Four Largest Cellphone Carriers Squeezing Smaller Providers Out Of The Market

 

Chicago (IL) - Recently published cellphone market share numbers in the U.S. indicate that the four largest carriers in the U.S. - AT&T Wireless, Verizon Wireless, Sprint Nextel and T-Mobile - have found effective ways to limit churn and protect their customer base. The growth of the big four is especially painful for smaller carriers that are bleeding market share.

According to a report published by Gartner, AT&T Wireless, Verizon Wireless, Sprint Nextel and T-Mobile combined are home to 84.4% of U.S. cellphone users, which added up to 272.1 million at the end of Q4 of 2007. If Gartner is correct, then the market is pretty much set with a pattern that indicates that size matters in the current business environment. AT&T Wireless, the largest U.S. cellphone carrier with 70.1 million users, posted the strongest growth in this group, adding 14.9% or more than nine million new customers over the course of the year. Verizon Wireless, second in the group, achieved 11.2% growth (to 65.7 million users), Sprint Nextel with 48.5 million users saw its user base climb 0.7% and T-Mobile 28.7 million customers saw a 14.6% jump.

There are some smaller providers with greater percentage growth (such as Leap Wireless with 28.3% and MetroPCS with 34.7%), but the group of "other carriers" suffers from a decreasing customer base in a market that saw a 9.2% expansion of users in 2007.

Gartner estimates that smaller carriers lost an average of 7.2% of their customers in 2007 that added up to 697,200 users. At the same time, the largest four carriers also posted the highest average revenue per user - between $51.49 for Verizon Wireless and $58.00 for Sprint Nextel (exception: Centennial Wireless users paid 68.00 per month on average) as well as the lowest churn rate, which indicates users a carrier lost: While providers such as Boost Mobile posted a churn rate of up to 7.5%, Verizon Wireless stood at 1.20%, AT&T Wireless at 1.7%, Sprint Nextel at 2.30% and T-Mobile at 2.80%.

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  • jamesontoms
    Tracfone at $100 per year
    Several years ago, I tried Sprint, getting appalled at what I called fraud.
    Sprint faulted on their homepage's huge advertisement,
    they failed to recognize a failed phone I returned even though Sprint paid for the return, their phone response was 20 minutes to 40 minutes,
    and they would refuse to resolve issues
    -- one empathetic Sprint person said, "It'll be a blue moon before Sprint responds to this [your] submission."

    I then tried AT&T.

    From my Sprint Fraud website,
    I've received email from the main cell phone customers,
    distraught over their enormous phone bills -- often of the order $700.
    Cell phones aren't like home phones -- why don't people prefer prepaid
    service like much of the rest of the world.
    Does advertising so beckon, or are Americans so innumerate,
    that people in the U.S. can't seek their best interest.

    After a year, and being familiar with far less expensive cell phone service outside the U.S., I have now for 5 years used
    Tracfone (tracfone.com)
    Each year, I pay $100 for their 1 year card with 400 minutes.
    I needn't do anything for a whole year, unless I use up all 400 minutes.
    I get no monthly bill, and I have no possibility for a $700 cell phone bill.
    At these prices, I, my wife, and my child all now have a Tracfone.
    I've seen Tracfone in a small section of WalMart, Target, RadioShack, Safeway, CVS, ...
    Having started from a Mexican company, Tracfone
    provides a less expensive and less frustrating service
    than Sprint and other major cell phone carriers.
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  • Anonymous
    I guess it all depends on your area. I have had ATT (Cingular) for the last 4 years and I have never had a problem with the service. In that time Ive dropped maybe a hand full of calls and have never gone over my minutes (with the free Cingular-to-Cingular calls I hardly used any minutes). The only issue I ever had was when I jumped in the inter coastal with my 8125. It was only 7mo old and I was paying insurance on it that I carried over from my previous phone. It turns out that the 8125 isnt eligible for insurance so they refunded me the money I had already paid for insurance and forced me to buy a new phone. At first I was pissed but it worked out well for me because I ended up upgrading to the 3G 8252 for about $100.
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  • Anonymous
    When is the FCC going to ditch the current spectrum licensing model and make it all Wifi? All providers would have bandwidth sharing agreements just like internet backbones and it would let you use other companies towers if you weren't near one of your own.

    The current model for cellphones are a rip off. Not too mention the monopoly given to radio and TV stations.
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