LTE Enables US Wireless Price War as Carriers Fight for 60 million New LTE Subs in 2014

Strategy Analytics Says Despite Starting a Price War, T-Mobile US Will See its Market Share Drop as AT&T, Sprint and Verizon Wireless Fire Back

Feb 20, 2014, 13:16 ET from Strategy Analytics

BOSTON, Feb. 20, 2014 /PRNewswire/ -- The top US wireless carriers are locked in a battle for LTE dominance, with a new price war breaking out for 2014. Despite instigating the war, T-Mobile will not win, according to the Strategy Analytics Wireless Operator Strategies (WOS) service report, "US Wireless Market Outlook 2013-2018." (  

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In a companion report analyzing the competitive market dynamics, "US Wireless Market Outlook: T-Mobile Stirs Up Price Wars, AT&T, Verizon Wireless and Sprint Add Value," (  
Strategy Analytics notes that while the latest pricing moves are spurred on by competition, they are also responding to customer demand and leverage network advancements—without which such shifts in pricing would not make economic sense. 

Key Strategy Analytics predictions for the US wireless market:

  • LTE going strong in the US: Strategy Analytics forecasts the US will see nearly 200 million new LTE retail subs from the end of 2013 through 2018.
  • US wireless market: Healthy growth predicted over the next five years: Strategy Analytics says overall subscriber net additions will grow from 7.5 million in 2014 to 15 million in 2018 (across smartphones and other handsets, PCs, modems and tablets and other consumer electronics).
  • Stable wireless market share in US despite price competition: Among the top four carriers, Verizon Wireless stays on top and T-Mobile on the bottom, while only Sprint gains more than a percentage point in share. T-Mobile will take nearly 16% of retail gross adds in 2014—on par with Sprint and not too far off market leader Verizon Wireless at 22%—its high churn levels will mean it underperforms on share of net adds at only 9% compared to Verizon's 47%. T-Mobile will struggle to stay near 11 percent of the retail market, while Sprint will gain a percent to reach 15.5% by 2018 and the two leaders remain on top with Verizon Wireless at 33% and AT&T Mobility just under 25%.
  • Subsidies decline but do not disappear: As the big carriers follow T-Mobile's lead and offer installment payment plans for smartphones instead of large upfront subsidies, the average subsidy per handset connection will drop from $125 in 2013 to $106 in 2018—but the subsidy model will not disappear in the US.
  • Prepaid mobile phone subscriptions see growth but postpaid stays dominant: In 2014, prepaid will represent over half the gross adds, but represent only 25% of total retail subscriptions and an even lower 14% of wireless carrier service revenue.


Susan Welsh de Grimaldo, Director, Wireless Operators & Networks said: "Despite the price war, we do not anticipate any major shifts in market positioning among the top 4 carriers in 2014, as Verizon Wireless and AT&T have shown they can leverage expanding LTE capacity and fight back with compelling offers that tap into consumer demand at the upper and middle tiers of the market. Newly freed capacity on their 3G networks will give more room to be price competitive with entry level and prepaid plans this year as well."

Phil Kendall, Director, Wireless Operator Strategies, commented: "We see good growth opportunities in the US wireless market, building on the intense competition to have the best nationwide LTE network.  Sprint is suffering as it works through network upgrades and plays catch up with LTE build, but should be in good position to lower churn and regain some share losses by Q4. T-Mobile will benefit as it adds more carriers (spectrum) into its LTE network this year and then into 2015 as it moves to add 700 MHz spectrum for better in-building and rural coverage."

About Strategy Analytics

Strategy Analytics, Inc. provides the competitive edge with advisory services, consulting and actionable market intelligence for emerging technology, mobile and wireless, digital consumer and automotive electronics companies. With offices in North America, Europe and Asia, Strategy Analytics delivers insights for enterprise success. 

US Contact: Susan Welsh de Grimaldo, +1 617 614 0724,

European Contact: Phil Kendall, +44 1908 423620

SOURCE Strategy Analytics