US Wireless Market Trends Q2 2015

Mobile

jan-dawson
  • Jan Dawson Chief Analyst (408) 744-6244 jan@jackdawresearch.com @jandawson US wireless market trends for Q2 2015 mailto:jan@jackdawresearch.com
  • Introduction • This analysis mostly focuses on five players: AT&T, Sprint, T-Mobile, Tracfone, and Verizon Wireless • These are the four largest operators in the US wireless market, four of them network operators and Tracfone a mobile virtual network operator (MVNO), running on the other companies’ networks • US Cellular is the only other wireless operator with several million subscribers, but there are many other smaller operators with less than a million subs • As such, this analysis captures much of the total market, but not all of it. However, these players dominate, and are likely to take an ever- increasing share of the total market going forward 2
  • Note • This deck represents the bottom tier of Jackdaw Research’s analysis of the US wireless market • We also provide the underlying data behind these charts to clients who subscribe to a higher tier • The highest tier includes custom presentations on market trends in addition to the data • If you are interested in these options, please contact Jan Dawson at jan@jackdawresearch.com 3 mailto:jan@jackdawresearch.com
  • Definitions 1 • Postpaid: the majority of retail subscribers today are described as postpaid, i.e. they pay a monthly bill based on a plan and overages. Postpaid subscribers traditionally signed two-year contracts, though this is starting to change • Prepaid: around a quarter of retail phone subscribers, who add credit to their accounts before it is used. Prepaid plans increasingly resemble postpaid plans in certain ways, including monthly billing 4
  • Definitions 2 • ARPU: average revenue per user. The average monthly amount paid by a subscriber for services rendered. In the past, the major subscriber revenue metric, but increasingly being replaced by: • ABPU: average billings per user. Whereas ARPU only includes service revenues, ABPU also includes payments for equipment installment plans, and so is a better reflection of total spend by customers 5
  • Definitions 3 • Churn: the average percentage of subscribers who left the carrier each month during the quarter • Net adds: the net difference in the subscriber base from one quarter to the next, being the difference between the new subscribers added and those lost to churn • Gross adds: the gross number of new subscribers (i.e. before those lost to churn is subtracted). Can be calculated roughly from churn and net add numbers but is generally not directly reported 6
  • Contents • Financials - revenues, profitability, capital intensity • Subscribers - total subs, net adds, churn • Device trends - subsidies, penetration 7
  • Wireless revenues, $m 8 Source: Company reporting, Jackdaw Research analysis 1. Financials 0 10,000 20,000 30,000 Q1 2012 Q3 2012 Q1 2013 Q3 2013 Q1 2014 Q3 2014 Q1 2015 AT&T Sprint T-Mobile Tracfone Verizon
  • Revenue growth, year on year 9 Source: Company reporting, Jackdaw Research analysis 1. Financials -10% 0% 10% 20% 30% 40% Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 AT&T Sprint T-Mobile Tracfone Verizon
  • 0% 10% 20% 30% 40% 50% Q1 2012 Q3 2012 Q1 2013 Q3 2013 Q1 2014 Q3 2014 Q1 2015 AT&T Sprint T-Mobile Tracfone Verizon Wireless EBITDA margins 10 Source: Company reporting, Jackdaw Research analysis Note: TMO results in Q2 2014 adjusted to strip out the effects of a spectrum sale worth $731m. Sprint in Q4 2014 adjusted to remove impact of impairments 1. Financials
  • Wireless operating margins 11 Source: Company reporting, Jackdaw Research analysis Note: TMO results in Q2 2014 adjusted to strip out the effects of a spectrum sale worth $731m. Sprint in Q4 2014 adjusted to remove impact of impairments 1. Financials -40% -30% -20% -10% 0% 10% 20% 30% 40% Q1 2012 Q3 2012 Q1 2013 Q3 2013 Q1 2014 Q3 2014 Q1 2015 AT&T Sprint T-Mobile Tracfone Verizon
