In the ever-evolving landscape of the telecom industry, a fascinating shift is underway — one that not many could have predicted just a few years ago.
In the past few years, wireline companies have exploded into the wireless market. This unexpected twist in the telecommunications saga reflects a dynamic shift, demonstrating how industries that once operated distinctly are now converging in unforeseen ways.
In order to learn more about this trend, we’ve done a deep-dive into quarterly reports by the major US carriers to gain insight into how wireline companies are reshaping the wireless market.
The biggest trend to be aware of?
Wireline’s share of the wireless market is still relatively small, but growing fast.
In the United States, wireline carriers still account for a very small number of wireless subscriptions compared with telecom’s Big 3 (AT&T, T-Mobile, and Verizon). Wireline carriers Altice, Charter, and Comcast totaled just under 13 million subs at the end of Q2 (total represented by the black bar in below chart).
Verizon’s wireless subscriber numbers have remained essentially flat. T-Mobile saw a modest 6% growth. And AT&T has seen more robust growth of 13% — largely thanks to the strength of its growth in non-phone connected devices, which accounted for 90% of its net wireless adds in Q2 this year. Meanwhile, the big cablecos have seen an explosive 41% YOY growth in their wireless subscriber base since Q2 of 2022.
This growth reflects a necessary pivot in strategy as US consumers continue to get rid of cable TV in favor of streaming services. The wireline companies have been able to accelerate this pivot into wireless services through aggressive bundling of wireless and internet services.
Why is bundling winning subscribers? Several factors, including:
- In the face of rising food, rent, and energy costs, price-conscious consumers are always looking for bargains and discounts, especially on necessary services.
- Most younger consumers (especially Gen Z and Alpha) don’t care about “types” of connection or “prestige” brands. They want the cheapest service that will get the job done.
- Bundling brings convenience. Bundles come with only one bill, and streamlines the integration of wireless, tablet, TV, streaming, internet, and smart home devices when it’s handled through one provider.
So who’s coming out on top?
Cable is cleaning up, and Charter is leading the charge.
Charter’s Spectrum Mobile has emerged as the clear leader among the wireline carriers across all metrics. They lead in numbers of subscribers — 6.6 million, compared with Comcast’s 5.9 million. They also are leading in wireless subscriber growth, with a whopping 55% YOY growth in wireless subs from Q2 2022 to Q2 2023. Simultaneously, Charter has also seen the slowest loss of cable TV subscribers — seeing only a 5% decline compared to Altice’s 10% and Comcast’s 14%.
Charter’s wireless growth may also be accelerating. The first three quarters of 2022 saw Charter gaining under 400,000 net wireless adds per quarter, whereas they have gained more than 600,000 subscribers per quarter since Q4 of 2022.
The race to own the consumer is heating up.
The acceleration of growth in wireless for wireline companies has kicked off a new race to own the consumer. Because bundling is driving such growth, traditional telecom operators and MVNOs are also increasingly shifting to bundling.
The last several years has seen an increase in telecom companies partnering with major streaming services to offer free streaming accounts for wireless subscribers. Fixed Wireless Access has also given telecom companies the ability to bundle wireless and internet services, which has proven very attractive to consumers — FWA accounted for about 90% of net consumer broadband additions in 2022. And in July, Dish and Amazon shook up the market with their launch of Boost Infinite’s $25 unlimited wireless plan, being offered through Amazon Prime.
With things moving so quickly, this race is definitely too close to call right now. About the only thing that is certain is that there are bound to be more surprises ahead.
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