Free Newsletter

US cellcos face demons of market saturation

PwC study finds operators looking to new revenue streams like M2M, and rethinking their network designs

By CAROLINE GABRIEL

Published: 22 April, 2013

READ MORE: Metrics | US | LTE

The US mobile operators will soon be feeling the pain already common to their peers in parts of Europe and Asia - a saturated wireless base, and the quest for ways, beyond subscriber growth, to boost revenues.

According to a study by management consultancy PwC USA, the pace of wireless subscriber growth has started to slow as the US market reaches saturation point, and the country is reaching the point where most of the addressable market has a mobile device and service.


"The maturing mobile industry is at an inflection point with price and value conscious subscribers consuming more data services requiring continuous and significant network investments from operators," said Pierre-Alain Sur, PwC's global communications industry leader. "Carriers need to find the right balance of finding innovative ways to retain and attract subscribers, creating shareholder value, while investing significantly in their networks"

Of course, part of the game will be to lure users away from rivals, and to consolidate with other cellcos. But carriers are also looking for new revenue streams such as "multi-device data plans, machine-to-machine (M2M) subscriptions and greater customization of service plans for new revenue sources", according to PwC.

According to the survey, the average tablet connections grew nearly 43% year-on-year due to higher demand for mobility from businesses and consumers, better network connectivity and higher data demand.

Smartphone sales to postpaid customers represented 60% of new device sales, up 46% from the year-ago survey, and accounted for 70% of postpaid upgrades, up 40%. Android was the most widely used operating system with 81% of the prepaid base and 55% in postpaid.

The prepaid sector is where the effects of looming saturation are mainly seen. Prepaid services were 25% of the total base, the same as the year before, a stagnation which PwC attributes to a maturing market, mobile subscriber penetration topping 100%, an "rebounding recessionary consumer purchasing behaviors".

Unsurprisingly, the survey highlights another cellco challenge, the decline of voice, with average minutes of use (MOU) per postpaid subscriber down from 720 a month in late 2011 to 673 in the new study.

The survey indicates that, on average, 65% of carriers' cell sites were now supporting 4G technology, compared with 46% the year before, while 60% of the user base had access to 4G technologies, up from 53%.

Meanwhile, eight of the 12 responding operators have plans for, or are currently in the process of, decommissioning network assets. "Driven by the complexity and cost of maintaining multiple technologies, more carriers are preparing to decommission their older networks as more subscribers continue to upgrade more quickly to new devices," said Shara Slattery, PwC partner and managing editor of the report. "Pressured to make the most of existing spectrum, network operators and equipment vendors are considering new approaches to network deployment including focusing on small cells and finding better ways to make valuable legacy assets be available for reuse."

Related Stories

Share

  • email story Email
  • print story Print
  • digit digit
  • facebook facebook
  • Twitter Twitter
  • Linked-in Linked-In
  • Comments (0)

COMMENTS

Add Comment
No comments yet. Be the first to add a comment!
MARKET PLACE

    BYOD: Market Analysis and Forecasts

    An in-depth insight into the rise of BYOD policies within the enterprise and analysis of the impact the trend will have on IT departments,...

    Voice Command, Control and Search on Mobile Phones: Market Analysis & Forecasts

    This report provides a comprehensive insight into the growing importance of voice command, control and search on handsets, analysing...

    Data Centre Network Equipment: Market Analysis and Forecasts

    This report provides a global assessment of the data centre network equipment market. Besides assessing the key market trends, sub-markets...

    HetNet Market Summary & Forecasts: Macro Cells, Small Cells & Wi-Fi Offload

    Carriers are struggling to cope with the explosion of data traffic on their networks, and the additional deployment of LTE and legacy...

    Over-the-Top Communications: Threats & Opportunities for Mobile Operators

    This report examines the implications of widespread adoption of mobile over-the-top IP communications for mobile operators, handset...

    Portable Gaming Consoles: Market Analysis and Forecasts

    This report provides a global assessment of the PGC market. In addition to assessing the key market drivers, market barriers, vendor...
WHITE PAPERS

    Satellite Phones: Will Dual Mode Help the Phoenix Rise from the Ashes?

    Satellite phones have followed an arduous path since their much-hyped launch more than a decade ago. The hype was followed by an e...

    Mobile Widget Platform Market Analysis: Understanding the Business Case and ROI

    This white paper presents an analysis of the mobile widget platform market, as well as metrics supporting a mobile carrier?s busin...

POST COMMENT

You must be a registered user to post a comment. or
Username *
Email *
Comment *