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US multi-device use to add 90m w-connections by 2022

US multi-device use to add 90m w-connections by 2022

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Yet price competition from T-Mobile, MVNOs and cable will result in meagre 2% service revenue growth

The US wireless carrier market continues to ramp up competition with a continued focus on network speeds and adding more value for consumers, according to the Strategy Analytics Wireless Operator Strategies service report.

While growth has slowed in the maturing US wireless market, Strategy Analytics forecasts show the outlook is not bleak; US wireless subscriptions will add 15 to 16 million net adds per year through 2022, while gross adds will grow each year, from 113 million in 2016 to 139 million in 2022, providing plenty of room for competition.

By 2017, wireless service revenue will be 5% below its 2014 peak as price competition intensifies and the growth in equipment instalment plans, leases, and bring your own device (BYOD) devices dominate post paid connection volumes, the study showed.

T-Mobile will capture 18% of retail service revenue by 2022, up from 14% in 2016 as it continues to disrupt the market with its ‘Un-carrier’ strategy, currently seeing it dominate smartphone net adds and move ahead of AT&T in post paid gross adds.

Just under 18% of subscriptions (excluding connected devices) are still on feature phones today offering strong opportunities for device upgrades to help mitigate against falling ARPUs, the study also showed.

Additionally, the 5G roadmap is creating opportunity as well as potential for new disruptors, and the major US carriers as well as cable companies are hard at work on developing and assessing technologies and strategies to lead in 5G, noted Strategy Analytics. 5G will account for 6% of connections by 2022 it claimed.

Susan Welsh de Grimaldo, director, wireless operator strategies said: “US carriers and MVNOs are hard at work adding value to consumers and competing on networks, pricing, and value propositions. 5G provides an exciting opportunity for both existing and new players to disrupt and push US wireless growth, but more work is needed to fully develop business cases to drive revenue streams that will support the investments needed. ”

While Phil Kendall, executive director, wireless operator strategies, commented: “The growth in prepaid plans and instalment or lease options on handsets have contributed to a 4% fall in service revenue over the last two years, with connected devices the main source of future revenue growth for US carriers. Managing multi-device user needs will be a key battleground for carrier success in wireless, with phones accounting for only 70% of connections by 2022.”

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