Worst of the Week: The Q2 blues

Hello! And welcome to our Friday column, Worst of the Week. There’s a lot of nutty stuff that goes on in this industry, so this column is a chance for us at RCRWireless.com to rant and rave about whatever rubs us the wrong way. We hope you enjoy it!
And without further ado:
This week the domestic wireless market’s two heavyweights announced second quarter customer results, which for their respective shareholders appeared to be dy-no-mite!

Strong, postpaid growth with both operators adding more than one million new, high-value contract subscribers, and results that showed year-over-year improvements? That’s pretty good in this day-and-age of near market saturation … at least in terms of counting just “people” as customers.
I know that customer growth is not the end-all, be-all when it comes to operator performance, but it does tend to indicate the potential for future performance. Keep adding new customers and it’s likely that you will continue to have revenues. Start losing customers and the focus then shifts to squeezing more revenue out of each customer in order to keep that revenue train moving.
So, looking at Q2 results so far, Verizon Wireless and AT&T Mobility appear to be doing a pretty good job in attracting customers to their service. More impressively, this growth came during a quarter in which there is really no reason for people to be out purchasing new wireless service.
I think we can all admit to just how boring the second quarter is? I mean, nothing really happens between April 1 and June 30 that seems to in any way, shape or form provide any sort of fun “hook” for wireless carriers or customers. Ever since Apple decided that it made more sense to announce new iPhones during the third quarter, poor Q2 has been bereft of any pizzazz. The industry needs to come up with some sort of Q2 happening that gets people excited. Or at least gets them to break out their camping gear so they can spend time in front of a retail store. Weirdos need something to do in Q2! (Trademark pending)
You can even sense the malaise during Q2 conference calls, when typically excited C-level execs seem to have their minds elsewhere … like the second tee. Just about every exec in one form or another is tasked during these presentations to cite Q2 as being just plain boring.
So, back to Q2.
Now combined, the two biggies managed to sign up nearly 2.5 million postpaid net additions for the second quarter. Taking a look back to the first quarter, we see that the four nationwide operators combined added just 2.2 million net postpaid customers, led by T-Mobile US’ 1.3 million net additions. With T-Mobile US and Sprint still to report, how much growth can be left in the postpaid market?
I know few people expect much from Sprint at this point, but it would still be good to see the nation’s No. 3 carrier post some growth worthy of a No. 3 competitor. And, for the past year, T-Mobile US has been under-dogging its rivals like no-one’s business, something that I would hate to see come to an end. (Though I wouldn’t mind the whole “un-carrier” thing being shown the door. Until T-Mobile US stops operating a mobile network or sending customers a bill each month for mobile services, they are a “carrier” whether they like it or not.)
I do have to admit that I am a bit worried for T-Mobile US, which over the past several quarters has been vocal in pre-announcing strong customer results. So far, it’s been radio silence.
I’m not saying these free-enterpise-focused, beholden-to-stockholder, worried-more-about-quarter-to-quarter-results-than-looking-ahead-a year-or-two entities should all gather around the communal fire, roast S ‘mores, sing “Kumbaya” and equally parse out customers. (Though wouldn’t that be pretty funny to watch?) But, what fun is it when just one or two guys are hogging all the new customers?
The only sliver of light I can see coming from Sprint and T-Mobile US results would be in the prepaid space, where it seems their larger rivals have no interest or clue in dominating. But, what fun are prepaid customers? Prepaid peeps are crazy!
Postpaid is where it’s (still) at and let’s hope that Sprint and T-Mobile US can at least make a decent showing in the coming weeks. Otherwise, all those rumors about a possible Sprint/T-Mobile US tie-up won’t sound crazy for crazy sake. They might actually start making sense.
OK, enough of that.
Thanks for checking out this week’s Worst of the Week column. And now for some extras:
–Smith Micro Software this week launched its AniMates mobile messaging application for Apple’s iOS platform that allows iPhone users to “express themselves with animated characters, colorful backgrounds and dynamic voice effects.”
The application was initially launched for Google’s Android OS, thus whether you knew it or not, Android users have been able to taunt their Apple iOS friends/enemies with their ability to “express themselves with animated characters, colorful backgrounds and dynamic voice effects.” And, don’t think this fact has not kept millions of Apple iOS-using animal lovers up at night.
In selling the news to Apple fans, Smith Micro claims that the application can make iPhone messaging “more fun,” though I think Apple’s embedded auto-correct does a fine enough job of that. In reality, the benefit of this move is that your Apple-loving friends will now have one more “cool” app to annoy you with. Thanks Smith Micro.
–I know the month is almost over, but did you know that July was National Cellphone Courtesy Month? Of course you did.
But, then again, July is also:
–National Blueberry Month
–National Anti-Boredom Month
–Unlucky Month for weddings Month
–National Hot Dog Month
–National Ice Cream Month
And hosts:
–Nude Recreation Week
So you might be excused from remembering that whole cell phone thing seeing that you are busy staving off boredom stuffing your face with blueberries, hot dogs and ice cream, all the while avoiding weddings. And, of course accomplishing all of this while for one week running around naked.
I welcome your comments. Please send me an e-mail at dmeyer@rcrwireless.com.
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