& cplSiteName &

Slim Postpaid Pickings for Sprint, T-Mobile

Sarah Thomas
7/25/2014
50%
50%

AT&T and Verizon's reduced churn and stable mobile customer gross adds in the second quarter likely doesn't bode well for its smaller two rivals, which report next week, because it suggests there have been fewer postpaid mobile subscribers left for Sprint and T-Mobile to poach.

Bernstein Research analysts believe that both Sprint Corp. (NYSE: S) and T-Mobile US Inc. will report reduced net postpaid phone additions when they reveal their second quarter earnings next week. Instead, they will bolster their financials with tablet sales and prepaid customer additions. And, notes analyst Paul de Sa, shifting from device subsidies to installation payments and new pricing plans will boost their numbers as well. (See Sprint Plans More Bundled-Content Offers, Sprint Launches No-Sharing 'Framily' Plans and T-Mobile Sacrifices Costs for Customers.)

What this shows, writes de Sa in a research note, is that these two US carriers are really now mostly competing with each other, and less so with AT&T Inc. (NYSE: T) and Verizon Wireless . If that's the case, it's going to make winning approval for their merger less likely than ever. (See DT Asks for $1B Prenup for Sprint, T-Mobile — WSJ and Is SoftBank Ready to Reunite With Legere?)

AT&T and Verizon reported relatively flat postpaid smartphone additions of 707,000 and 304,000 respectively, in this latest quarter. Churn was also low -- just 0.84% at Verizon and 0.86% at AT&T, it's lowest churn ever. (See AT&T: Capex Freeze? What Capex Freeze?, Verizon Continues 4G LTE Capacity Spend in Q2 , Verizon Loses Its Postpaid Net Add Crown, and AT&T Adds 625K Postpaid Subs in Q1.)


Light Reading has all your earning news. Check back to our news and views queue daily for updates.


These numbers are bad news for Sprint and T-Mobile, which has been goading AT&T and bragging about stealing its customers. Bernstein's de Sa suggests that Sprint will lose the most customers in the second quarter, including price sensitive ones that will flee to T-Mobile. (See T-Mobile Sacrifices Costs for Customers.)

Jefferies & Company Inc. analysts took it even further, noting this week that they expect Sprint to report 879,000 handset subscriber losses for the quarter, making it one of the worst in Sprint's history. (See Sprint Feels the Churn Burn Before Spark.)

The bright spot in all this for Sprint, as well as T-Mobile, will be in prepaid subscribers and tablets. Even though neither includes tablets in shared data plans (which AT&T and Verizon do), T-Mobile has been pricing them aggressively. In addition, de Sa says that AT&T's gap between killing its low-end prepaid brand Aio and scaling up Cricket was good for Sprint and T-Mobile, which captured some of its customers that left in the hiatus. (See Tablets Grow Like 'OMG' in Q1, T-Mobile Drops LTE iPad Prices to WiFi Levels, and AT&T Plans a Prepaid Cricket Attack.)

"T-Mobile's MetroPCS brand will likely be the primary beneficiary, having expanded into Cricket geographies, although these gains are unlikely to continue much past the next quarter as AT&T begins to aggressively expand its prepaid presence," de Sa writes. "Sprint may also face continuing prepaid losses due to Lifeline audits removing (low ARPU) connections from its Assurance brand."

Sprint reports its second-quarter earnings on Wednesday, July 30, and T-Mobile reports on Thursday, July 31. Check Light Reading for all the details then.

— Sarah Reedy, Senior Editor, Light Reading

(3)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
danielcawrey
50%
50%
danielcawrey,
User Rank: Light Sabre
7/26/2014 | 12:00:42 PM
Re: Sprint
Does Sprint still have relatively poor coverage? I know that this is generally true when it some to T-Mobile, so I would have to think that T-Mobile's flashy ad campaigns are hitting true a certain  demographic that is looking to leave Spring. 
smkinoshita
50%
50%
smkinoshita,
User Rank: Light Sabre
7/25/2014 | 10:04:13 PM
Re: Sprint
Up here North of the border, Sprint Canada was eaten up by Rogers.  The only 3rd party we have for mobile is Wind, and as far as our major networks are concerned it's either Rogers or Bell.  (Rogers is aligned with AT&T South of the border).
Light Reading’s Upskill U is a FREE, interactive, online educational resource that delivers must-have education on themes that relate to the overall business transformation taking place in the communications industry.
NEXT COURSE
Friday, September 30, 1:00PM EDT
Gigabit & the Great Migration
Robert Howald, Vice President, Network Architecture, Comcast
UPCOMING COURSE SCHEDULE
Wednesday, October 5, 1:00PM EDT
Gigabit & Smart Cities
Joe Kochan, COO & Co-Founder, US Ignite
Friday, October 7, 1:00PM EDT
Gigabit & DOCSIS 3.1
Ty Pearman, Director, Access Architecture, Comcast
Wednesday, October 19, 1:00PM EDT
Securing a Virtual World
Rita Marty, Executive Director, Mobility and Cloud Security, Chief Security Office, AT&T
in association with:
From The Founder
Light Reading today starts a new voyage as part of a larger Enterprise.
Flash Poll
Live Streaming Video
Charting the CSP's Future
Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it's going from two industry veterans.
LRTV Custom TV
Flexible Deployment Approaches for the Gigabit Services Evolution

9|29|16   |     |   (0) comments


For many operators, the gigabit evolution begins with the shift from DOCSIS 3.0 to DOCSIS 3.1. But that move represents a change not only in the protocol itself, but in the approach to architecting their entire DOCSIS delivery chain -- from the headend to the outside plant and home gateway components.

