LightShed Partners research found despite investments of more than $200 billion in 5G networks by US operators, consumers have shown little interest in switching between service providers based solely on the technology.
In addition to failing to spur switching between operators, analysts Joe Galone and Walter Piecyk also noted 5G hasn’t been a motivating factor for subscribers to upgrade to higher-priced tariffs with their existing provider.
The analysts stated wireless consumers were struggling with the impact of inflation which in turn has created a difficult economic environment for T-Mobile US, AT&T and Verizon.
“We think that will challenge their ability to bolster their primary growth engine: post-paid phone revenue, thereby limiting overall industry growth to low single digits,” LightShed stated.
The analysts’ new estimates marginally increased T-Mobile’s five-year total service revenue growth from 2.8 per cent to 3 per cent compared with AT&T (1.9 per cent) and Verizon (0.8 per cent).
Wireless service revenue growth for T-Mobile was tipped at 3.3 per cent, AT&T 3 per cent and Verizon 1.8 per cent
“T-Mobile might be the fastest grower among their peers, but it’s marginally better and that growth is not fast”.
LightShed added while the wireless industry experienced a growth spurt in 2021 with the addition of 9 million new phone subscriptions across prepaid and post-paid, the trend isn’t expected to continue this year.
“We expect a reversion to normalised levels of 5.5 million subscriber net additions this year, dropping by more than a third.”
Compared with 3.3 per cent growth in 2021, the analysts predicted a 2 per cent gain this year and around 1 per cent in five years.
Post-paid, which represents 75 per cent of total service revenue, remained the primary driver for growth.
The analysts estimated that in 2022 post-paid phone revenue would kick in 260 basis points of the 3.4 per cent industry growth they forecast, with 220 basis points of an expected 3.2 per cent increase in 2023.
“Without post-paid phone revenue growth, these companies have major growth challenges”.
Instead of counting on 5G to boost revenue, LightShed argued US operators could generate additional sales from wireless home broadband and wholesale services, and IoT.Subscribe to our daily newsletter Back