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USA Sees Lowest Ever Annual Growth Rate at 90% Penetration Looms
Annual growth in the American market has been in decline for the past four years, and in 2008 it dipped below 6% for the first time ever. Q1 09 saw a new low of 5.6%, 3.0pp below the year-earlier figure. In terms of quarterly growth, there was also a record low of 1.2%. Quarterly net additions stood at 3.4m, the lowest figure for six years, while annual net additions dropped to just 16m.
The end-quarter customer base stood at 273.95m. Four operators - AT&T, Sprint, T-Mobile and Verizon - dominate the market, and Verizon's acquisition of Alltel, formerly the fifth largest operator, took their combined market share to 90.2% compared to 85.6% a year earlier. The acquisition also propelled Verizon to the number one spot in the market. Its end-quarter customer base of 86.55m compared to 78.32m for AT&T, 49.08m for Sprint and 33.17m for T-Mobile. The Alltel deal boosted its customer base by around 14m, and it added just under 14.5m in total in Q1 09.
AT&T was the only other major operator to see solid growth with a gain of 1.31m, only 1k lower than the Q1 08 gain. Sprint, however, saw its seventh successive net quarterly loss. Although the 0.18m decline was significantly below the average quarterly loss of 1.15m in 2008, it was nonetheless disappointing. Meanwhile, T-Mobile added just 0.42m, its lowest figure since Q3 01.
The remaining 10% of the market is dominated by US Cellular (USC), MetroPCS and Leap Wireless. USC was the largest with 6.24m customers, but it grew by just 1.1% annually and quarterly net additions stood at a sluggish 47k. Both MetroPCS and Leap added more than 10 times as many customers in Q1 09. In fact, both scored record highs for net additions: MetroPCS added 0.68m and Leap 0.49m. MetroPCS looks set to overtake USC very shortly having reached 6.05m at the end of Q1 09, while Leap is now less than 2m behind on 4.34m. However, both MetroPCS and Leap saw significant declines in ARPU, MetroPCS seeing a 4.3% fall to USD40.40 and Leap dropping 6.2% to USD42.21. These ARPUs are around USD10 lower than most other major operators, Sprint occupying top spot with USD53.54. Clearly MetroPCS and Leap are benefiting from the economic downturn. They also present interesting opportunities for future acquisitions.
Posted to the site on 18th June 2009
This article was extracted from The Mobile World Briefing, the weekly newsletter from The Mobile World.
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