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AT&T and Verizon are about to put the squeeze on subscribers


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#1 +V-Tech

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Posted 21 June 2013 - 15:19

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Noted mobile analyst Chetan Sharma has released his latest U.S. Wireless Market Update. It’s a grim road map to rising smartphone ownership costs for most Americans. AT&T and Verizon Wireless now hold 65% of the U.S. mobile subscribers. Since 2009, Verizon has added about 15 million new contract subscribers, while AT&T gained about 8 million. Sprint and T-Mobile have lost roughly 5 million contract subscribers each over the same period. This is why you will wake up one beautiful morning next autumn and discover yet another new surcharge or rate hike by the Big Two — their power continues to wax.

 

One trend illustrated by Sharma is strikingly ominous: the revenue American operators derive from new subscribers has dropped to just 2% of their overall sales. In the year 2000, it was still over 20%. This means that there is no sales growth to be had from chasing new customers; all the upside is now in squeezing more money from existing subscribers. The new family plans pushed so hard by leading carriers effectively lock in entire households for good. Once you have two to four people on one family plan, switching carriers becomes prohibitively cumbersome.

 

Smartphone ownership in America has now topped 85%, soaring far above the global average of 50%.

So AT&T and Verizon have increased their market share decisively since 2009; they no longer get meaningful revenue from new subscribers, so they don’t need to offer attractive new price plans; they no longer can increase sales by pulling feature phone buyers into smartphones; and they are successfully locking people into near-permanent family plans.

 

The only road to revenue growth is now increasing the monthly bills of existing smartphone subscribers. That’s you and me.

 

 

 

http://bgr.com/2013/...-fees-analysis/




#2 Growled

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Posted 21 June 2013 - 15:22


 This means that there is no sales growth to be had from chasing new customers; all the upside is now in squeezing more money from existing subscribers.

 

Believe you me, they sure know how to do that. Who said you couldn't get blood out of a turnip? 



#3 B0mberman

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Posted 21 June 2013 - 15:23

you shall become a slave to the technology, to your own creation; and ultimately to yourself...



#4 M_Lyons10

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Posted 21 June 2013 - 15:24

This was very well put.



#5 ILikeTobacco

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Posted 21 June 2013 - 15:31

This was very well put.

Except for this part:

"The only road to revenue growth is now increasing the monthly bills of existing smartphone subscribers. That’s you and me."

 

That is just fear monguring at its best and a lie. They can sell their customer information and data to advertisers as an easy example. That also ignores the fact that revenue is not the important number. Profit margin is. If they lower their costs, their profit margin goes up and they are making more money. The person who wrote this has no grasp on the business world and is just trying to scare people away from these providers with no proof or facts to back up the claims.



#6 Geoffrey B.

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Posted 21 June 2013 - 15:32

If it weren't for getting a stipend from my workplace of $90 a month to pay for my cell phone, there is no way that i could afford a smart phone.



#7 Xenomorph

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Posted 21 June 2013 - 15:36

How is a Family plan near-permanent??

 

I have an AT&T Family Plan. Shared-data, family plan!

 

I will be moving every single line over to T-Mobile. Family plans don't lock you into longer contracts.



#8 fusi0n

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Posted 21 June 2013 - 15:36

if they squeeze me too tight.. i'll run to T-Mo



#9 ViperAFK

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Posted 21 June 2013 - 15:37

I've switched to using: https://ting.com/ recently. Unfortunately they use sprint's network which is kind of crappy, but it does have free voice roaming on verizon's network so I have no problems with voice coverage, and I don't use 3g data much anyway (in most cases I will have access to wifi). Their pricing model is really great for people with low-moderate needs and I'd love to see bigger providers offer pricing like this, they only charge you for what you use, so if you use under the plan you selected then you only pay for the plan that you actually ended up using, and if you use over they just bump you to the next plan, I generally only pay ~15 dollars a month. And its all monthly, no contracts which is nice.