Gizmodo
Verizon Wireless and AT&T's quarterly earnings are both out, with Verizon claiming the "highest net adds in the industry," 1.5 million new subscribers, while AT&T says they've pulled in 1.3 million. (They both made out like bandits money-wise, as usual.) Between them, that's 2.8 million new subscribers. Where are they coming from? As of December, CTIA reports an 84 percent penetration, with 255 million subscribers. That weird orgy of unlimited plans a couple months ago further suggests that the market's already pretty saturated. I mean, do you know anyone still in the market for a cellphone? Where are all these new subscribers coming from?
Sprint is one likely source of bleed out, if past trends continue—most recent quarterly report from Feb. has them losing 108,000, and they lost 60,000 the quarter before that. I suspect the upcoming report will be worse. And AT&T told us that they port more numbers from Sprint than any other carrier. But that doesn't add up to the millions AT&T and Verizon are piling on (especially when you consider T-Mobile added almost a million last quarter (PDF) as well).
So we talked to a couple of guys who get paid to think about numbers and the wireless industry over at Gartner. There's actually a few things going on here that'll let the wireless industry continue to grow at about 20 million a year through 2012, even though it already looks pretty gorged. For one, "subscriber" doesn't mean just you—if you have two lines, a business and personal, as well as a PC card, you add up to three subscribers. Gartner just calls them "lines" to be more clear, since there's a significant number of second lines out there.
And that's where there's a fair bit of growth now: Second lines (like for an iPhone) and data-only PC cards. Informal estimates put 8-15% of US subscribers having two lines. Also, not huge, but growing, are devices like Kindle, with embedded data. Wireless analyst Tole Hart says data will be increasingly driving revenues over the next few years.
Demographically, new subscriber growth is in a couple spots. The average starting age of cellphone ownership has inched down from 14 to about 12, heading downwards. There's also a significant portion of our grandparents who are just starting to pick up cellphones. And finally, there's a socioeconomic expansion: Hart mentioned Hispanic populations in particular as a source of growth.
The US phone market will reach the true "saturation point" in the next five years, at which point data will become more important than ever. Hence the push for 4G technologies and focus on making networks suitable for data (like Verizon's move to be open). That said, Verizon and AT&T will no doubt still be happy to report stealing customers from smaller carriers.
Comments
Where are they coming from?
Well, there's seniors and kids getting phones every day. Not everyone is between the ages of 18-50 and already has a phone, hell, there's still a ton of people in that random age range that don't have a cell. Besides, the Unites States has over 350,000,000 people.
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Wait till Sprint/Nextel gets to that ripe selling point where they've hemorrhaged cost but retain value in subscribers.
Nice picture btw.
They're also selling second phones. Many people with a sales or finance job has a phone issued by their company, separate from their personal phone. Perhaps that's becoming more common.
As a fake teacher I can tell you that every kid in my district has one. high school and middle school. Its kinda gross. I didnt really get one until I turned 17. My younger brother got one when he was 13 and now at 18 he has an iPhone.
Well, hate to break it to you, not EVERYONE has a cellphone yet. People are still buying their first one. Me, I'll wait on my *first* cellphone a while longer, too much chaos right now.
Have they started providing services in China yet? :-)
And I see more people carrying 2 cell phone these days. Personal and work... and then the kids... well the market is growing everyday...
-Des
[techwatch.reviewk.com]
@daftrok: That's good stuff right there.
I know a lot of people that are getting MORE cell phones. They have one for work, one for personal and sometimes a wireless device, like a Blackberry that they use only for e mail.
Well my friend they're all coming from Sprint, i guess they don't know that AT&T customer service has gone from ok to 10x worse than sprint in the last year, that's why if your a iphone owner Apple don't even want you talking to them & calls get forward to apple instead. Now verizon is class A all around, but there's a catch, they charge you double on taxes
Re: story picture
Is that the bike messenger/rave dancer from Spaced?
@FightingChance: YES IT IS!!! Thats Tyres!
I knew he had an un-credited role as a zombie in the flick, but this is the first time i'd seen him!
I was JUST about to comment about this!
@WildWon: You forgot to mention "Shaun Of The Dead" there.
It's all those little young ones!
@thechansen: That's crazy. I didn't break down and get one until I was like 24.
Well, how about people just switching services. I had Att, but switched to Verizon. I am a "new subscriber" to them. I'm sure a ton of people switch to Att for the iPhone.
