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Mobile Phone Service - US - July 2011

This report builds on the analysis presented in Mintel's Mobile Phone Services—U.S., July 2010. It discusses both voice and data services, including texting, email, and web access and other nonvoice services provided by wireless service providers. While content-only services such as app and downloads are discussed where applicable, revenues from these sales are not included in market size and segmentation data.

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Table of contents

  1. Scope and Themes

    • What you need to know
      • Definition
        • Data sources
          • Sales data
            • Consumer survey data
              • Advertising creative
                • Abbreviations and terms
                  • Abbreviations
                    • Terms
                    • Executive Summary

                      • A mature industry continues to grow
                        • Revenue share for voice in rapid decline
                          • No-contract plans making gains
                            • VOIP, mobile broadband becoming competitive
                              • A changing landscape lies ahead
                                • High levels of consolidation favor larger players
                                  • Teens, seniors, under-$25Ks last frontiers for phone penetration
                                    • Family plans continue to dominate
                                      • Unlimited voice uncommon, unlimited data common
                                        • Carrier tenure remains high; coverage a key factor
                                          • Teen girls, Asians, highly engaged
                                          • Insights and Opportunities

                                            • Keeping a hand on the throttle
                                              • MVNOs: Back to the future?
                                              • Inspire Insights

                                                  • Inspire Trend: “Totophobia”
                                                  • Market Size and Forecast

                                                    • Key points
                                                      • Slow growth in a mature market
                                                        • Data supplies growth
                                                          • Sales and forecast, mobile phone services
                                                            • Figure 1: Total U.S. sales and forecast for mobile phone services, at current prices, 2006-16
                                                            • Figure 2: Total U.S. sales and forecast for mobile phone services, at inflation-adjusted prices, 2006-16
                                                          • Cell phone connections and monthly bills
                                                            • Figure 3: U.S. cell phone connections, 2005-10
                                                            • Figure 4: Average U.S. local mobile phone bill*, at current prices, 2005-10
                                                            • Figure 5: Average U.S. local mobile phone bill, at inflation-adjusted prices, 2005-10
                                                          • Fan-chart forecast
                                                              • Figure 6: Total revenues and fan chart forecast of mobile phone services, at current prices, 2006-16
                                                          • Competitive Context

                                                            • Key points
                                                              • Landlines continue to fade
                                                                • Figure 7: U.S. landline and cell phone ownership, 2006-09
                                                              • VOIP goes mobile
                                                                • Mobile broadband from cable companies
                                                                  • ISVs, content providers, grab app and ad money
                                                                  • Segment Performance

                                                                    • Key points
                                                                      • Data will drive the future, but voice remains in the lead
                                                                        • Figure 8: U.S. mobile phone services sales, voice vs. data, at current prices, 2009 and 2011
                                                                        • Figure 9: Average monthly voice minutes and texts per subscriber, 2007-10
                                                                    • Segment Performance—Voice

                                                                      • Key points
                                                                        • Voice hits a plateau
                                                                          • Figure 10: U.S. sales of voice services, at current prices, 2006-16
                                                                          • Figure 11: U.S. sales of voice services, at inflation-adjusted prices, 2006-11
                                                                      • Segment Performance—Data

                                                                        • Key points
                                                                          • Data goes wide
                                                                            • The future is limited
                                                                              • Figure 12: U.S. sales of data and other services, at current prices, 2006-16
                                                                              • Figure 13: U.S. sales of mobile data services, at inflation-adjusted prices, 2006-16
                                                                          • Segment Performance—No-Contract Plans

                                                                            • Key points
                                                                              • Good plans, bad credit
                                                                                • Figure 14: U.S. mobile phone services sales at current prices, contract vs. no-contract, 2008 and 2010
                                                                                • Figure 15: U.S. sales of no contract mobile phone service plans, at current prices, 2007-11
                                                                            • Retail Channels

                                                                              • Key points
                                                                                • Available at every store very near you
                                                                                  • Figure 16: Number of U.S. stores run by mobile phone service providers, 1Q2011
                                                                                • AT&T/T-Mobile merger likely to cause retail consolidation
                                                                                  • Online provides info, aims for sales
                                                                                  • Market Drivers

