ICC News This week, the chief executives of the three major U.S. 5G network operators — Verizon’s Hans Vestberg, T-Mobile’s Mike Sievert, and AT&T’s John Stankey — all said that while they see increased competition from cable companies Intense and the number of new wireless customers is slowing across the industry, but they will continue to grow their businesses.
In general, their arguments rest on the belief that wireless service is essential to modern life in a way that protects people from any major annoyance.
“Wireless is a necessity, and this allows Verizon to ‘upsell’ customers with additional products and services, whether it’s fixed wireless access or a Netflix subscription,” Verizon’s Vestberg said at an investor event Tuesday. Wireless Too sticky.”
All three big carriers have raised their prices and fees recently, and they’ve seen little major customer dissatisfaction. They believe this is indicative of the industry’s health as a whole.
Growth with Fewer New Customers
However, most executives concede that the number of new wireless subscriptions hitting the industry should slow in the coming months. For example, Verizon’s Vestberg recently predicted that the U.S. wireless industry would add 5 million to 6 million customers per year rather than the 10 million customers it has seen in recent years.
Vestberg explained that much of Verizon’s financial hope encourage existing customers to spend more. But he said Verizon’s 20 percent growth in wireless service revenue would come from acquiring more customers.
At an investor event this week, T-Mobile’s Sievert said that he expects the company to add postpaid phone subscribers in the second quarter to match or exceed the 723,000 new subscribers it added in the same period last year. That means he expects no slowdown in T-Mobile’s share of the industry’s quarterly new customer additions.
AT&T’s Stankey acknowledged that T-Mobile’s recent price changes are having an impact on the market, which could help T-Mobile’s performance in the second quarter. But at an investor event, he said he did not expect “substantial changes in share” across the industry.
In addition, Stankey noted that cable operators such as Comcast and Charter might experience slower mobile subscriber growth as customers increasingly demand data from their smartphones and switch to new computing devices such as augmented reality glasses. For example, Apple is widely expected to release an augmented reality device later this year that could spark demand for faster 5G connections.
Interestingly, a recent survey of more than 1,000 respondents by TD Cowen financial analysts found that most customers switching to Charter are from Verizon. “39% of customers were formerly Verizon, 35% were AT&T, and only 10% were T-Mobile,” they wrote. This confirms T-Mobile’s comment that given its low-priced plans, it could compete well with the cable companies … but also shows that Verizon’s mismatched positioning in the market is a factor in the cable companies’ success, as is AT&T.”
Where will Growth Come from?
Vestberg, Sievert, and Stankey all said in separate appearances this week that they see signs of Growth. But they differ slightly in how they view the performance of this Growth.
Stankey believes that AT&T will be very cautious in its pursuit of Growth. For example, he said the carrier would lose about 75,000 customers from a government contract that AT&T “choose not to pursue given its uneconomic payback scenario.” He did not provide contract details, including the government agency’s identity. But he said AT&T will continue to use its wireline and wireless businesses to attract new customers. He reiterated that AT&T wants to sell wireless to its new fiber customers and to sell fiber to its new wireless customers in regions where both products are available.
Sievert said that T-Mobile would continue to gain market share among certain demographics, including rural areas and business customers. He also said that the company will continue to explore the FWA market. But more applications are likely to emerge, which could boost overall demand for wireless services, he said.
Likewise, Vestberg sees the potential for additional Growth from new applications and services, such as private wireless networking and network slicing — although demand for such products has been relatively subdued.
“I predict the next five years will be the second phase (of 5G), and we will see more innovation,” he said.