Table of Contents
Executive Summary
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- The issues
- Near universal penetration leaves little room for subscriber growth
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- Figure 1: Cell phone ownership among adults and teens, April 2010-September 2015*
- Majority satisfied, not interested in switching
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- Figure 2: Intent to change carrier in next year and incidence of changing carrier in past year, December 2015
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- Figure 3: Reasons not to switch carriers, December 2015
- WiFi, sponsored data to keep data plans in check
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- Figure 4: Use of phones via WiFi networks at home and out-of-home, December 2015
- The opportunities
- Half of switchers seeking better service
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- Figure 5: Reasons for wanting to switch service, December 2015
- Ads, sponsored data open new revenue streams in mobile video
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- Figure 6: Daily use of video on mobile phones by type of content, December 2015
- Tethering has potential to increase demand for data
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- Figure 7: Use of phones as mobile hotspot, December 2015
- What it means
The Market – What You Need to Know
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- Sales stall 2012-15
- ARPU in long-term decline
- Connected devices route to volume growth
- New challenges in WiFi, cap-free video
Market Size
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- Growth a challenge in mature market
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- Figure 8: Monthly ARPU, 2000-14
- Perks in connected devices
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- Figure 9: Number of laptops and tablets subscribed to mobile service, 2010-15
- ARPU unlikely to rise in heated competition between carriers
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- Figure 10: Total US wireless service revenues and forecast, at current prices, 2010-18
- Industry on firmer footing when equipment sales are considered
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- Figure 11: Total US wireless service and equipment sales, 2012-14
Market Perspective
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- At 95% of adults, adoption nearly complete
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- Figure 12: Cell phone ownership among adults and teens, April 2010-September 2015*
- Impact of forced upgrade to tiered plans has lingering impact on pricing
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- Figure 13: Average monthly spend on mobile phone service, 2011-15
- WiFi usage weighing down need for data
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- Figure 14: Frequency of use of phones via WiFi networks at home and out-of-home, December 2015
- Public and private WiFi swelling
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- Figure 15: Cablevision Freewheel direct marketing, September 2015
- WiFi First adds competition, changes billing structure
- Mobile video moves out of data caps
Market Factors
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- Smartphones headed toward universal penetration
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- Figure 16: Ownership of phones, tablets, and computers, August 2015
- Connected devices, tethering increase data consumption
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- Figure 17: Use of mobile phone as wireless hotspot, December 2015
- Mobile video revenue cutting in three directions
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- Figure 18: Frequency of viewing video on mobile devices, by type of video, December 2015
Key Players – What You Need to Know
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- Verizon and AT&T retain leadership in face of T-Mobile gains
- Three brands carry interest from a quarter of switchers
- New launches in mobile video
- 5G arriving sooner than expected
What’s Working?
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- Premium tier retains lead
- T-Mobile coming on strong
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- Figure 19: Market share of wireless brands, by household income, December 2015
- Installment/upgrade programs drive equipment revenue higher
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- Figure 20: Wireless carrier equipment sale revenues, 2012-14
- Figure 21: Use of connected devices and early upgrade programs, by carrier, December 2015
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- Figure 22: T-Mobile Jump On Demand online ad, December 2015
What’s Struggling?
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- Sprint lags in consideration
- T-Mobile pulling consideration from Sprint’s potential customers
- MVNOs not top-of-mind
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- Figure 23: Providers under consideration as next carrier, December 2015
What’s Next?
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- Streaming entertainment exiting data restrictions
- T-Mobile Binge On provides cap-exempt mobile video
- Verizon’s Go90 open to all, exclusive for some
- AT&T to deliver new mobile video service in 2016
- Hotspot access
- Verizon launching 5G in 2017
The Consumer – What You Need to Know
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- Healthy adoption of connected device, early upgrade plans
- Interest in changing service limited to a select few
- Half of switchers looking for better network, better service
- Majority satisfied with carrier, vast majority with internet service
Growth Areas – Connected Devices and Early Upgrades
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- Connected devices, early upgrade plans show mainstream adoption
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- Figure 24: Use of connected devices and early upgrade programs, December 2015
- Switchers more devoted to connected devices, upgrades
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- Figure 25: Use of connected devices and early upgrade programs, by interest in switching providers, December 2015
- Age, combined with income, drives adoption
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- Figure 26: Use of connected devices and early upgrade programs, by age and income, December 2015
- Hispanics top users for connected devices and early upgrade plans
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- Figure 27: Use of connected devices and early upgrade programs, by race and Hispanic origin, December 2015
- Urban lifestyle lends to adoption
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- Figure 28: Use of connected devices and early upgrade programs, by area, December 2015
Interest in Switching Carriers
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- Focusing on the few who matter
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- Figure 29: Intent to change carrier, December 2015
- Younger age groups more likely to switch
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- Figure 30: Intent to change carrier, by age, December 2015
- Connected device users more interested in switching
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- Figure 31: Intent to change carrier, by use of connected devices and dissatisfaction with internet service, December 2015
- Hispanics carry elevated intention to change carriers
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- Figure 32: Intent to change carrier, by race and Hispanic origin, December 2015
- Parents top demos for switching
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- Figure 33: Intent to change carrier, by children in household, December 2015
Reasons for Switching Carriers
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- Half switching to save money
- Half switching for better service
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- Figure 34: Reasons for wanting to switch service, December 2015
Reasons for Staying with Current Carrier
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- Majority anchored by satisfaction
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- Figure 35: Reasons for not wanting to change carrier, December 2015
- Internet speeds sufficient for majority of smartphone owners
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- Figure 36: Satisfaction with current internet speeds among smartphone owners, December 2015
- Younger age groups more likely to feel pushed into cheaper carriers
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- Figure 37: Reasons for not wanting to change carrier, by age, December 2015
- Lower-income groups buy what they can afford
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- Figure 38: Reasons for not wanting to change carrier, by household income, December 2015
- More Hispanics and Blacks feel constrained by price points
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- Figure 39: Reasons for not wanting to change carrier, by race/Hispanic origin, December 2015
Consumption of Mobile Video Content
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- One in four streams video daily
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- Figure 40: Daily use of video on mobile phones by type of content, December 2015
- Young men top target for mobile video services
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- Figure 41: Daily use of video on mobile phones, by gender and age, December 2015
- Urbanites more likely to be daily streamers
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- Figure 42: Daily use of video on mobile phones, by area, December 2015
- Blacks a top audience for mobile video
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- Figure 43: Daily use of video on mobile phones, by race/Hispanic origin, December 2015
Appendix – Data Sources and Abbreviations
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- Data sources
- Sales data
- Consumer survey data
- Consumer qualitative research
- Abbreviations and terms
- Abbreviations
- Terms
Appendix – Additional Consumer Data
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- Figure 44: Use of connected devices and early upgrade programs, by age and gender, December 2015
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- Figure 45: Daily use of video on mobile phones, by carrier, December 2015
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- Figure 46: Daily use of video on mobile phones, by number of devices on plan, December 2015
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