Industry ‘Hungover’ from Unlimited Data
The mad rush to do what everyone else is doing at the unlimited data party might be proving a bit costly for all four of the nation’s major wireless operators. This is according to a research note from Cowen and Company Equity Research.
T-Mobile and Sprint were the first to announce unlimited data plans last August. Verizon jumped in with their own unlimited plan this past February and then AT&T decided to make its unlimited plan available to all wireless customers, not just subscribers with DirecTV.
The results of this heated competition, which has been a boon for consumers, is now taking its toll on the carriers.
“The first quarter of unlimited for all four carriers left much to be desired,” Colby Synesael of Cowen wrote in a research note last week. “Both AT&T and Verizon incurred postpaid losses for the first time on record, a trend that could continue. Verizon specifically had its worst quarter in recent memory with a lackluster performance on nearly all sub metrics. Even T-Mobile’s guidance included a ‘less great’ postpaid net add increase of just +250,000. Combined with continued pricing pressure, AT&T and Verizon are pivoting to new avenues of growth such as Mexico, content, media, IoT and 5G, all of which can’t come soon enough.”
With the telcos providing unlimited data plans, the loss of the overage charge will need to be made up somewhere. Perhaps the ability to deliver growing amounts of data at higher speeds will become a differentiator for the carriers, both for realizing new revenues and for subscriber growth.