Never a Dull Moment for the Top Four Mobile Carriers

Carl Weinschenk
Slide Show

Five Barriers for Enterprise Mobility

The four major wireless carriers continue to adjust to a world in which things change with ever-accelerating rapidity. Three made news last week and the fourth – Verizon Wireless – was said by analysts to be on the road to a healthy 2016.

T-Mobile last week released subscriber numbers. It said that it added 8.3 million customers last year and 2.1 million during the fourth quarter. The carrier claims 63 million customers at year’s end 2015. The bottom line, according to the press release, is that the company has averaged 23,000 daily additions for the past two years.

That’s the good news for the carrier. The other side of the coin is that parent Deutsche Telekom is facing pressure from investors and legislators to investigate claims that it mistreats workers. Reuters reported on the issue:

But it has been accused by its main labor union, the Communications Workers of America (CWA), of flouting employees' rights and was last year found to have engaged in illegal work practices in two U.S. National Labor Relations Board cases.

T-Mobile America US has about 45,000 employees.

Sprint ended two-year contracts. The story at The Verge said that the cessation of the marketing approach occurred at the same time as AT&T. The Verge credits Android Central with breaking the news that Sprint made the move.

The move completes a cycle for the big carriers, according to the story: As of last Friday, two-year contracts were dead among the big four. T-Mobile ended the subsidization of phones almost two years ago. Verizon followed suit last August.

AT&T, in addition to ending two-year contracts, is offering unlimited data plans for customers who also subscribe to one of its two other major offerings, according to CNET. The story said that AT&T is offering unlimited data for a single line for $100 per month. Each additional line is $40. The only customers eligible, however, are those that subscribe to DirecTV --  which AT&T bought for $49 million last year – or U-Verse services. 

The move can be seen as both an effort to reduce “cord cutting” and get its subscribers to take more services from the company, which increases all-important revenue per user (RPU).

24/7 Wall St., in a financial look at the overall company, suggests that Verizon is better positioned this year than it was in 2015. The story suggests that the stock of Verizon, which now fully owns Verizon Wireless, only lost 1.87 percent during the awful first week of trading this year. The rest of the year may be good for the company:

At the end of 2015, analysts had a consensus 12-month price target of $50.12. Then add its 4.89% yield, which is how we came up with a total return expectation of 13.3% for 2016. That would now be closer to 15%, if you include the selling in Verizon’s shares over the past week. The consensus analyst price target for AT&T of $37.15 is about 15.8% in total return expectations for 2016.

The wireless sector is volatile due to the vagaries of the market in general, these companies’ broad service mixes, and the fickle nature of consumers. Corporate planners must keep abreast of the market, however, as they make their long-term plans.

Carl Weinschenk covers telecom for IT Business Edge. He writes about wireless technology, disaster recovery/business continuity, cellular services, the Internet of Things, machine-to-machine communications and other emerging technologies and platforms. He also covers net neutrality and related regulatory issues. Weinschenk has written about the phone companies, cable operators and related companies for decades and is senior editor of Broadband Technology Report. He can be reached at and via twitter at @DailyMusicBrk.

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