Earnings results from national telecom carriers Verizon, AT&T, T-Mobile US, Sprint, and Comcast showed strong financial results. They also shed light on are several important trends that enterprise telecom managers should be aware of.
Although it added 615,000 subscribers, Verizon faced a 46% decline in its rate of growth for postpaid wireless subscribers. Another important element was its revenue drop of 5.3%. Landline divestitures and declines in AOL revenue accounted for 3.5% of the drop, but this was its first decline in quarterly revenue in six years.
AT&T’s Business Solutions wireless subscriber base was up 12.1%, while its Consumer Mobility wireless subscriber base was down 0.8% for a loss of 180,000 connections. T-Mobile US added 890,000 postpaid subscribers, and its postpaid phone churn rate – the rate at which users leave a service – declined to an all-time low of 1.27 percent from 1.3 percent a year earlier. Sprint gained 180,000 postpaid subscribers and 528,000 wholesale customers, but lost 331,000 prepaid customers. Comcast’s Business Services revenue increased by 17.0%, and its high-speed internet customers grew by 220,000. This was its best second quarter result in eight years.
There are several takeaways from these reports. First, AT&T and Verizon are facing stiff competition so enterprises should look for alternatives when negotiating new contracts. Competitive pressure has forced Verizon to introduce more competitive plans. Simply conducting a more open RFP will lead to better deals from incumbents.
Second, T-Mobile’s reduced churn and Sprint’s gains show that their networks are improving. Organizations should give these mobile providers a second look with field tests of their services. Telecom managers need to act quickly because Sprint CEO Marcelo Claure says, “You will see us move pricing up because we’re committed to increasing the average billing per user.”
Finally, shopping requires some work but the cost savings are worth the effort. The work can be reduced with Telecom Expense Management (TEM) software to prepare information for RFPs and manage provisioning activity when making a change. Accurate inventories for wireless services will help organizations manage contract expirations, and determine which plans can be switched to different providers or – at least pooled together – to negotiate better plans.Tags: at&t, sprint, t-mobile, verizon