                                                                                    • Key points
                                                                                      • A major merger could reshape the landscape
                                                                                        • The thirst for data grows
                                                                                          • Will 4G answer the call?
                                                                                            • Figure 17: 4G technologies and download speeds for major U.S. carriers, 2011
                                                                                          • Phone platforms jockey for position
                                                                                            • Figure 18: Smartphone operating system market share, 2011
                                                                                          • Can tablets provide the cure?
                                                                                            • Recession and slow recovery puts prepaid in the spotlight
                                                                                            • Leading Companies

                                                                                              • Key points
                                                                                                • Consolidation continues
                                                                                                  • Figure 19: U.S. mobile phone brand penetration, 2006-10
                                                                                                • Company overview
                                                                                                  • Figure 20: Revenues and profit margins of leading U.S. wireless carriers, 2009 and 2010
                                                                                                  • Figure 21: Subscriptions and churn of leading U.S. wireless carriers, 2009 and 2010
                                                                                                • AT&T
                                                                                                  • MetroPCS
                                                                                                    • Sprint
                                                                                                      • T-Mobile
                                                                                                        • Verizon
                                                                                                        • Innovation and Innovators

                                                                                                          • Fring
                                                                                                            • U.S. Cellular
                                                                                                            • Marketing Strategies

                                                                                                              • Key points
                                                                                                                • Overview
                                                                                                                  • Television
                                                                                                                    • AT&T tries out humor
                                                                                                                      • Figure 22: AT&T ad: Don’t be left behind, 2010
                                                                                                                    • Sprint goes viral to emphasize unlimited
                                                                                                                      • Figure 23: Sprint ad: Veatrice Henson, 2011
                                                                                                                    • Verizon emphasizes benefits
                                                                                                                      • Figure 24: Verizon ad: Rule the air, 2011
                                                                                                                    • Virgin Mobile appeals to youth
                                                                                                                      • Figure 25: Virgin Mobile ad: Sparah, 2011
                                                                                                                    • Online advertising
                                                                                                                      • Verizon uses web to launch iPhone
                                                                                                                        • Sprint taps power of viral
                                                                                                                          • U.S. Cellular hopes to make customers believe
                                                                                                                            • Virgin Mobile goes social with Sparah
                                                                                                                              • Print
                                                                                                                                • Figure 26: Sprint and T-Mobile print ads, 2011
                                                                                                                            • Ownership and Spend

                                                                                                                              • Key points
                                                                                                                                • Almost all adults own mobile phones
                                                                                                                                  • Figure 27: Trended ownership of mobile phones, 2002-10
                                                                                                                                  • Figure 28: Mobile phone ownership, by age and household income, April 2010-December 2010
                                                                                                                                • Younger and affluent consumers move to smartphones
                                                                                                                                  • Multiple phone ownership
                                                                                                                                    • Figure 29: Smartphone ownership, by gender, age and household income, may 2011
                                                                                                                                  • Bill size aligns with smartphone ownership
                                                                                                                                    • Figure 30: Average monthly mobile phone bill, by age and household income, April 2010-December 2010
                                                                                                                                • Type of Plan

                                                                                                                                  • Key points
                                                                                                                                    • Contract plans still prevail
                                                                                                                                      • Figure 31: Prepaid vs. postpaid vs. no contract, by age and household income, April 2010-December 2010
                                                                                                                                    • Family plans have broad appeal
                                                                                                                                      • Figure 32: Family vs. individual vs. business plan, by age and household income, April2010-December 2010
                                                                                                                                    • Unlimited plans still in the minority
                                                                                                                                      • Figure 33: Service plan features, by household income, May 2011
                                                                                                                                    • More than half of data subscribers are unlimited
                                                                                                                                      • Figure 34: Data plan type, limited or unlimited, by gender and age, May 2011
                                                                                                                                    • Unlimited texting popular with the young
                                                                                                                                      • Figure 35: Mobile plan features, by age, May 2011
                                                                                                                                  • The Purchase Decision

                                                                                                                                    • Key points
                                                                                                                                      • Coverage drives selection
                                                                                                                                        • Figure 36: Top factors in carrier selection, May 2011
                                                                                                                                        • Figure 37: Top factors in carrier selection, by age, May 2011
                                                                                                                                        • Figure 38: Top factors in carrier selection, by household income, May 2011
                                                                                                                                      • One in four 18-24s do not choose their own plan
                                                                                                                                        • Figure 39: Plan chosen by someone else, by gender and age, May 2011
                                                                                                                                      • Users remain fairly loyal to carriers
                                                                                                                                        • Figure 40: Intent to switch phone carriers, May 2011
                                                                                                                                      • Price drives switches
                                                                                                                                        • Figure 41: Reasons for switching carriers, by gender, May 2011
                                                                                                                                        • Figure 42: Reasons for willingness to switch phone carriers, by household income, May 2011
                                                                                                                                    • Voice, Text, and Data Features

