US Carriers: Who's on Offense/Defense?

Fri, 11/06/2009 - 07:12 by Greg Sterling

Yesterday T-Mobile USA posted Q3 financial results. The bottom line is that the company lost post-paid customers: "T-Mobile USA served 33.4 million customers at the end of the third quarter of 2009 down slightly from 33.5 million at the end of the second quarter of 2009, but up from 32.1 million at the end of the third quarter of 2008."

Only AT&T and Verizon are doing (relatively) well. Sprint and T-Mobile continue to struggle. However both now have very competitive handset lines. T-Mobile was positioning itself as the Android carrier in the US. However that mantle has just been stolen by Verizon, which just released Motorola's Droid. 

The larger point is that all the Android and other handsets, including BlackBerry, are now widely available and largely neutralize one another. In other words, they're now largely retention tools for carriers. Only the iPhone remains a lure to customers to migrate to AT&T, for as long as exclusivity lasts. 

Then the question becomes: how do carriers compete once users can get almost any handset from any of the carriers? Price and proprietary software/experiences is the answer. However that didn't work so well for T-Mobile with the MySherpa (Geodelic) app. As I wrote earlier this week, Vondafone is trying something interesting with Vodafone 360. And I understand from a reliable source that Verizon has some other interesting things up its sleeve. 

Verizon can compete with its almost-as-good Droid and claims of network superiority. AT&T, for the time being, still has the iPhone. Sprint and T-Mobile must find new competitive stories to tell. For Sprint it appears to be about price, although the company hopes 4G will soon be part of its story. T-Mobile, which has suffered two bad PR episodes of late (lost data, service outage), is in the toughest spot of the majors. The company just lowered prices and may be forced to again to grab attention.

As we move into the holiday shopping season, we're likely to see lots of incentives and deals flowing from the various carriers (e.g., there's a rumor about AT&T offering an 8G iPhone 3GS for $99). Verizon and AT&T are likely to grab most of the attention if the offers aren't sufficiently powerful from Sprint & T-Mobile. If the latter two are unable to gain momentum in Q4, it will put considerable pressure on both to do something even more radical in 2010. 

End of Q3 major carriers US subscriber numbers: 252.3 million