  • Wireless Capital intensity 12 Source: Company reporting, Jackdaw Research analysis 1. Financials 0% 10% 20% 30% Q1 2012 Q3 2012 Q1 2013 Q3 2013 Q1 2014 Q3 2014 Q1 2015 AT&T Sprint T-Mobile Verizon Sprint hasn’t reported wireless capex for Q2 2015 yet, and appears to have switched to reporting cash capex only
  • Total subscribers, 000s 13 Source: Company reporting, Jackdaw Research analysis 2. Subscribers 0 25,000 50,000 75,000 100,000 125,000 Q1 2012 Q3 2012 Q1 2013 Q3 2013 Q1 2014 Q3 2014 Q1 2015 AT&T Sprint T-Mobile Tracfone Verizon (retail only)
  • 0 25,000 50,000 75,000 100,000 125,000 AT&T Sprint T-Mobile Tracfone Verizon Postpaid Prepaid Connected Wholesale Subscriber breakdown, 000s 14 Source: Company reporting, Jackdaw Research analysis Note: Verizon doesn’t report wholesale or connected devices (M2M) subscribers. In addition, since Sprint reports its connected devices subscribers as part of its retail postpaid and wholesale subscribers, but also reports these separately, we have broken them out and subtracted them from the postpaid and wholesale subscriber totals to avoid double-counting 2. Subscribers
  • Total net adds, 000s 15 Source: Company reporting, Jackdaw Research analysis 2. Subscribers -1,000 0 1,000 2,000 3,000 Q1 2012 Q3 2012 Q1 2013 Q3 2013 Q1 2014 Q3 2014 Q1 2015 AT&T Sprint (platform) T-Mobile Tracfone Verizon
  • -1,000 0 1,000 2,000 3,000 AT&T Sprint platform T-Mobile Tracfone Verizon Postpaid Prepaid Connected Wholesale Net add breakdown, 000s 16 Source: Company reporting, Jackdaw Research analysis Note: since Sprint reports its connected devices subscribers as part of its retail postpaid and wholesale subscribers, but also reports these separately, we have broken them out and subtracted them from the postpaid and wholesale net add totals, In addition, Verizon doesn’t report connected or wholesale subscribers or net adds so these are missing. 2. Subscribers
  • Postpaid net adds by device, 000s 17 Source: Company reporting, Jackdaw Research analysis 2. Subscribers -500 0 500 1,000 1,500 AT&T Sprint T-Mobile Verizon Wireless Postpaid phone net adds Postpaid tablet net adds
  • Postpaid phone net adds, 000s 18 Source: Company reporting, Jackdaw Research analysis 2. Subscribers -750 -500 -250 0 250 500 750 1,000 1,250 1,500 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 AT&T Sprint T-Mobile Verizon
  • Postpaid tablet net adds, 000s 19 Source: Company reporting, Jackdaw Research analysis 2. Subscribers 0 500 1,000 1,500 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 AT&T Sprint T-Mobile Verizon
  • Total net adds for big 5, 000s 20 Source: Company reporting, Jackdaw Research analysis 2. Subscribers -2,000 0 2,000 4,000 6,000 8,000 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Postpaid Prepaid Wholesale Connected Total Phones Tablets
  • Total subs for big 5 21 Source: Company reporting, Jackdaw Research analysis 2. Subscribers 0 100,000 200,000 300,000 400,000 Q1 2012 Q3 2012 Q1 2013 Q3 2013 Q1 2014 Q3 2014 Q1 2015 Postpaid Prepaid Connected Total
  • Total subs for big 5 22 Source: Company reporting, Jackdaw Research analysis Note: excludes wholesale to avoid double-counting. Figures for end of Q2 2015 2. Subscribers 10% 21% 69% Postpaid Prepaid Connected
  • Market makeup 23 Note: all numbers and percentages estimated. Totals only represent the five major operators Source: Company reporting, Jackdaw Research analysis 2. Subscribers 10% 4% 6% 8% 9% 13% 50% Total postpaid smartphones Total prepaid smartphones Total postpaid feature phones Total prepaid feature phones Total postpaid tablets Total other mobile broadband etc Total connected devices (excl. Verizon)
  • Churn – postpaid 24 Source: Company reporting, Jackdaw Research analysis 2. Subscribers 0% 1% 2% 3% Q1 2012 Q3 2012 Q1 2013 Q3 2013 Q1 2014 Q3 2014 Q1 2015 AT&T Sprint T-Mobile Verizon
