US Mobile Market Update – Q2 2018
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. Chetan Sharma Consulting is involved in several 5G strategic projects across three continents, across the value chain, so, have a front row seat into what’s coming. 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. We will also be discussing 5G in-depth at our annual Mobile Future Forward Summit in Oct with some of the best 5G minds in the business.
Highlights of the US Mobile Market Q2 2018
- Q2 2018 brought some positive news to the industry. It saw its biggest jump in QoQ service revenue in over 20 quarters. All four operators showed improvement with T-Mobile outshining others in YoY growth at 7%.
- Thanks to record low churn numbers, all operators saw increase in LTV for the first time in 2 years.
- The AT&T-Time Warner merger closed though DOJ plans to appeal. T-Mo-Sprint merger is making its way through the regulatory process.
- The 5G discussions are getting louder and more substantive with each passing day. However, it is the first “G” transition when net-revenues is under pressure so presents a unique set of issues to the industry.
- Overall ARPU increased slightly as a result of softening of the price wars and consumer’s willingness to pay more in a healthy economy. However, because of the influx of non-phone devices into the mix, overall ARPU was down 4% YoY.
- T-Mobile had its first sub 1% postpaid churn quarter in its history.
- AT&T had the most number of connected devices net-adds in a quarter in industry’s history (breaking its own previous records over the past several years).
- Smartphone penetration stood at 94%.
- The quarter continued to see the decline in tablets indicating waning interest from consumers in the segment. This might have implications to the 5G strategy for OEMs.
- Connected cars and IoT continue to dominate the net-adds. Their share of the net-adds was over 77%.
- Again, connected vehicles was the biggest net-adds category for the quarter which was dominated by AT&T.
- While the operators struggled to maintain growth, the overall wireless market is growing rapidly thanks to the continued explosion on the 4th Wave by new digital players.
- Verizon’s IoT/Telematics business continues to gain steam and has become an important component of its digital story.
- Net Income rose 10%. Income/sub/mo gained as operators have tightened their belts and have improved their profitability despite pressure on revenues. All operators improved their profitability.
- Industry capex is expected to pick up pace in 2018 as all operators are gearing up for their 5G strategies in 2018-19. Capex increased in Q2 while opex was down 11%. For the first time in 11 quarters, Sprint’s capex spend went past $1B.
- On the back of connected devices, AT&T led the industry in net-adds.
- The overall industry upgrade cycle is over 3 years now.
- In the race to a trillion, Apple is tantalizing close to becoming the first company to cross the milestone. Amazon, Microsoft, and Google also reported excellent earnings.
- The average data consumption in the US is expected to cross 8 GB/mo by the end of 2018.
Other topics covered in the research update:
- Evaluating Competition in the Digital Economy
- The Race for the 5G icon
- 5G – Known Knowns and Known Unknowns
- US Mobile Operator 5G Narratives
- Mobile Data Growth: What’s Next?
- MAGAF’s dominance
- Estimating 5G data demand
- Realizing the 5G Promise
- 5G as a platform
- 5G Economics
- The shifts in Net-adds
- Ethics in Technology
- What to expect in the coming months?
- US Wireless Market Q2 2018 Analysis
- Service Revenues
- 4th Wave Progress
- Connected Devices
Your feedback is always welcome.
We will be discussing the entire mobile industry value chain, the opportunities that are emerging at our annual brainstorm – Mobile Future Forward. The theme of the summit is Connected Intelligence: Exponential Ecosystems. We truly have some of the industry pioneers who will share their perspectives and blow you away with their vision and perspectives. Hope to see you there.
Disclaimer: Some of the companies mentioned in this update are our clients.