The US Wireless market is reaching maturity fast and market penetration or saturation levels of mobile devices are above 70%, a pretty high level. Of course, some European countries have market penetration rates of more than 100%, but that’s because some people have more than 1 mobile phone and these countries generally have smaller populations, are smaller countries, or have limited wireline penetration. It is expected that when penetration levels reach 80%, the U.S. market will generally be saturated.
At this level, one could expect the service provider landscape to consolidate, as service providers look to maintain profit levels through cost cutting and by leveraging the economies of scale. Consolidation, or if you prefer to call it Mergers & Acquisitions, is a great way to increase economies of scale, especially in industries with high fixed costs.
In fact, we already see consolidations of sorts happening – recently AT&T Mobility acquired Dobson Communications for about $2.8 billion, T-Mobile has reached a deal to buy SunCom Wireless Holdings for $2.4 billion, and Verizon Wireless is acquring Rural Cellular Corp that has 700,000-plus customers.
In the meantime, here are the top 10 wireless providers in the US. The list does not include Mobile Virtual Network Operators (MVNO), who don’t own a wireless networks
|Top Ten U.S. Wireless Service Providers by subscribers|
|Operator||Subscriber Base||Net Subscriber additions||Average Revenue Per User||Revenues||Subscriber Growth (Q3 ’07)|
|AT&T Mobility||65,700,000||2,000,000||$50.82||$10.9 billion||3.14%|
|Verizon Wireless||63,700,000||1,600,000||$52.17||$11.3 billion||2.58%|
|Sprint Nextel Corp.||54,000,000||-60,000||$59.00*||$8.7 billion||-0.11%|
|T-Mobile USA Inc.||27,700,000||857,000||$53.00||$4.89 billion||3.19%|
|Alltel Corp.||12,000,000||213,000||$55.96||$2.3 billion||1.81%|
|U.S. Cellular||6,067,000||52,000||$52.71||$1 billion||0.86%|
|MetroPCS Communications Corp.||3,660,000||114,300||$42.77||$557 million||3.22%|
|Leap Wireless International Inc.(estimates)**||2,700,000||36,500||$45.13||$393 million||1.37%|
|SunCom Holdings||1,140,000||2,200||$57.38||$240 million||0.19%|
|**Second quarter results; Leap has not yet reported full 3Q results|
|Source: RCR News|