Pyramid Research Predictions 2014
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Verizon Wireless intends to reach 100mn Americans with its LTE coverage by the end of 2010,announcing at a recent communications conference that 30 NFL cities (cities with NFL franchises) wouldbe connected to the 4G technology by the end of 2010. AT&T plans on launching its own commercialLTE network by mid-2011, a significant acceleration of its previous launch plans. Meanwhile, bothoperators along with T-Mobile USA, have been enhancing and augmenting their 3G networks withsoftware-based upgrades, meaning that faster data processing and transmission speeds have been rolledout very quickly and with no disruptions to the networks. T-Mobile USA, though, scored something of agoal by touting its HSPA upgrade (to HSPA+) as a 4G offering. Telecoms analysts andsmartphone/mobile computing users were quick to play down those claims. T-Mobile has not commentedpublicly on plans to launch LTE. MetroPCS, a small player in the market, launched its own 4G wirelessnetwork, along with an LTE-enabled handset manufactured by Samsung. The company’s first-moveradvantage in its LTE network, LTE handset, and competitive pricing (voice, text, and mobile internet forUS$55 per month) should not be underestimated. The extent to which the company’s size will constrainits potential, however, remains to be seen.
Sprint Nextel was able to reverse a long-term trend of losing subscribers with significant increases inwholesale and prepaid customers, due to newly acquired MVNO Virgin Mobile and Common CentsMobile, a flat-rate prepaid service available in about 700 Walmart stores. Higher-ARPU postpaidsubscribers continue to decline. However, the postpaid quarterly churn rate was below 2% for the firsttime in five years. Sprint remains committed to its WiMAX-based 4G network, which has expanded tomore markets. Sprint’s handsets have been popular, scoring a surprise hit with its EVO WiMAX handset,even against the backdrop of Apple/AT&T’s unveiling of a fourth generation iPhone. More recently,Sprint's dual 3G/4G phone, the Samsung Epic 4G, were launched in early September with one of the bestfirst-day sales of any Sprint device.
Sprint’s WiMAX partner, Clearwire, intimated that it would be interested in migrating to LTE once itsexclusivity with WiMAX developer Intel comes to an end. Were Sprint to replace its WiMAX plant withLTE, this could be a costly move; instead, it is possible that a Sprint/Clearwire LTE platform wouldoperate alongside WiMAX. Nevertheless, the WiMAX business posted a strong 94% y-o-y increase incustomers in Q110.
Broadband take-up continues to grow robustly, although our forecasts have been reined in slightly. Thegrowth has been led by the larger fixed-line telecoms operators and the multiservice cable operators.There were 77.9mn broadband subscribers by the end of 2009, a figure that grew to more than 79.5mn byJune 2010. AT&T and Comcast continue battling to lead the market, and Comcast overtook AT&T inQ309. The gap has consistently widened in the nine months that have followed. We now expect there willbe 98.0mn total broadband subscribers in the US by 2014, with a penetration rate of more than 30%.