Mobile Service Providers - US - March 2014


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Mintel

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Brands are becoming increasingly savvy in making adjustments in pricing that favor their ARPU, but as subscribers themselves become increasingly sophisticated, these shifts will eventually become transparent to them. It may be time for marketers to primarily focus on growing new services that benefit consumers, rather than tinkering further with plans.
Table of Content

Scope and Themes

What you need to know
Definition
Data sources
Sales data
Consumer survey data
Advertising creative
Abbreviations and terms
Abbreviations
Terms

Executive Summary

The market
Slow growth driven by data
Figure 1: Total US sales and fan chart forecast of cellular service revenue, at current prices, 2008-18
Prepaid gains, but remains a niche
Figure 2: US cellular service revenue, postpaid vs prepaid, 2013
Smartphone-centered lifestyles drive mobile data growth
Figure 3: Features used on cell phone in past 30 days, January 2011-September 2013
Data growth competes with faster speed, lower-cost fixed-point
Connected devices waiting for carriers to pick up
Key players
Figure 4: Cellular carrier, January-September 2013
T-Mobile’s pricing revolution
Network wars dominate airwaves
The consumer
Growth in highest-income group perk for pricy plans
Figure 5: Spend on monthly cell/wireless phone bill, by household income, January-September 2013
Younger subscribers more likely to switch
Figure 6: Interest in switching carriers, and switched to new service in past 12 months, by age, December 2013
Switchers seek cost-relief
Figure 7: Reasons for switching carriers, December 2013
What we think

Issues and Insights

How can the industry grow past universal penetration?
The issues
The implications
Has the future been prepaid?
The issues
The implications

Trend Application

Trend: Guiding Choice
Trend: Who are the Joneses?
Mintel futures: Human

Market Size and Forecast

Key points
New competitive landscape dampened growth in 2013
Increased data use to offset lower connection fees
Sales and forecast
Figure 8: Total US sales and forecast of cellular service revenue, at current prices, 2008-18
Figure 9: Total US sales and forecast of cellular service revenue, at inflation-adjusted prices, 2008-18
Figure 10: US cellular subscriptions, 2008-13
Fan chart forecast
Figure 11: Fan Chart and Forecast: Total US sales of cellular service revenue, at current prices, 2008-18

Market Drivers

Key points
Smartphone ownership
Figure 12: Smartphone ownership, by age, December 2013
Tablets and laptops relatively untapped market
Figure 13: Ownership of smartphones, tablets, and laptops, December 2013
Figure 14: Use of laptops and tablets with cellular plans, December 2013
Rapid shifts in phone use
Figure 15: Features used on cell phone in past 30 days, January 2011-September 2013
Age and spend
Figure 16: Spend on monthly cell/wireless phone bill, by age, January 2013-September 2013
Figure 17: US population by age, 2014-19
Income and spending
Figure 18: Spend on monthly cell/wireless phone bill, by household income, January-September 2013
Figure 19: Household income distribution, 2011-13

Competitive Context

Key points
Home internet major competitor for mobile data
Speed
Price
WiFi hotspots reduce spend on mobile data
Municipal WiFi limited threat, but hotspots at retail are spreading
Home ISPs enhance WiFi coverage

Segment Performance

Key points
Prepaid continues to gain, but more slowly
Figure 20: US cellular service revenues, postpaid vs. prepaid, 2008-18
Postpaid rallies on data use and connected devices
Figure 21: US cellular service postpaid subscriptions, 2008-13
Prepaid gains revenue share but not subscription share
Figure 22: US cellular service prepaid subscriptions, 2008-13

Leading Carriers

Key points
Stasis
Figure 23: Current carrier, January 2008-September 2013
Figure 24: Current carrier, by household income, January-September 2013
Figure 25: Current carrier, by type of plan, December 2013
Figure 26: Current carrier, by recent change in service, December 2013
Top tier even more dominant in total connections
Figure 27: Retail connections, by carrier, December 2012-December 2013

