First quarter operational results for domestic wireless carriers proved eventful, as T-Mobile US blew away its larger rivals in attracting new customers, though paid for it dearly on its bottom line. At the other end of the scale, Sprint remained a work in progress as customers continued to defect, though the carrier did make progress financially.
RCR Wireless News spoke with Bill Ho, principal analyst at 556 Ventures, about Q1 results, with Ho noting T-Mobile US’ success definitely has had an impact on the competitive environment. Verizon Wireless and AT&T Mobility took note of T-Mobile US’ advances, rolling out changes to their rate plans during the latter half of the first quarter, but remained cautious to not disrupt their bottom line.
Ho noted that fine balance could be pressured through the rest of the year as carriers move away from traditional device subsidy models and towards equipment installment plans. That change forces carriers to move the cost of acquiring customers from an upfront and fixed cost tied to a subsidy, to an ongoing, monthly revenue generating piece spread out over the life of the EIP plan.
The conversation also turned to potential troubles for Verizon Wireless, which during the first quarter admitted to have problems converting its substantial 2G and 3G customer base to its LTE services resulting in higher-than-normal churn rates for the carrier.
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Breaking down Q1 carrier results, trends
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