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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%.