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Mobile Network Providers - US - February 2016

"What with most adults already being cellular service subscribers, there is little to no opportunity to increase the number of subscriber lines, outside of nominal additions related to overall population growth. Simultaneously, the amount consumers have typically paid per month for service has shown little increase in the 21st century in total, and when inflation is taken into consideration, monthly spend has actually fallen."
- Billy Hulkower, Senior Technology Analyst

This report discusses the following key topics:

  • Near universal penetration leaves little room for subscriber growth
  • Majority satisfied, not interested in switching
  • WiFi, sponsored data to keep data plans in check

In an effort to leverage that infrastructure, carriers are transitioning the costs of mobile video consumption off the backs of consumers and onto the expense sheets of video distributors and advertisers. The brilliance of this choice lies in the incentivization it creates for mobile entertainment aficionados to base their carrier selection on network speeds, rather than price points.

Inside of the framework of these rapid shifts, Mintel analyzes the industry from the perspective of industry expertise in assessing the competitive advantages and disadvantages between carriers, as well as from the perspective of the subscriber, with both quantitative and qualitative research that explores carrier selection, carrier satisfaction, interest in changing carriers, and attitudes to mobile data services.

Mintel defines the mobile network provider market to include payments to telecommunications carriers for wireless service. Mobile voice and data communication among adults aged 18+ is the focus of the report.

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Table of contents

  1. Overview

    • What you need to know
      • Definition
      • Executive Summary

        • The issues
          • Near universal penetration leaves little room for subscriber growth
            • Figure 1: Cell phone ownership among adults and teens, April 2010-September 2015*
          • Majority satisfied, not interested in switching
            • Figure 2: Intent to change carrier in next year and incidence of changing carrier in past year, December 2015
            • Figure 3: Reasons not to switch carriers, December 2015
          • WiFi, sponsored data to keep data plans in check
            • Figure 4: Use of phones via WiFi networks at home and out-of-home, December 2015
          • The opportunities
            • Half of switchers seeking better service
              • Figure 5: Reasons for wanting to switch service, December 2015
            • Ads, sponsored data open new revenue streams in mobile video
              • Figure 6: Daily use of video on mobile phones by type of content, December 2015
            • Tethering has potential to increase demand for data
              • Figure 7: Use of phones as mobile hotspot, December 2015
            • What it means
            • The Market – What You Need to Know

              • Sales stall 2012-15
                • ARPU in long-term decline
                  • Connected devices route to volume growth
                    • New challenges in WiFi, cap-free video
                    • Market Size

                      • Growth a challenge in mature market
                        • Figure 8: Monthly ARPU, 2000-14
                      • Perks in connected devices
                        • Figure 9: Number of laptops and tablets subscribed to mobile service, 2010-15
                      • ARPU unlikely to rise in heated competition between carriers
                        • Figure 10: Total US wireless service revenues and forecast, at current prices, 2010-18
                      • Industry on firmer footing when equipment sales are considered
                        • Figure 11: Total US wireless service and equipment sales, 2012-14
                    • Market Perspective

                      • At 95% of adults, adoption nearly complete
                        • Figure 12: Cell phone ownership among adults and teens, April 2010-September 2015*
                      • Impact of forced upgrade to tiered plans has lingering impact on pricing
                        • Figure 13: Average monthly spend on mobile phone service, 2011-15
                      • WiFi usage weighing down need for data
                          • Figure 14: Frequency of use of phones via WiFi networks at home and out-of-home, December 2015
                        • Public and private WiFi swelling
                          • Figure 15: Cablevision Freewheel direct marketing, September 2015
                        • WiFi First adds competition, changes billing structure
                          • Mobile video moves out of data caps
                          • Market Factors

                            • Smartphones headed toward universal penetration
                              • Figure 16: Ownership of phones, tablets, and computers, August 2015
                            • Connected devices, tethering increase data consumption
                              • Figure 17: Use of mobile phone as wireless hotspot, December 2015
                            • Mobile video revenue cutting in three directions
                              • Figure 18: Frequency of viewing video on mobile devices, by type of video, December 2015
                          • Key Players – What You Need to Know

                            • Verizon and AT&T retain leadership in face of T-Mobile gains
                              • Three brands carry interest from a quarter of switchers
                                • New launches in mobile video
                                  • 5G arriving sooner than expected
                                  • What’s Working?

                                    • Premium tier retains lead
                                      • T-Mobile coming on strong
                                        • Figure 19: Market share of wireless brands, by household income, December 2015
                                      • Installment/upgrade programs drive equipment revenue higher
                                          • Figure 20: Wireless carrier equipment sale revenues, 2012-14
                                          • Figure 21: Use of connected devices and early upgrade programs, by carrier, December 2015
                                          • Figure 22: T-Mobile Jump On Demand online ad, December 2015
                                      • What’s Struggling?

