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3Q10 United States Mobile Operator Forecast, 2010 – 2014: US to have 365.4 million mobile subscriber connections in 2014 with AT&T taking 34.8% market share

3Q10 United States Mobile Operator Forecast, 2010  2014: US to have 365.4 million mobile subscriber connections in 2014 with AT&T taking 34.8% market share

Market Study
Published: August 2010
Pages: 118
Research from: ie market research
Sector: Mobile

From: GBP 312.50
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IEMR’s Mobile Operator Forecast on the United States provides over 50 operational and financial metrics for the US wireless market and is one of the best forecasts in the industry. We provide five-year forecasts at the operator level going out to 2014. We also provide quarterly historical and forecast data starting in 1Q2003 and ending in 1Q2012. Operators covered for the United States include: Verizon Wireless (Joint venture of Verizon Communications Inc. and Vodafone Group Plc.), AT&T Mobility LLC, Sprint Nextel Corporation, and T-Mobile USA, Inc. Our Mobile Operator Forecasts are updated quarterly and are available for one-time delivery or through regular updates.

IEMR’s Global Mobile Operator Forecast covers 50 operational metrics of 200+ mobile operators in 50+ countries, making up 80% of the world’s population. Our forecasts are based on our proprietary, country-specific forecasting models. These models deploy multiple regression analysis and cross-impact matrices that estimate relationships between subscriber data, technology use and deployment data, overall economic and demographic changes expected in a particular country; and relate these to company operational and financial metrics.
Executive Summary

Stable subscriber growth continues in the US wireless market
+5.7% industry average subscriber growth in 1Q.2010

• The operator-wide average subscriber growth (YoY) was 5.7% in 1Q.2010, which is the same growth rate as in 1Q.2009.
• The largest operator, Verizon Wireless, saw its subscriber growth (YoY) decline from 8.9% in 1Q.2009 to 7.2% in 1Q.2010.
• Sprint-Nextel's subscriber growth continues to be negative. Its subscriber growth (YoY) was -2.1% in 1Q.2010, up from -7.0% in 1Q.2009.

ARPU growth continues to be negative
-1.3% industry average ARPU growth in 1Q.2010

• The industry average monthly ARPU was US$ 50 in 1Q.2010, down -1.3% YoY.
• Wireless carriers in the U.S. continue to lower their ARPUs. T-Mobile USA's monthly ARPU declined by -4.2% (YoY) to reach US$ 46 in 1Q.2010.

Minutes of Use per Subscriber are stabilizing
The industry average MOU/Sub remains at around 800 minutes per month

• The operator-wide average Minute of Use (MOU) per subscriber was 814 minutes per month in 1Q.2010, down -1.9% YoY.
• MOU/Sub at T-Mobile USA continues to be higher than MOU/Sub at Verizon Wireless and AT&T Mobility.

Positive EBITDA growth at both Verizon Wireless and AT&T Mobility in the latest quarter
+7.4% industry-average EBITDA growth in 1Q.2010

• The industry average EBITDA growth rate (YoY) in 1Q.2010 was 7.4%, up from 3.7% in 1Q.2009.
• EBITDA growth rate (YoY) at Verizon Wireless was 5.7% in 1Q.2010, down from 12.2% in 1Q.2009.
• On the other hand, AT&T Mobility's EBITDA growth was strong at 19.7% in 1Q.2010, up from 7.6% in 1Q.2009.

So what is IEMR’s Forecast?

Total wireless subscriber connections in the United States to reach 365.4 million in 2014

• We forecast that the number of total wireless subscriber connections in the U.S. will increase from 285.6 million in the end of 2009 to 365.4 million in the end of 2014.
• Given the latest quarter numbers, our model predicts that AT&T will have approximately 127 million mobile subscriber connections in 2014.
• On the other hand, we forecast that Verizon Wireless will have 118.7 million wireless subscriber connections and T-Mobile will have 35 million wireless subscriber connections in 2014.

Verizon Wireless and AT&T Mobility will see their subscriber market shares increase over the next five years

• Our forecasting model predicts that Verizon Wireless's market share will increase from 31.9% to 32.5% and AT&T Mobility's market share will increase from 29.8% to 34.8% over the forecast period, 2009 - 2014.
• In contrast, we expect that Sprint-Nextel's subscriber market share will continue to decline over the next five years to reach approximately 13% in 2014.

Industry average ARPU level in the United States will remain stable over the forecast period, 2009 - 2014

• We expect that the industry-average monthly ARPU level will remain in the range of $50 - $51 over the next five years.
• Given the latest data, our model forecasts that monthly ARPU levels will be about $50 at both Verizon and AT&T and about $45 at T-Mobile in 2014.

AT&T will be enjoying the highest level of profitability in the US wireless market in 2014

• Our model predicts that AT&T's EBITDA margin (calculated as EBITDA/service revenue) will improve from 39.6% in 2009 to 46% in 2014. This will be the highest level of profitability among wireless carriers.
• On the other hand, we think that T-Mobile USA's EBITDA margin will remain in the range of 33% - 34%.

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