  • Churn – prepaid 25 Source: Company reporting, Jackdaw Research analysis 2. Subscribers 0% 2% 4% 6% Q1 2012 Q3 2012 Q1 2013 Q3 2013 Q1 2014 Q3 2014 Q1 2015 Sprint T-Mobile Tracfone
  • Losses implied by postpaid churn, 000s 26 Source: Company reporting, Jackdaw Research analysis 2. Subscribers 0 1,000 2,000 3,000 4,000 Q2 2012 Q4 2012 Q2 2013 Q4 2013 Q2 2014 Q4 2014 Q2 2015 AT&T Sprint T-Mobile Verizon
  • Estimated postpaid gross adds, 000s 27 Source: Company reporting, Jackdaw Research analysis 2. Subscribers 0 1,000 2,000 3,000 4,000 5,000 6,000 Q2 2012 Q4 2012 Q2 2013 Q4 2013 Q2 2014 Q4 2014 Q2 2015 AT&T Sprint T-Mobile Verizon
  • $45 $50 $55 $60 $65 $70 Q1 2012 Q3 2012 Q1 2013 Q3 2013 Q1 2014 Q3 2014 Q1 2015 AT&T (phone-only) Sprint T-Mobile Verizon (ARPA/CPA) ARPU – postpaid 28 Source: Company reporting, Jackdaw Research analysis Verizon’s ARPU is estimated from its ARPA (per account) figure, while others are as reported. These numbers do not include equipment installment payments, whereas the ABPU figure on the next slide does 2. Subscribers
  • ABPU – postpaid 29 Source: Company reporting, Jackdaw Research analysis 2. Subscribers 50 55 60 65 70 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 AT&T Sprint T-Mobile Verizon
  • ARPU - prepaid 30 Source: Company reporting, Jackdaw Research analysis 2. Subscribers $0 $10 $20 $30 $40 Q1 2012 Q3 2012 Q1 2013 Q3 2013 Q1 2014 Q3 2014 Q1 2015 Sprint T-Mobile Tracfone
  • Smartphone sales as % of postpaid phone sales 31 Source: Company reporting, Jackdaw Research analysis 3. Device metrics 60% 70% 80% 90% 100% Q1 2012 Q3 2012 Q1 2013 Q3 2013 Q1 2014 Q3 2014 Q1 2015 AT&T Sprint T-Mobile Verizon
  • 0 3 6 9 12 15 Q1 2012 Q3 2012 Q1 2013 Q3 2013 Q1 2014 Q3 2014 Q1 2015 AT&T Sprint T-Mobile Verizon Number of smartphones sold, m 32 Source: Company reporting, Jackdaw Research analysis Note: for AT&T and Verizon, these numbers represent postpaid phone sales only. For Sprint and T-Mobile, they include prepaid phone sales. Sprint has unfortunately stopped reporting this metric. 3. Device metrics
  • % of postpaid phone base on smartphones 33 Source: Company reporting, Jackdaw Research analysis 3. Device metrics 0% 30% 60% 90% Q1 2012 Q3 2012 Q1 2013 Q3 2013 Q1 2014 Q3 2014 Q1 2015 AT&T Sprint T-Mobile Verizon
  • 0% 2% 4% 6% 8% 10% 12% Q3 2012 Q1 2013 Q3 2013 Q1 2014 Q3 2014 Q1 2015 AT&T Sprint T-Mobile Verizon % of postpaid phone base upgrading in quarter 34 Source: Company reporting, Jackdaw Research analysis Note: Sprint and T-Mobile had identical numbers in Q4 2013 and Q1 2014. Hence, the lines representing them in the chart overlap each other during those two quarters. AT&T didn’t report this metric for several quarters but did again in Q4 2014. 3. Device metrics
  • Equipment revenue, $m 35 Source: Company reporting, Jackdaw Research analysis 3. Device metrics 0 1,000 2,000 3,000 4,000 5,000 Q1 2012 Q3 2012 Q1 2013 Q3 2013 Q1 2014 Q3 2014 Q1 2015 AT&T Sprint T-Mobile Tracfone Verizon
  • Installment billings, $m 36 3. Device metrics 0 200 400 600 800 1,000 1,200 1,400 1,600 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 AT&T (actuals and estimates) Sprint (includes Lease plans) T-Mobile Verizon (actuals and estimates)
  • 0% 10% 20% 30% 40% 50% 60% 70% Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 AT&T Sprint Verizon % of postpaid sales off subsidy system 37 Note: T-Mobile no longer reports this metric, but had passed 80% in Q1 2014, when it last reported. 3. Device metrics
  • % of postpaid base off subsidy model 38 3. Device metrics 0% 20% 40% 60% 80% 100% Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 AT&T Sprint T-Mobile Verizon
  • Jan Dawson Chief Analyst (408) 744-6244 jan@jackdawresearch.com @jandawson Thank you mailto:jan@jackdawresearch.com
