The four quarter of 2017 was a good one for US mobile operators. AT&T, T-Mobile, Verizon and Sprint all gained total customers last quarter and all were profitable.
- AT&T gained 541,000 postpaid, 140,000 prepaid and 2.589 million connected device customers but lost 529,000 reseller (MVNO) customers for a total gain of 2.74 million domestic subscribers vs gains of 2.32 million in Q3 2017 and 1.55 million a year ago in Q4 2016.
- T-Mobile added 1.1 million postpaid, 149,000 prepaid customers, and 633,000 wholesale customers for a total gain of 1.85 million customers. That compares with gains of 1.33 million in Q3 2017 and 1.97 million in Q4 2016.
- Verizon added 1.17 million postpaid connections and lost 184,000 prepaid customers for a total gain of 990,000 vs gains of 742,000 in Q3 2017 and 582,000 in Q4 2016.
- Sprint reported adding 256,000 postpaid, 63,000 prepaid and 66,000 wholesale customers for a total gain of 385,000 customers vs gains of 378,000 in Q3 2017 and 594,000 million in Q4 2016.
Verizon, AT&T, T-Mobile and Sprint were all very profitable last quarter. The carriers credit their vastly improved profitability to the 2018 corporate tax cuts. Although the tax cuts don’t take effect until 2018, they somehow affect Q4, 2017 earnings. I don’t know why this is the case, maybe an accountant can explain it, I can’t.
- AT&T made $ 19.04 billion last quarter compared with $ 3.03 billion in Q3 2017 and $ 2.44 billion in Q2 2016.
- Verizon made a profit of $ 18.77 billion last quarter compared with $ 3.62 billion in Q3 2017 and $ 4.50 billion a year ago in Q4 2016.
- Sprint made $ 7.2 billion compared with a loss of $ 48 million in Q3 2017 and a loss of $ 479 million in Q4 2016.
- T-Mobile made $ 2.7 billion last quarter compared with $ 550 million in Q3 2017 and $ 390 million million in Q4 2016.
Here’s how the operators ranked by total subscribers at the end of the quarter:
- Verizon 145.3 million*
- AT&T 141.6 million
- T-Mobile 72.6 million
- Sprint 54.6 million
*Estimated. Verizon doesn’t report wholesale or connect device customer numbers. Verizon reported 116.3 million retail connections at the end of Q4, 2017. I estimate that Verizon has approximately 10,000 wholesale (MVNO) and 19,000 connected device (cars and IoT) customers for a total of 145.3 million total subscribers.
Postpaid phone customers are generally much more profitable than tablet, connected device, prepaid and wholesale customers. Industry watchers put a lot of emphasis on postpaid phone customer gains and loses. For the 15th consecutive quarter, T-Mobile lead the pack with the most postpaid phone additions.
- T-Mobile added 891,000 postpaid phone customers
- Sprint added 184,000
- Verizon added 431,000
- AT&T added 329,000
Prepaid and MVNO subscribers:
América Móvil’s Tracfone subsidiary lost 685,000 SafeLink subscribers last quarter but gained 74,00 customers with its other brands for a total loss of 611,000. That compares with a loss of 636,000 in Q3, 2017 and a loss of 417,00 in Q4, 2016.
América Móvil does not break out profit or loss by country, but its Q4, 2017 US EBITDA (earnings before interest, tax, depreciation and amortization) were $ 145 million, compared with $ 141 million in in Q3, 2017 and $ 219 million in Q4, 2016 . TracFone blamed the 26.4% EBDITA year over year decline on the SafeLink subscriber losses plus “aggressive competition in our segment, and a new blend of clients”.
On its worldwide operations América Móvil suffered a loss of 11.3 billion Mexican pesos ($ 61 million), which it blamed on damage to facilities and subscriber loss in Puerto Rico from hurricane Maria.
TracFone operates the Straight Talk, NET10, Tracfone, Simple Mobile, Page Plus, Total Wireless, Telcel America, Walmart Family Mobile, GoSmart and SafeLink Wireless MVNO brands in the US.
The number of branded prepaid customers fell by 443 thousand last quarter as a result of big subscriber losses at Verizon and Tracfone.
- AT&T added 140,000 prepaid subscribers.
- T-Mobile added 149,000
- Sprint added 63,000
- Verizon lost 184,000
- TracFone lost 611,000
Total branded prepaid customers by carrier as of the end of last quarter were:
- Tracfone 23.1 million
- T-Mobile 20.7 million
- AT&T 15.34 million
- Sprint 9.0 million
- Verizon 5.40 million
Wholesale (MVNO) customers reported by mobile operators increased by 170,000 last quarter:
Wholesale customers are mainly prepaid MVNO customers. Last quarter:
- T-Mobile gained 633,000 wholesale customers
- Sprint gained 66,000
- AT&T lost 529,000
- Verizon doesn’t report wholesale subscriber numbers.
Total Wholesale (MVNO) customers as of 12/31/17 are about 47 million, distributed as follows:
- T-Mobile 13.87 million
- Sprint 13.64 million
- Verizon 10 million est.
- AT&T 9.37 million
Half of those 47 million wholesale customers are with Tracfone, the other half are spread around 100 or so independent MVNOs.
There are approximately 97.44 million total prepaid (branded and MVNO) subscribers in the US as of 12/31/2017. That means prepaid customers account for 23.5% of the 414.1 million current big four mobile network lines of service.
In summary, All four national carriers gained customers last quarter and all were profitable. Once again the bulk of AT&T’s growth was in low revenue connected devices. TracFone lost customers again and its EBITDA declined year over year. In spite of MVNO loses at TracFone and AT&T NVNOs, the MVNO business seems surprisingly resilient, although I suspect most independent MVNO customers are on low margin plans costing between $ 5 and $ 30 a month.
Sources: AT&T, Sprint, T-Mobile, Verizon, América Móvil
First Quarter 2015 Prepaid Mobile Subscriber Numbers By Operator
Second Quarter 2015 Prepaid Mobile Subscriber Numbers By Operator
Third Quarter 2015 Prepaid Mobile Subscriber Numbers By Operator
Fourth Quarter 2015 Prepaid Mobile Subscriber Numbers By Operator
First Quarter 2016 Prepaid Mobile Subscriber Numbers By Operator
Second Quarter 2016 Prepaid Mobile Subscriber Numbers By Operator
Third Quarter 2016 Prepaid Mobile Subscriber Numbers By Operator
Fourth Quarter 2016 Prepaid Mobile Subscriber Numbers By Operator
First Quarter 2017 Prepaid Mobile Subscriber Numbers By Operator
Second Quarter 2017 Prepaid Mobile Subscriber Numbers By Operator
Third Quarter 2017 Prepaid Mobile Subscriber Numbers By Operator