@FightingChance:
sure is, plus the roommate from "shaun" is the same actor who played Tim's nemesis from the paintball game.
I agree. Those are alot of new subscriber lines for AT&T and Verizon. Someone is getting hurt and were going to find out soon enough.
You're just jealous my dog has an iPhone and you don't.
Man those people must really want they're anytime minutes.
all I know is that there's a bunch of new unprotected :) wifi networks in my building. so keep em coming.
As an Amish person (Mennonite, actually), I can tell you that there still are people out there who don't have cellphones yet or, come to think of it... any kind of phone for that matter.
Not too mention AT&T bought out CellOne. I am sure that is a few of their numbers. I would be one of those.
my 3 year olds been wanting her own phone for weeks.
They are coming from Sprint! Check Sprints numbers.
I remember my first. She was small yet capable, I knew all the right buttons to push, and she seemed so easy to work with. Everyone should have such a special first. I often wonder if I should have waited till I was married before my first, but you know kids do some crazy things in their youth. You kids out there should know while the first might be nice the second and third might disappoint. I was always comparing them to the first. Then I tried going back to the same type but none were like the first. But now I'm happy with my eight and I think me and her will be together for a long time to come, we have an extended warranty.
I just struck a pretty good small business deal with Verizon...we've been fed up with crappy support Sprint. Migrated 45 users over...got each Blackberry 8830 for $80 a pop.
@Joseph:
"Sprint is one likely source of bleed out, if past trends continue-most recent quarterly report from Feb. has them losing 108,000, and they lost 60,000 the quarter before that. I suspect the upcoming report will be worse. And AT&T told us that they port more numbers from Sprint than any other carrier. But that doesn't add up to the millions AT&T and Verizon are piling on"
Or you could try READING the posts...
just a thought.
@Curves: That's a great idea. I want four cellphones. One for morning, one for lunch, one for dinner, and one to cuddle with me when I sleep. Maybe two more to strap to my head for backup.
AND.... don't forget people upgrading phones with a renewed contract for another 24 months...
I bet that counts as a new subscriber...
(creative accounting they call it?)
@Darrone: I have Sprint myself and am out of contract... the only reason I haven't renewed is that their hardware sucks.
Waiting for Instinct otherwise might look elsewhere. But nobody else wants me as much, so Sprint is willing to grovel at my feet with a 20% discount.
American cell companies all suck. There is nothing appealing about any of them.
@liveinvt: My only point was he was asking for something that had an entire paragraph about it in the post. That's all. Read before you comment. Very simple rule.
Well, my employer just switched to AT&T for employee discounts and no terms service... that's a good 50,000 new customers (if we all fall for it)
@fostina1: My five and a half year old already has one.
ALL this an at&t (as well as the other carriers) up their per text message rates. All the while these services are becoming cheaper to operate.
greedy bastards.
I know I need to do a better job taking my medication, but cell phones make Monty angry.
I would be more interested in the numbers showing how many people with a cell phone would prefer to see if the phone can blend.
@shamoononon:
Maybe you could help us understand that a little better. I have a six year old, and we are always with her (and she can not have one at school), so I guess I do not understand the point. But, I suspect you have some insight that I have not tumbled to yet.
@Monty: I'm a single mother, she can have it in her backpack. Good for emergencies huh? nice you have so much extra time to spend that you can always be with her, too bad some other people need to make a living.
Haha i remember watching the movie and going "is that tyres?" That movie had pretty much everyone else from the show, and Tim and Dawn from the office. Got to love the limeys.
@Monty: I re-read your comment, I may have over reacted, carry on.
@GOKOR: Actually only 301 Million (est. July 2007)...
@FightingChance: So bizarre, I came in to ask the same question.
@master_of_fm: He was the voice of Darth Maul, too.
@Darrone: Oh, I wasn't criticizing. I was just lamenting about my personal cell carrier experience. :>
@Monty:
My five and a half year old has one too (a prepaid Firefly) and this is why - he does Tae Kwon Do three times per week, and we don't sit there during the lessons. Once I was ten minutes late picking him up and he was in a panic by the time I got there. There is a phone in the office but his instructor was already teaching the next class by the time he got scared. It costs me about $3 a month to have and it was well worth it. Now, if he's scared or worried, he calls, and no more freakouts.
Sprint has been bleeding customers for months now, with their network in the shitter, their customer service terrible, it's no doubt why their customers are fleeing in record numbers.
I'd expect them to announce a net loss of over a million subs for the quarter.
T-Mobile has amazing customer service.