Jonathan Ruff, senior director of global technical ...

LRTV Interviews
Level 3 VP: Enterprises Need More for Less

9|29|16   |   05:27   |   (0) comments


Andrew Dugan, Level 3 group vice president of global technology and IT, says enterprises need more bandwidth and they need it faster and with greater security, but they want to spend less, if possible. They are looking to carriers to reduce their network complexity and help protect them from cyberattacks as well.
LRTV Interviews
CenturyLink: SDN/NFV Pose New Interconnection Possibilities

9|28|16   |   04:37   |   (0) comments


Network operators should develop new APIs and business processes for reselling virtual assets to each other, says CenturyLink's Bill Walker. That will enable them to build digital business portfolios that help them avoid becoming commodity transport providers.
LRTV Interviews
Level 3: Overcoming Terror of Being Supplier, Integrator & Developer

9|28|16   |     |   (0) comments


At Light Reading's NFV & Carrier SDN event in Denver, Travis Ewert of Level 3 Communications said there is terror in becoming supplier, integrator and developer, but it can be overcome and be cost effective.
LRTV Custom TV
Introducing IoT World News

9|27|16   |   01:43   |   (0) comments


Self-driving cars, medical sensors, smart cities... and refrigerators. In order to address the huge scope of IoT, KNect365 has created a unique online community that will help businesses to understand and monetize the opportunities that live within the IoT market. We look forward to welcoming you to IoT World News -- your gateway to a better connected future.
LRTV Interviews
AT&T: Reusable Functions Next NFV Key

9|27|16   |   06:03   |   (0) comments


The next generation of NFV has to break functions down into reusable software chunks, making everything much more cloud-like.
LRTV Interviews
Masergy on Security: Attackers Gaining Upper Hand

9|27|16   |   5:10   |   (2) comments


At Light Reading's NFV & Carrier SDN event in Denver, Ray Watson, vice president of Global Technology at Masergy, says that because of the growth in virtualization, the threat landscape is shifting in favor of the attackers. As a result, service providers need to think beyond just defending the perimeter and take a more holistic approach to security.
LRTV Interviews
Verizon Takes Next Step on Biz Virtualization Journey

9|26|16   |   4:38   |   (2) comments


At September's NFV & Carrier SDN event in Denver, Light Reading sat down with Victoria Lonker, director of Product and New Business Innovation at Verizon, to chat about where the carrier is with delivering virtualized services to business customers.
LRTV Interviews
Global Services: The $40B Face-Off

9|26|16   |   05:53   |   (1) comment


More service providers than ever before are battling it out to win a slice of what is now a $40 billion global communications services pie, explains Ovum Principal Analyst David Molony.
LRTV Documentaries
MEC Congress: The Key Takeaways

9|22|16   |   03:25   |   (3) comments


Three key takeaways from the Mobile Edge Computing (MEC) Congress in Munich, Germany.
Wagner’s Ring
Time to Shut Up About 'Dumb Pipes'

9|22|16   |     |   (19) comments


Service providers can't compete with OTT players. It just isn't in their DNA. Instead, service providers need to embrace what they're good at -- providing reliable, secure connectivity.
Wagner’s Ring
Keeping Your Tech Career Going After 50

9|21|16   |     |   (13) comments


How do you keep your career moving forward when you're past the half-century mark?
Upcoming Live Events
November 3, 2016, The Montcalm Marble Arch, London
November 30, 2016, The Westin Times Square, New York City
December 1, 2016, The Westin Times Square, New York, NY
December 6-8, 2016, The Westin Excelsior, Rome
May 16-17, 2017, Austin Convention Center, Austin, TX
All Upcoming Live Events
Infographics
Hot Topics
WiCipedia: The Women Helping Women Edition
Eryn Leavens, Special Features & Copy Editor, 9/23/2016
Eurobites: Telefónica Taps Juniper for Network Security
Paul Rainford, Assistant Editor, Europe, 9/26/2016
Open Source Getting on My Nerves
Carol Wilson, Editor-at-large, 9/26/2016
Powell Kills the Cable Show
Mari Silbey, Senior Editor, Cable/Video, 9/29/2016
Telstra Sees Quadrupled Data Capacity by 2020
Carol Wilson, Editor-at-large, 9/28/2016
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
Light Reading CEO Steve Saunders and UXP Systems CEO Gemini Waghmare discuss the strategic importance of digital identity for operators in the midst of transformation.
Join us for an in-depth interview between Steve Saunders of Light Reading and Alexis Black Bjorlin of Intel as they discuss the release of the company's Silicon Photonics platform, its performance, long-term prospects, customer expectations and much more.
Animals with Phones
There's Nothing Like Missing a Full Minute of Pokémon Go Click Here
Live Digital Audio

A vital part of increasing the number of women in comms is transforming the ways companies can support and empower women. While progressive company policies that support both men and women in achieving work-life balance are a step in the right direction, creating a company culture that supports those policies can at times be more challenging.

During this show, we'll talk to Lynn Comp, Senior Director of Industry and Sales Enabling (ISE) in the Network Platforms Group at Intel, about why those challenges exist and how companies can overcome them. She'll provide insight into how Intel has worked to create a culture that supports work-life balance, and provide steps and guidance for other companies wishing to do the same. We will also leave plenty of time to get your questions answered live on the air.