Innovations and Innovators

Key points
The “Uncarrier” shakes up plan design
Sprint charts its own course with Framily pricing
New upgrade options lure customers with the very latest devices
Carriers want to pay your termination fees
Sponsored content opens up supply-side revenue stream
Internet-connected autos represent ongoing opportunity

Marketing Strategies

Overview of the brand landscape
T-Mobile doubles down on support for Un-carrier initiatives
Figure 28: T-Mobile TV ad, “No Contract”, 2014
Figure 29: T-Mobile TV ad, “Pipes”, 2014
Figure 30: AT&T TV ad, “CatchJeremy.com, Day 3”, 2013
AT&T’s kids continue to win fans
Figure 31: AT&T TV ad, “It’s Not Complicated – Pet Turkey,” 2013
Figure 32: AT&T TV ad, “Hours,” 2014
Verizon: “It’s the network, stupid”
Figure 33: Verizon Wireless TV ad, “Map Gallery,” 2013
Figure 34: Verizon Wireless TV ad, “48 Hours,” 2013
Sprint focuses on people
Figure 35: Sprint TV ad, “Framily Plan: Band,” 2013
Value carriers downplay differences, emphasize price
Cricket and Straight Talk suggest all mobile service is the same
Figure 36: Cricket Wireless TV ad, “Half is More,” 2013
Virgin Mobile declares National Breakup Day

Attitudes to Plans and Service

Key points
Confusion reigns
Figure 37: Finding cell phone plans confusing, by age, January-September 2013
Few prefer contract plans
Figure 38: Attitudes to cell phone plans, by age, December 2013
Attitudes to internet service
Figure 39: Attitudes to internet service, by age, December 2013
Figure 40: Attitudes to internet service, by plans to change service, December 2013
Limited interest in docking stations
Figure 41: Preference for landline use, by age, January 2013-September 2013
Figure 42: Interest in docking stations, by age, December 2013
Near-term switchers see value in docks
Figure 43: Interest in docking stations, by plans to change service, December 2013
Prepaid vs postpaid
Figure 44: Type of plan: Prepaid vs contract, by household income, December 2013
Two thirds on group plans
Figure 45: Type of plan: family vs individual, by age, January 2013-September 2013
Figure 46: Type of plan: family vs individual, by household income, January 2013-September 2013
Use of laptops with mobile plans
Figure 47: Use of laptops with cellular plans, by age, December 2013
Use of tablets with mobile plans
Figure 48: Use of tablets with cellular plans, by age, December 2013

Incidence and Interest in Switching

Key points
Sticking with the plan
Figure 49: Relationship between quality of service and interest in switching, by age, January-September 2013
Younger adults switch more frequently
Figure 50: Switched to new service in past 12 months, by age, December 2013
Figure 51: Tenure at current carrier, by age, January-September 2013
Figure 52: Interest in changing carriers, by age, December 2013
Figure 53: Tenure at current carrier, by household income, January-September 2013
Prepaid subscribers like exiting
Figure 54: Switched to new service in past 12 months, by type of plan, December 2013
Figure 55: Interest in changing carriers, by type of plan, December 2013
Changers ready to move again
Figure 56: Interest in changing carriers, by recent change in service, December 2013
18-44s more confident about carrier selection
Figure 57: Carriers under consideration for future use, by age, December 2013

Reasons for Switching

Key points
Price top reason for switching
Figure 58: Reasons for switching carriers, by age, December 2013
Figure 59: Reasons for switching carriers, by type of plan, November 2013
Sentiments related to loyalty
Figure 60: Reasons for not switching carriers, by age, December 2013
Near-term switchers seek customer support
Figure 61: Reasons for switching carriers, by plans to change service, December 2013

