The price of this market report covers 4 quarterly reports on this sector. This quarterly report will be downloadable instantly as a PDF document, with the 3 remaining reports delivered at regular intervals throughout the year.
The mobile market continued to grow in Q411, reaching 322.49mn subscribers. Most of the gains were in the postpaid sector. The number of smartphones sold by the largest operators skyrocketed, as customers flocked to purchase the iPhone 4S, which was released in October. AT&T recorded 7.6mn iPhone activations in the quarter and Verizon 4.2mn. Further, LTE roll-out gained pace and Verizon reported 2.3mn LTE-enabled smartphone sales. The trend for LTE devices is one we see continuing, as network development continues to gain pace.
Despite strong performance this quarter, Verizon is facing challenges. Following T-Mobile's appeal to the FCC to block its purchase of US$3.9bn of spectrum from Comcast Corp, Time Warner Cable and Bright House Networks, the Communication Workers of America (CWA) has requested specific conditions be enacted. T-Mobile claimed the deal concentrates too much of the country's available spectrum in the hands of one player and stated that smaller companies would utilise the spectrum 'more quickly, more intensively and more efficiently than Verizon Wireless', and would result in less LTE capacity overall and reduced competition in the provision of LTE. The statement is unsurprising, given T-Mobile's announcement on February 22 2012 that it will launch an LTE network in 2013.
T-Mobile's current spectrum allocation is insufficient to provide LTE, despite receiving some spectrum as part of the AT&T break-up deal. The company plans to invest US$1.4bn in network modernisation over 2012 and 2013, to secure subscribers. T-Mobile is the last US operator to commit to LTE. Sprint also faced setbacks to LTE roll-out. It terminated its 15-year contract with LightSquared after the US regulators blocked the latter's plans to build a wholesale LTE network. Following the termination of this contract, Sprint's path towards LTE looks increasingly uncertain. Already lagging far behind rivals in the LTE market, we believe that there are chances of recovery, although it will be an uphill struggle.
Following an investigation which found that LightSquared's LTE signals interferred with GPS devices, the FCC blocked its plans to launch the LTE network commercially. This was a severe blow for LightSquared and BMI believes the company will have little option, but to ultimately declare bankruptcy. This bodes well for Clearwire, however, which has seen increased interest from a number of mobile operators in recent months. For example in March LightSquared signed a five-year contract to provide LTE access and Sprint increased its financing for the company.
Clearwire has ample spectrum and there are no risks of the interference issues that have plagued LightSquared. BMI believes it will raise further interest from other operators, such as Metro PCS and US Cellular. The mobile market grew in line with expectations this quarter, while the fixed-line market declined at a faster rate. In the fixed broadband market, also, we saw declines, as mobile broadband becomes an increasingly attractive form of connectivity to the internet. We expect this pattern to continue as LTE becomes more widespread. We believe mobile penetration will hit 103.19% by 2016, and 68% of this market will be 3G or 4G subscriptions.
Click for Report details:United States Telecommunications Report Q2 2012