                                        • Sprint lags in consideration
                                          • T-Mobile pulling consideration from Sprint’s potential customers
                                            • MVNOs not top-of-mind
                                              • Figure 23: Providers under consideration as next carrier, December 2015
                                          • What’s Next?

                                            • Streaming entertainment exiting data restrictions
                                              • T-Mobile Binge On provides cap-exempt mobile video
                                                • Verizon’s Go90 open to all, exclusive for some
                                                  • AT&T to deliver new mobile video service in 2016
                                                    • Hotspot access
                                                      • Verizon launching 5G in 2017
                                                      • The Consumer – What You Need to Know

                                                        • Healthy adoption of connected device, early upgrade plans
                                                          • Interest in changing service limited to a select few
                                                            • Half of switchers looking for better network, better service
                                                              • Majority satisfied with carrier, vast majority with internet service
                                                              • Growth Areas – Connected Devices and Early Upgrades

                                                                • Connected devices, early upgrade plans show mainstream adoption
                                                                  • Figure 24: Use of connected devices and early upgrade programs, December 2015
                                                                • Switchers more devoted to connected devices, upgrades
                                                                  • Figure 25: Use of connected devices and early upgrade programs, by interest in switching providers, December 2015
                                                                • Age, combined with income, drives adoption
                                                                  • Figure 26: Use of connected devices and early upgrade programs, by age and income, December 2015
                                                                • Hispanics top users for connected devices and early upgrade plans
                                                                  • Figure 27: Use of connected devices and early upgrade programs, by race and Hispanic origin, December 2015
                                                                • Urban lifestyle lends to adoption
                                                                  • Figure 28: Use of connected devices and early upgrade programs, by area, December 2015
                                                              • Interest in Switching Carriers

                                                                • Focusing on the few who matter
                                                                  • Figure 29: Intent to change carrier, December 2015
                                                                • Younger age groups more likely to switch
                                                                  • Figure 30: Intent to change carrier, by age, December 2015
                                                                • Connected device users more interested in switching
                                                                  • Figure 31: Intent to change carrier, by use of connected devices and dissatisfaction with internet service, December 2015
                                                                • Hispanics carry elevated intention to change carriers
                                                                  • Figure 32: Intent to change carrier, by race and Hispanic origin, December 2015
                                                                • Parents top demos for switching
                                                                  • Figure 33: Intent to change carrier, by children in household, December 2015
                                                              • Reasons for Switching Carriers

                                                                • Half switching to save money
                                                                  • Half switching for better service
                                                                    • Figure 34: Reasons for wanting to switch service, December 2015
                                                                • Reasons for Staying with Current Carrier

                                                                  • Majority anchored by satisfaction
                                                                    • Figure 35: Reasons for not wanting to change carrier, December 2015
                                                                  • Internet speeds sufficient for majority of smartphone owners
                                                                      • Figure 36: Satisfaction with current internet speeds among smartphone owners, December 2015
                                                                    • Younger age groups more likely to feel pushed into cheaper carriers
                                                                      • Figure 37: Reasons for not wanting to change carrier, by age, December 2015
                                                                    • Lower-income groups buy what they can afford
                                                                      • Figure 38: Reasons for not wanting to change carrier, by household income, December 2015
                                                                    • More Hispanics and Blacks feel constrained by price points
                                                                      • Figure 39: Reasons for not wanting to change carrier, by race/Hispanic origin, December 2015
                                                                  • Consumption of Mobile Video Content

                                                                    • One in four streams video daily
                                                                      • Figure 40: Daily use of video on mobile phones by type of content, December 2015
                                                                    • Young men top target for mobile video services
                                                                      • Figure 41: Daily use of video on mobile phones, by gender and age, December 2015
                                                                    • Urbanites more likely to be daily streamers
                                                                      • Figure 42: Daily use of video on mobile phones, by area, December 2015
                                                                    • Blacks a top audience for mobile video
                                                                      • Figure 43: Daily use of video on mobile phones, by race/Hispanic origin, December 2015
                                                                  • Appendix – Data Sources and Abbreviations

                                                                    • Data sources
                                                                      • Sales data
                                                                        • Consumer survey data
                                                                          • Consumer qualitative research
                                                                            • Abbreviations and terms
                                                                              • Abbreviations
                                                                                • Terms
                                                                                • Appendix – Additional Consumer Data

                                                                                    • Figure 44: Use of connected devices and early upgrade programs, by age and gender, December 2015
                                                                                    • Figure 45: Daily use of video on mobile phones, by carrier, December 2015
                                                                                    • Figure 46: Daily use of video on mobile phones, by number of devices on plan, December 2015

                                                                                Companies Covered

                                                                                To learn more about the companies covered in this report please contact us.

                                                                                Mobile Network Providers - US - February 2016

                                                                                £3,277.28 (Excl.Tax)