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Everyone is screwed except T-Mobile – Analyst

John Legere Gummy

Fresh data from Chetan Sharma Consulting has given a doom and gloom perspective on the US telco space for pretty much everyone except T-Mobile.

Consumption of data may be continuing to grow quickly across the world, perhaps the US in particular as its consumers are some of the most data-hungry globally, but monetizing this trend is becoming increasingly difficult for the major players. Part of the reason for this may be T-Mobile countering wider industry trends and essentially forcing other operators to reopen offers for unlimited data plans, but the research does not paint the industry in a fantastic light.

Q1 2017 was in fact the first in 17 quarters where US mobile data services revenue decreased, as the pain was felt all over the place. Verizon suffered its first ever decline in year-on-year service revenues and for the first time, the postpaid net-adds were negative. It is a trend we have been waiting for, but growth is slowing. Yes, there will be an uplift of 18% across the industry throughout 2017, though Chetan Sharma Consulting expects the monetization troubles at the big players to continue.

That said, T-Mobile seems to be having a great time. In the last 12 months, T-Mobile has captured 58% of the postpaid net-adds, while also led in most growth metrics including service revenue, net-adds, postpaid net-adds, and postpaid phone net-adds. In fact, Sprint and T-Mobile are less than 2 million subscriptions away from overtaking AT&T.

The success of T-Mobile should perhaps not be that surprising. CEO John Legere has been chirping away for quite a while now, but it does show the dangers of a diversified focus. Yes, diversification can attract new revenues, and reduces the risk of over-dependence on a specific segment, but it doesn’t seem to be working for the other operators in the US.

Verizon and AT&T have been searching for a way to capture the lost profit margins of the traditional telco market, because, apparently, they are no longer there. T-Mobile has done two things, and two things very simply. Firstly, they created a fresh and appealing business model and brand to challenge the status quo. And secondly, the focused on one thing and one thing along. There are no distractions. The wireless market is the number one priority.

So yes, diversification can work. But T-Mobile is showing you don’t have to chase the end of the rainbow to make some serious cash.


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