongst nations with more than 60M population.
- The average data consumption in the US crossed 6 GB/mo by the end of 2017.
- Overall, US is number one in total Zettabytes consumed on mobile networks ahead of India and China (India crossed China on the backs of phenomenal network performance by Reliance Jio).
- Industry capex is expected to pick up pace in 2018 as all operators are gearing up for their 5G strategies in 2018-19.
- On the back of connected devices, AT&T led the industry in net-adds.
- The overall industry upgrade cycle is over 3 years now.
- Apple extended its market cap past $900 Billion. The race for a trillion is really on. Amazon passed Microsoft. Will 2018 be the defining year for the trillion-dollar milestone?
Other topics covered in the research update:
- The Race for the 5G icon
- 5G – Known Knowns and Known Unknowns
- Year in review, What’s in store for 2018?
- Sigfox and the daemons of WiMax
- T-Mo-Sprint affair ends, Should they try again?
- Mobile Data Growth: What’s Next?
- MAGAF’s dominance
- Estimating 5G data demand
- 5G as a platform
- 5G Economics
- The shifts in Net-adds
- Should Governments Nationalize 5G Networks?
- US Wireless Market Q4 2017 and 2017 Analysis
- Service Revenues
- 4th Wave Progress
- Connected Devices
Your feedback is always welcome.
Disclaimer: Some of the companies mentioned in this update are our clients.