Verizon Wireless Retains Lead in TBR's Mobile Operators Benchmark

­Verizon Wireless retained its lead in TBR's Network Business Quarterly (NBQ) Mobile Operators Benchmark, maintaining strong top-line and bottom-line growth in a difficult economy. Data revenue continued to grow strongly, and TBR expects this trend to continue.

Commenting on Verizon's strong data revenue growth in 2Q09, TBR NBQ Director John Byrne said, "Verizon's aggressive investment in 3G EV-DO technology is clearly paying off in the form of strong mobile broadband sales on laptops and smartphones. Looking into 2H09, it is clear that Verizon will be advertising its advantage in terms of both network speeds and 3G footprint as a means to differentiate from its chief wireless rival, AT&T."

AT&T maintained the No. 2 ranking in 2Q09. The operator continued to benefit from the iPhone's contribution to subscriber metrics, but acknowledged that its network has suffered as a result of high usage by a growing number of iPhone customers. Another weak spot in the operator's results was the net loss of more than 400,000 prepaid customers, which TBR attributes to the introduction of highly competitive prepaid plans by a number of operators, including Boost Mobile, T-Mobile and Tracfone, combined with prepaid customers' ability to easily switch between operators. While AT&T will continue to enjoy strong postpaid growth, TBR believes it will be unable to match competitors' pricing on prepaid plans, which will result in subscriber losses moving forward.

Industry consolidation also continued during 2Q09; AT&T's acquisition of Centennial is expected to close in 2H09 and Sprint announced in July that it would acquire Virgin Mobile USA for $438 million. The latter acquisition is meant to strengthen Sprint's rapidly growing Boost prepaid segment and allow the Virgin Mobile and Boost Mobile brands to provide distinct offerings and target different market segments.

Overall, though the wireless industry has maintained more resilience than most throughout the U.S. recession, the majority of operators did experience declining year to year growth. On the upside, an increasing number of customers have come to view data services, principally text messaging, as indispensible, helping data revenue grow industrywide year-to-year. The growth in consumer adoption of smartphones, rapidly increasing numbers of available applications and affordable data plans have all contributed to the growth in data adoption, and TBR believes this trend will continue once the U.S. economy shows signs of sustained improvement.

Posted to the site on 12th October 2009