                                                                                                                                      • Key points
                                                                                                                                        • Basic calling still a common model
                                                                                                                                          • Figure 43: Phone use for calling or emergency only, by age and household income, April 2010-December 2010
                                                                                                                                        • Texting a favorite for the young
                                                                                                                                          • Figure 44: Top communication features, April 2010-December 2010
                                                                                                                                          • Figure 45: Communication feature usage, by age, April 2010-December 2010
                                                                                                                                        • Photography most common content feature used
                                                                                                                                          • Figure 46: Top content features, April 2010-December 2010
                                                                                                                                          • Figure 47: Top content features, by age, April 2010-December 2010
                                                                                                                                          • Figure 48: Top content features, by household income, April 2010-December 2010
                                                                                                                                        • Apps reach mainstream but ISP, hotspot usage still novel
                                                                                                                                          • Figure 49: Advanced feature usage, by age, May 2010
                                                                                                                                          • Figure 50: Advanced feature usage, by household income, May 2010
                                                                                                                                      • Attitudes and Motivations

                                                                                                                                        • Key points
                                                                                                                                          • Fostering connections
                                                                                                                                            • Figure 51: Attitudes about cell phones, April 2010-December 2010
                                                                                                                                          • Plans more important than new technology
                                                                                                                                            • Figure 52: Attitudes to carrier loyalty, April 2010-December 2010
                                                                                                                                          • Just saying no to ads
                                                                                                                                            • Figure 53: Attitudes to advertisements on cell phones, April 201-December 2010
                                                                                                                                          • Under-25s a world apart
                                                                                                                                            • Figure 54: Attitudes to cell phones, by age, April 2010 - December 2010
                                                                                                                                        • Teens

                                                                                                                                          • Key points
                                                                                                                                            • Teen penetration carries room for growth
                                                                                                                                              • Figure 55: Ownership of cell phones, teens by gender/age and race/Hispanic origin, October 2009-December 2010
                                                                                                                                            • Sprint leads among teens due to phone offerings and features
                                                                                                                                              • Figure 56: Cell phone service provider, teens by gender/age, October 2009-December 2010
                                                                                                                                            • Moving more teens to family plans
                                                                                                                                              • Figure 57: Type of plan, teens by gender/age, October 2009-December 2010
                                                                                                                                            • Teen girls devour data
                                                                                                                                              • Figure 58: Cell phone feature usage by teens, by gender/age, October 2009-December 2010
                                                                                                                                            • Teen attitudes and motivations
                                                                                                                                              • Figure 59: Teen attitudes about cell phones, by gender/age, October 2009-December 2010
                                                                                                                                          • Kids

                                                                                                                                            • Key points
                                                                                                                                              • Room for expansion in children’s market
                                                                                                                                                • Figure 60: Cell phone ownership, kids by gender/age and race/Hispanic origin, October 2009-December 2010
                                                                                                                                              • Kids with phones behave largely like teens with phones
                                                                                                                                                • Figure 61: Cell phone feature usage, kids by gender/age, October 2009-December 2010
                                                                                                                                            • Brand Preference

                                                                                                                                              • Key points
                                                                                                                                                • Carriers maintain market share stability
                                                                                                                                                  • Figure 62: Cell phone service provider, 2006-10
                                                                                                                                                • Prepaid strong on the low end, Verizon on the high end
                                                                                                                                                  • Figure 63: Consumers’ cell service provider, by household income, April 2010-December 2010
                                                                                                                                                • Average tenure with current carrier exceeds three years
                                                                                                                                                  • Figure 64: Average years with current provider, by age and household income, April 2010-December 2010
                                                                                                                                              • Impact of Race/Hispanic Origin