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  • Jan Dawson Chief Analyst (408) 744-6244 jan@jackdawresearch.com @jandawson US wireless market trends for Q2 2015 mailto:jan@jackdawresearch.com
  • Introduction • This analysis mostly focuses on five players: AT&T, Sprint, T-Mobile, Tracfone, and Verizon Wireless • These are the four largest operators in the US wireless market, four of them network operators and Tracfone a mobile virtual network operator (MVNO), running on the other companies’ networks • US Cellular is the only other wireless operator with several million subscribers, but there are many other smaller operators with less than a million subs • As such, this analysis captures much of the total market, but not all of it. However, these players dominate, and are likely to take an ever- increasing share of the total market going forward 2
  • Note • This deck represents the bottom tier of Jackdaw Research’s analysis of the US wireless market • We also provide the underlying data behind these charts to clients who subscribe to a higher tier • The highest tier includes custom presentations on market trends in addition to the data • If you are interested in these options, please contact Jan Dawson at jan@jackdawresearch.com 3 mailto:jan@jackdawresearch.com
  • Definitions 1 • Postpaid: the majority of retail subscribers today are described as postpaid, i.e. they pay a monthly bill based on a plan and overages. Postpaid subscribers traditionally signed two-year contracts, though this is starting to change • Prepaid: around a quarter of retail phone subscribers, who add credit to their accounts before it is used. Prepaid plans increasingly resemble postpaid plans in certain ways, including monthly billing 4
  • Definitions 2 • ARPU: average revenue per user. The average monthly amount paid by a subscriber for services rendered. In the past, the major subscriber revenue metric, but increasingly being replaced by: • ABPU: average billings per user. Whereas ARPU only includes service revenues, ABPU also includes payments for equipment installment plans, and so is a better reflection of total spend by customers 5
  • Definitions 3 • Churn: the average percentage of subscribers who left the carrier each month during the quarter • Net adds: the net difference in the subscriber base from one quarter to the next, being the difference between the new subscribers added and those lost to churn • Gross adds: the gross number of new subscribers (i.e. before those lost to churn is subtracted). Can be calculated roughly from churn and net add numbers but is generally not directly reported 6
  • Contents • Financials - revenues, profitability, capital intensity • Subscribers - total subs, net adds, churn • Device trends - subsidies, penetration 7
  • Wireless revenues, $m 8 Source: Company reporting, Jackdaw Research analysis 1. Financials 0 10,000 20,000 30,000 Q1 2012 Q3 2012 Q1 2013 Q3 2013 Q1 2014 Q3 2014 Q1 2015 AT&T Sprint T-Mobile Tracfone Verizon
  • Revenue growth, year on year 9 Source: Company reporting, Jackdaw Research analysis 1. Financials -10% 0% 10% 20% 30% 40% Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 AT&T Sprint T-Mobile Tracfone Verizon
  • 0% 10% 20% 30% 40% 50% Q1 2012 Q3 2012 Q1 2013 Q3 2013 Q1 2014 Q3 2014 Q1 2015 AT&T Sprint T-Mobile Tracfone Verizon Wireless EBITDA margins 10 Source: Company reporting, Jackdaw Research analysis Note: TMO results in Q2 2014 adjusted to strip out the effects of a spectrum sale worth $731m. Sprint in Q4 2014 adjusted to remove impact of impairments 1. Financials
  • Wireless operating margins 11 Source: Company reporting, Jackdaw Research analysis Note: TMO results in Q2 2014 adjusted to strip out the effects of a spectrum sale worth $731m. Sprint in Q4 2014 adjusted to remove impact of impairments 1. Financials -40% -30% -20% -10% 0% 10% 20% 30% 40% Q1 2012 Q3 2012 Q1 2013 Q3 2013 Q1 2014 Q3 2014 Q1 2015 AT&T Sprint T-Mobile Tracfone Verizon