Plans, Attitudes and Switching Sentiment by Carrier

Key points
Verizon and TracFone customers happiest with service
Figure 62: Interest in changing carriers, by carrier, December 2013
Figure 63: Reasons to not switch carriers, by carrier, December 2013
Speed still an issue for Sprint
Figure 64: Attitudes to cellular internet service, by carrier, December 2013
Tier one subscribers seek cost-relief, tier two better reception
Figure 65: Type of plan: Prepaid vs contract, by carrier, December 2013
Figure 66: Reasons for switching carriers, by carrier, December 2013

Race and Hispanic Origin

Key points
Overview
Second and third tier more successful with multicultural groups
Figure 67: Cellular carrier subscribed to, by race and Hispanic origin, January-September 2013
Figure 68: Type of plan: family vs individual, by race and Hispanic origin, January-September 2013
Figure 69: Switched to new service in past 12 months, by race/Hispanic origin, December 2013
Figure 70: Tenure (years) at current carrier, by race and Hispanic origin, January-September 2013
Figure 71: Spend on monthly bill, by race and Hispanic origin, January-September 2013

Appendix – Other Useful Consumer Tables

Responses by age
Figure 72: Current carrier, by age, January-September 2013
Figure 73: Current carrier in online survey, by age, December 2013
Figure 74: Type of plan: Prepaid vs contract, by age, December 2013
Responses by household income
Figure 75: Current carrier in online survey, by household income, December 2013
Figure 76: Family plan use across multiple households, by household income, January-September 2013
Figure 77: Interest in changing carriers, by household income, December 2013
Figure 78: Attitudes to cell phone plans, by household income, December 2013
Figure 79: Interest in docking stations, by household income, December 2013
Figure 80: Attitudes to internet service, by household income, December 2013
Figure 81: Switched to new service in past 12 months, by household income, December 2013
Figure 82: Reasons for not switching, by household income, December 2013
Figure 83: Use of laptops with cellular plans, by household income, December 2013
Figure 84: Attitudes to cell phone service, by household income, January-September 2013
Figure 85: Carriers under consideration for future use, by household income, December 2013
Responses by race/Hispanic origin
Figure 86: Cell phone ownership, by race and Hispanic origin, January-September 2013
Figure 87: Tenure (years) at current carrier, by race and Hispanic origin, January-September 2013
Figure 88: Carriers under consideration for future use, by race/Hispanic origin, December 2013
Figure 89: Attitudes to plans, by race/Hispanic origin, December 2013
Figure 90: Type of plan: Prepaid vs contract, by race/Hispanic origin, December 2013
Figure 91: Attitudes to cell phone plans, by race/Hispanic origin, December 2013
Figure 92: Reasons for not switching, by race/Hispanic origin, December 2013
Figure 93: Reasons for switching carriers, by race/Hispanic origin, November 2013
Figure 94: Use of laptops with cellular plans, by race/Hispanic origin, December 2013
Figure 95: Family plan use across multiple households, by race and Hispanic origin, January 2013-September 2013
Responses by carrier
Figure 96: Attitudes to cell phone plans, by carrier, December 2013
Figure 97: Switched to new service in past 12 months, by carrier, December 2013
Figure 98: Use of laptops with cellular plans, by carrier, December 2013
Responses by type of plan
Figure 99: Attitudes to internet service, by type of plan, December 2013
Figure 100: Reasons for not switching, by type of plan, December 2013
Figure 101: Carriers under consideration for future use, by type of plan, December 2013
Figure 102: Use of tablets with cellular plans, by type of plan, December 2013
Responses by intent to change service
Figure 103: Attitudes to cell phone plans, by plans to change service, December 2013
Figure 104: Use of laptops with cellular plans, by plans to change service, December 2013
Figure 105: Use of tablets with cellular plans, by plans to change service, December 2013
Figure 106: Type of plan: Prepaid vs contract, by plans to change service, December 2013
Figure 107: Current carrier, by plans to change service, December 2013
Figure 108: Reasons for not switching, by plans to change service, December 2013

Appendix – Trade Associations