Busy week in mobile
This week promises to be an eventful one in the ever-dynamic telecom market, with major players like AT&T, T-Mobile, and Verizon, and the cable MVNO giants Comcast and Charter gearing up to unveil their Q2 financial results. It is very seldom that we get all the major players releasing their quarterly financials in the same week, thus it should be quite an eventful week showing who was able to bring in new subscribers at the expense of which carriers.
In addition to the telecom financial extravaganza, as we noted in our previous Week in Review, Samsung prepares to launch its highly awaited new foldable devices, the Galaxy Z Fold and Z Flip, at its home base Seoul on July 26th. Samsung, as with previous flagship debuts, has been offering customers a $50 pre-order discount since early July, and it will be interesting to hear how many consumers have taken advantage of these discounts without seeing the phone and hearing the final price tag.
The Circana Take:
- Verizon’s Q2 financials are the most anticipated ones among the crowd as the carrier, in May, simplified its service plans, which now unbundle the content add-ons, thus are more affordable. Verizon then complemented the new plans with aggressive device promotions (free phone offers); thus, our focus will be on the carriers’ new phone subscriber additions as well as its churn levels.
- Circana previously reported on a recent survey data highlighting an expected increase in AT&T’s churn in Q2 and Q3 of 2023. The carrier’s CFO a couple weeks ago revealed that their Q2 performance has been trending below their guidance due to the slightly increased churn. AT&T’s customer retention performance (through device upgrade offers as well as aggressive win-back discounts) has been highly impressive, and it will be interesting to see if the carrier can keep up with these financially challenging programs and maintain/grow the base.
- T-Mobile has launched a new un-carrier campaign dubbed Phone Freedom that targets AT&T and its three-year device lock program. The program was launched in early Q2, and we will wait to see if T-Mobile sheds any light on the success of the program. We will also closely be watching the carrier’s progress with its Fixed Wireless Access home internet solution.
- The cable MVNOs Spectrum Mobile and Xfinity Mobile had a record quarter in Q1 2023, and they brought in over a million new subscribers (686K at Spectrum, 355K at Xfinity) thanks to discounted bundle offers that combine home Internet service with unlimited mobile data at a $49 introductory price. While reaching the million mark for a consecutive quarter is unlikely, we expect both companies to announce substantial net add figures in Q2 2023.
- Prepaid will be another focus area as despite all efforts by the big parents, the prepaid market continues to gradually shrink in favor of the postpaid market. Verizon has been struggling to retain and grow the prepaid base acquired through Tracfone, while the high-end segment of T-Mobile’s Metro prepaid base migrates to the carrier’s postpaid base at a quarterly rate of ~160K subscribers.
- Samsung’s upcoming launch of the new Galaxy Z Fold and Z Flip lineup will by far be the most exciting event of the week, though it is important to keep in mind that consumer interest in foldables is still marginal due to high cost and durability concerns. According to the Circana Connected Intelligence Mobility survey, about 20% of smartphone owners show genuine interest in purchasing a foldable smartphone, and this figure has practically changed very little in the past two years.