Verizon vs AT&T, T-Mobile and Sprint subscriber and profit margin charts paint it red

Verizon vs AT&T, T-Mobile and Sprint subscriber and profit margin charts paint it red
Buoyed by all the noise around Sprint's merger with T-Mobile, one could easily lose sight of the big picture, namely that the big two carriers still hold the lion's share of industry profits. Even if T-Mobile ties the knot with Sprint in the end, the combined carrier will still be smaller than Verizon or AT&T in terms of subscribers and revenue.

If you want to know how did the big four mobile carriers do in the last quarter, look no further than the research firm Morgan Stanley's report that ranks Verizon, AT&T, T-Mobile and Sprint by subscribers, net adds (including the valuable postpaid segment), and the total postpaid churn rate that crudely shows how satisfied the users are with the respective carrier.


That same churn rate is down for the big two - Verizon and AT&T - way lower than at Sprint or T-Mobile. Big Magenta, however, showed the biggest increase in the valuable postpaid adds of all four major carriers. T-Mobile used to be in a price war with them all, but now it's gotten its prices on par with its Verizon nemesis, yet it remains everyone's popular underdog of a carrier. We recently compared the new unlimited plans of the big four, and there is indeed very little difference in pricing now, save for Sprint, which, however, has some catching up to do when it comes to coverage outside of large cities.

As you can see from these latest Q2 stats, even when combined, Sprint and T-Mobile will be trailing the second AT&T at quite the margin, but hopefully, if the merger goes through, it will mean a litany of deals and discounted plans so that the new T-Mobile can carve extra market share for itself with the savings of scale it can achieve after the deal. 

That's all fine and dandy, but it's Verizon that laughs all the way to the bank, with 68% earnings margin before taxes and depreciation, followed by Sprint and AT&T, with T-Mobile coming last to the profit margin party. Someone has to pay the price for that breakneck expansion, after all. In numbers, that's $4.12 billion added to Verizon's cash pile. 

Of note, however, is that the promised capital expenditure at Sprint is in full bloom, and the carrier invested only slightly less than Verizon in its future this past quarter. AT&T, in its turn, can boast with the highest average revenue per user, squeezing every last buck out of its base.


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4 Comments

1. mike2959

Posts: 696; Member since: Oct 08, 2011

Post paid churn. That’s the indication of quality of network. Speed. T-MOBILE gets customers but they leave quick.

2. Foxgabanna

Posts: 607; Member since: Sep 11, 2016

T-No No.

3. tbn27

Posts: 15; Member since: Sep 14, 2016

Doing a compare and contrast, the numbers chart looks different and seems exaggerated than what they are saying

4. ShadowHammer

Posts: 208; Member since: Mar 13, 2015

So, can someone please enlighten me what the churn rate numbers are showing? Between the top three, the difference in churn rate is 0.11%. One tenth of 1% doesn't sound like a big difference to me. I.e., the churn rates are quite comparable. Those numbers are particularly interesting when you consider how different the Postpaid Adds numbers are. T-Mobile had 3-12 times the Postpaid Adds of the big two, yet had pretty much the same churn rate. That suggests that T-Mobile is keeping a lot of those Postpaid Adds.

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