  • Wireless Capital intensity 12 Source: Company reporting, Jackdaw Research analysis 1. Financials 0% 10% 20% 30% Q1 2012 Q3 2012 Q1 2013 Q3 2013 Q1 2014 Q3 2014 Q1 2015 AT&T Sprint T-Mobile Verizon Sprint hasn’t reported wireless capex for Q2 2015 yet, and appears to have switched to reporting cash capex only
  • Total subscribers, 000s 13 Source: Company reporting, Jackdaw Research analysis 2. Subscribers 0 25,000 50,000 75,000 100,000 125,000 Q1 2012 Q3 2012 Q1 2013 Q3 2013 Q1 2014 Q3 2014 Q1 2015 AT&T Sprint T-Mobile Tracfone Verizon (retail only)
  • 0 25,000 50,000 75,000 100,000 125,000 AT&T Sprint T-Mobile Tracfone Verizon Postpaid Prepaid Connected Wholesale Subscriber breakdown, 000s 14 Source: Company reporting, Jackdaw Research analysis Note: Verizon doesn’t report wholesale or connected devices (M2M) subscribers. In addition, since Sprint reports its connected devices subscribers as part of its retail postpaid and wholesale subscribers, but also reports these separately, we have broken them out and subtracted them from the postpaid and wholesale subscriber totals to avoid double-counting 2. Subscribers
  • Total net adds, 000s 15 Source: Company reporting, Jackdaw Research analysis 2. Subscribers -1,000 0 1,000 2,000 3,000 Q1 2012 Q3 2012 Q1 2013 Q3 2013 Q1 2014 Q3 2014 Q1 2015 AT&T Sprint (platform) T-Mobile Tracfone Verizon
  • -1,000 0 1,000 2,000 3,000 AT&T Sprint platform T-Mobile Tracfone Verizon Postpaid Prepaid Connected Wholesale Net add breakdown, 000s 16 Source: Company reporting, Jackdaw Research analysis Note: since Sprint reports its connected devices subscribers as part of its retail postpaid and wholesale subscribers, but also reports these separately, we have broken them out and subtracted them from the postpaid and wholesale net add totals, In addition, Verizon doesn’t report connected or wholesale subscribers or net adds so these are missing. 2. Subscribers
  • Postpaid net adds by device, 000s 17 Source: Company reporting, Jackdaw Research analysis 2. Subscribers -500 0 500 1,000 1,500 AT&T Sprint T-Mobile Verizon Wireless Postpaid phone net adds Postpaid tablet net adds
  • Postpaid phone net adds, 000s 18 Source: Company reporting, Jackdaw Research analysis 2. Subscribers -750 -500 -250 0 250 500 750 1,000 1,250 1,500 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 AT&T Sprint T-Mobile Verizon
  • Postpaid tablet net adds, 000s 19 Source: Company reporting, Jackdaw Research analysis 2. Subscribers 0 500 1,000 1,500 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 AT&T Sprint T-Mobile Verizon
  • Total net adds for big 5, 000s 20 Source: Company reporting, Jackdaw Research analysis 2. Subscribers -2,000 0 2,000 4,000 6,000 8,000 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Postpaid Prepaid Wholesale Connected Total Phones Tablets
  • Total subs for big 5 21 Source: Company reporting, Jackdaw Research analysis 2. Subscribers 0 100,000 200,000 300,000 400,000 Q1 2012 Q3 2012 Q1 2013 Q3 2013 Q1 2014 Q3 2014 Q1 2015 Postpaid Prepaid Connected Total
  • Total subs for big 5 22 Source: Company reporting, Jackdaw Research analysis Note: excludes wholesale to avoid double-counting. Figures for end of Q2 2015 2. Subscribers 10% 21% 69% Postpaid Prepaid Connected
  • Market makeup 23 Note: all numbers and percentages estimated. Totals only represent the five major operators Source: Company reporting, Jackdaw Research analysis 2. Subscribers 10% 4% 6% 8% 9% 13% 50% Total postpaid smartphones Total prepaid smartphones Total postpaid feature phones Total prepaid feature phones Total postpaid tablets Total other mobile broadband etc Total connected devices (excl. Verizon)
  • Churn – postpaid 24 Source: Company reporting, Jackdaw Research analysis 2. Subscribers 0% 1% 2% 3% Q1 2012 Q3 2012 Q1 2013 Q3 2013 Q1 2014 Q3 2014 Q1 2015 AT&T Sprint T-Mobile Verizon
