I thought well T-Mobile has been improving since all the changes they have made but are they doing that well? I have not really heard much from AT&T and Sprint there are talks of a possible merger with T-Mobile. Fact is that Verizon still has more customers than say T-Mobile despite their rise and are only nibbling at Verizon’s feet. What I found is alot of data that suggests a continued decline in Verizon with a continued and gradual increase in other companies like T-Mobile. I will literally quote Walter Piecyk from BTIG Research:
Verizon’s Q2 results were marred by weak ARPU, which could have been a result of losing high-end customers to unlimited rate plans of competitors. We noted this while cutting our wireless EBITDA estimate by $2.0 billion less than a month ago. (Link) Since that time, T-Mobile has offered tax-free rate plans and Sprint cut rates on its Unlimited Freedom plan. The downward EBITDA revisions also happened after Verizon eliminated the option for consumers to purchase phones on subsidized rate plans, a move that we think generated a $1.5 billion non-cash benefit to reported EBITDA, the metric that our peers use for valuation. The bottom line is that it appears that Verizon’s perceived network advantage is no longer strong enough to keep its best customers on unattractive rate plans and it was forced to respond. We look forward to getting updated from T-Mobile on how porting ratios fared when they report Q4 tomorrow.
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