                                                                                                                                                • Key points
                                                                                                                                                  • Minority consumers spend more on phones, but the same on plans
                                                                                                                                                    • Figure 65: Phone ownership, by race and Hispanic origin, May 2011
                                                                                                                                                    • Figure 66: Mean phone purchase price, by race and Hispanic origin, April 2010-December 2010
                                                                                                                                                    • Figure 67: Size of phone bill, by race and Hispanic origin, April 2010-December 2010
                                                                                                                                                    • Figure 68: Phone plan type, by race and Hispanic origin, April 2010-December 2010
                                                                                                                                                  • Asians want data; Hispanics want text; Whites use more services
                                                                                                                                                    • Figure 69: Phone services, by race and Hispanic origin, April 2010-December 2010
                                                                                                                                                  • T-Mobile and Sprint succeed with minorities
                                                                                                                                                    • Figure 70: Cell phone service provider, by race and Hispanic origin, April 2010-December 2010
                                                                                                                                                  • Asians realize phone potential and are high-value customers
                                                                                                                                                    • Figure 71: Attitudes about cell phones, by race and Hispanic origin, April 2010-December 2010
                                                                                                                                                • Cluster Analysis

                                                                                                                                                    • Penny Pinchers
                                                                                                                                                      • Demographics
                                                                                                                                                        • Characteristics
                                                                                                                                                          • Opportunities
                                                                                                                                                            • Data Munchers
                                                                                                                                                              • Demographics
                                                                                                                                                                • Characteristics
                                                                                                                                                                  • Opportunities
                                                                                                                                                                    • Family Loyalists
                                                                                                                                                                      • Demographics
                                                                                                                                                                        • Characteristics
                                                                                                                                                                          • Opportunities
                                                                                                                                                                            • Cluster characteristic tables
                                                                                                                                                                              • Figure 72: Mobile phone service clusters, May 2011
                                                                                                                                                                              • Figure 73: Type of plan, by mobile phone service clusters, May 2011
                                                                                                                                                                              • Figure 74: Phone and plan attributes, by mobile phone service clusters, May 2011
                                                                                                                                                                              • Figure 75: Top factors in carrier selection, by mobile phone service clusters, May 2011
                                                                                                                                                                              • Figure 76: Interest in changing carriers, by mobile phone service clusters, May 2011
                                                                                                                                                                            • Cluster demographic tables
                                                                                                                                                                              • Figure 77: Mobile phone service clusters, by gender, May 2011
                                                                                                                                                                              • Figure 78: Mobile phone service clusters, by age, May 2011
                                                                                                                                                                              • Figure 79: Mobile phone service clusters, by household income, May 2011
                                                                                                                                                                              • Figure 80: Mobile phone service clusters, by race, May 2011
                                                                                                                                                                              • Figure 81: Mobile phone service clusters, by Hispanic origin, May 2011
                                                                                                                                                                            • Cluster methodology
                                                                                                                                                                            • Custom Consumer Groups—Responses by Provider

                                                                                                                                                                              • Marketing talking points hit home
                                                                                                                                                                                  • Figure 82: Top factors in carrier selection, by brand of service provider, May 2011
                                                                                                                                                                                  • Figure 83: Phone data usage attributes, by brand of service provider, May 2011
                                                                                                                                                                              • Appendix—Trade Associations

                                                                                                                                                                                Companies Covered

                                                                                                                                                                                • ALLTEL Corporation
                                                                                                                                                                                • Bally Total Fitness Holding Corporation
                                                                                                                                                                                • CDMA Development Group (CDG)
                                                                                                                                                                                • Cellular Telecommunications and Internet Association (CTIA)
                                                                                                                                                                                • Clearwire Corporation
                                                                                                                                                                                • Deutsche Telekom AG
                                                                                                                                                                                • Enterprise Wireless Alliance (EWA)
                                                                                                                                                                                • ESPN, Inc.
                                                                                                                                                                                • Global Wireless Education Consortium (GWEC)
                                                                                                                                                                                • Hewlett-Packard Company
                                                                                                                                                                                • HTC
                                                                                                                                                                                • LG Electronics Inc (USA)
                                                                                                                                                                                • MetroPCS Communications, Inc.
                                                                                                                                                                                • Nextel Communications Inc.
                                                                                                                                                                                • Nokia Corporation (US)
                                                                                                                                                                                • Research In Motion Limited
                                                                                                                                                                                • Rural Cellular Association (RCA)
                                                                                                                                                                                • Samsung Electronics (USA)
                                                                                                                                                                                • Sprint Nextel Corporation
                                                                                                                                                                                • T-Mobile International AG
                                                                                                                                                                                • Telecommunications Industry Association (TIA)
                                                                                                                                                                                • TracFone Wireless, Inc.
                                                                                                                                                                                • Verizon Wireless (Cellco)
                                                                                                                                                                                • Virgin Mobile
                                                                                                                                                                                • YouTube, Inc.

                                                                                                                                                                                Mobile Phone Service - US - July 2011

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