  • Churn – prepaid 25 Source: Company reporting, Jackdaw Research analysis 2. Subscribers 0% 2% 4% 6% Q1 2012 Q3 2012 Q1 2013 Q3 2013 Q1 2014 Q3 2014 Q1 2015 Sprint T-Mobile Tracfone
  • Losses implied by postpaid churn, 000s 26 Source: Company reporting, Jackdaw Research analysis 2. Subscribers 0 1,000 2,000 3,000 4,000 Q2 2012 Q4 2012 Q2 2013 Q4 2013 Q2 2014 Q4 2014 Q2 2015 AT&T Sprint T-Mobile Verizon
  • Estimated postpaid gross adds, 000s 27 Source: Company reporting, Jackdaw Research analysis 2. Subscribers 0 1,000 2,000 3,000 4,000 5,000 6,000 Q2 2012 Q4 2012 Q2 2013 Q4 2013 Q2 2014 Q4 2014 Q2 2015 AT&T Sprint T-Mobile Verizon
  • $45 $50 $55 $60 $65 $70 Q1 2012 Q3 2012 Q1 2013 Q3 2013 Q1 2014 Q3 2014 Q1 2015 AT&T (phone-only) Sprint T-Mobile Verizon (ARPA/CPA) ARPU – postpaid 28 Source: Company reporting, Jackdaw Research analysis Verizon’s ARPU is estimated from its ARPA (per account) figure, while others are as reported. These numbers do not include equipment installment payments, whereas the ABPU figure on the next slide does 2. Subscribers
  • ABPU – postpaid 29 Source: Company reporting, Jackdaw Research analysis 2. Subscribers 50 55 60 65 70 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 AT&T Sprint T-Mobile Verizon
  • ARPU - prepaid 30 Source: Company reporting, Jackdaw Research analysis 2. Subscribers $0 $10 $20 $30 $40 Q1 2012 Q3 2012 Q1 2013 Q3 2013 Q1 2014 Q3 2014 Q1 2015 Sprint T-Mobile Tracfone
  • Smartphone sales as % of postpaid phone sales 31 Source: Company reporting, Jackdaw Research analysis 3. Device metrics 60% 70% 80% 90% 100% Q1 2012 Q3 2012 Q1 2013 Q3 2013 Q1 2014 Q3 2014 Q1 2015 AT&T Sprint T-Mobile Verizon
  • 0 3 6 9 12 15 Q1 2012 Q3 2012 Q1 2013 Q3 2013 Q1 2014 Q3 2014 Q1 2015 AT&T Sprint T-Mobile Verizon Number of smartphones sold, m 32 Source: Company reporting, Jackdaw Research analysis Note: for AT&T and Verizon, these numbers represent postpaid phone sales only. For Sprint and T-Mobile, they include prepaid phone sales. Sprint has unfortunately stopped reporting this metric. 3. Device metrics
  • % of postpaid phone base on smartphones 33 Source: Company reporting, Jackdaw Research analysis 3. Device metrics 0% 30% 60% 90% Q1 2012 Q3 2012 Q1 2013 Q3 2013 Q1 2014 Q3 2014 Q1 2015 AT&T Sprint T-Mobile Verizon
  • 0% 2% 4% 6% 8% 10% 12% Q3 2012 Q1 2013 Q3 2013 Q1 2014 Q3 2014 Q1 2015 AT&T Sprint T-Mobile Verizon % of postpaid phone base upgrading in quarter 34 Source: Company reporting, Jackdaw Research analysis Note: Sprint and T-Mobile had identical numbers in Q4 2013 and Q1 2014. Hence, the lines representing them in the chart overlap each other during those two quarters. AT&T didn’t report this metric for several quarters but did again in Q4 2014. 3. Device metrics
  • Equipment revenue, $m 35 Source: Company reporting, Jackdaw Research analysis 3. Device metrics 0 1,000 2,000 3,000 4,000 5,000 Q1 2012 Q3 2012 Q1 2013 Q3 2013 Q1 2014 Q3 2014 Q1 2015 AT&T Sprint T-Mobile Tracfone Verizon
  • Installment billings, $m 36 3. Device metrics 0 200 400 600 800 1,000 1,200 1,400 1,600 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 AT&T (actuals and estimates) Sprint (includes Lease plans) T-Mobile Verizon (actuals and estimates)
  • 0% 10% 20% 30% 40% 50% 60% 70% Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 AT&T Sprint Verizon % of postpaid sales off subsidy system 37 Note: T-Mobile no longer reports this metric, but had passed 80% in Q1 2014, when it last reported. 3. Device metrics
  • % of postpaid base off subsidy model 38 3. Device metrics 0% 20% 40% 60% 80% 100% Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 AT&T Sprint T-Mobile Verizon
  • Jan Dawson Chief Analyst (408) 744-6244 jan@jackdawresearch.com @jandawson Thank you mailto:jan@jackdawresearch.com
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