There are a couple logical ways U.S. mobile market structure could change over the next few years. The most dramatic change would occur if Sprint and T-Mobile US were to merge. That would immediately consolidate national service providers from four to three and position the merged Sprint-T-Mobile US as nearly equal in market share to Verizon Wireless and AT&T Mobility.
Barring that change, there are a couple of other ways market structure could shift, albeit more slowly, since actual propensity to churn actually is relatively limited.
By some accounts, Verizon Wireless has about 31 percent market share, AT&T has about 27 percent share, while Sprint has about 10 percent and T-Mobile US has about 11 percent share. Other assessments would have Sprint remaining bigger than T-Mobile US, with Sprint claiming perhaps 10 percent share and T-Mobile claiming perhaps eight percent share.
One source of the differences is how to account for wholesale accounts, which are an important issue especially at Sprint and AT&T. Wholesale would account for as much as eight percent market share at AT&T, while wholesale might account for as much as six percent of share at Sprint. Over a few years, it is possible that T-Mobile US might overtake Sprint, as by any accounting the two firms are separated by only a couple share points.
Others might argue that in a few years, Sprint could erode T-Mobile US market share, once Sprint is able to deploy its spectrum advantage, something that might not happen until 2015 or later. Though it is T-Mobile US which is the aggressor in the U.S. market, many have anticipated that Sprint eventually would launch a furious assault of its own, given Softbank’s history in the Japanese market.
Observers might guess that the relative positions of Verizon Wireless and AT&T Mobility are less susceptible to change. Parks Associates consumer data show that almost 50 percent of U.S. mobile phone service customers did not change providers over the last 10 years. In other words, fully half the customer base virtually never changes providers, meaning that all switching behavior is concentrated on just half the total subscriber base.
According to Parks Associates, about 25 percent of respondents changed service providers only once in 10 years. Just 13 percent of respondents switched providers three times or more (about once every three years or so). That suggests the real battle to shift consumer allegiance would be fought over about 13 percent of customers, disproportionately concentrated among prepaid accounts.
Under those conditions, any significant change in postpaid market share will be a stubborn affair.
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