Wireless revenue trends are up 2% year-to-year for U.S. carriers covered in Technology Business Research Inc.’s (TBR) 4Q17 U.S. & Canada Mobile Operator Benchmark report. Those revenues have reached an annual total of $62.7 billion, TBR said.
According to the research firm, higher equipment revenue was the primary reason for the increase. Customers purchasing unsubsidized devices on equipment installment plans (EIPs) as well as adoption of more expensive smartphones such as the iPhone X drove the revenue increase.
Wireless Revenue Trends
T-Mobile was the only Tier 1 U.S. carrier to increase service revenue year-to-year in 4Q17. Other operators expect service revenue will gradually improve in 2018 as the bulk of subscribers have now transitioned from postpaid contracts to discounted service plans provided to EIP customers, according to TBR.
AT&T, Sprint, T-Mobile and Verizon expect to offer commercial 5G services by the end of 2019; TBR said. However, monetization opportunities will be initially limited as compatible smartphones will not be widely available until mid-2019. Additionally, compelling use cases, such as autonomous driving and remote surgery, will not be prevalent for several years.
“All Tier 1 U.S. carriers, with the exception of Sprint, reduced postpaid phone churn in 4Q17, which was largely attributed to customers’ increased satisfaction with their network coverage and accelerated data speeds enabled by LTE-Advanced technologies,” said TBR analyst Steve Vachon, in a prepared statement. “Mobile video bundles are also helping to reduce churn as AT&T (HBO Now), Sprint (Hulu) and T-Mobile (Netflix) now provide free over-the-top video subscriptions to their unlimited data customers, which serves as an added incentive to retain customers.”
The TBR report adds that combined wireless revenue among Tier 1 Canadian carriers rose 7.7% year-to-year to $6.2 billion, an increase driven by continued postpaid additions primarily from shared data programs and higher data usage arising from the accelerated speeds offered by LTE-Advanced services. Refraining from offering unlimited data plans is benefiting Canadian carriers as service revenue continues to increase as subscribers migrate to larger data tiers and overage fees remain.