Will Tablets Drive Next Wave of U.S. Mobile Net Adds?

Opinions about growth prospects in the U.S. mobile market now are sharply split, with T-Mobile US crediting its U.S. operations for overall Deutsche Telekom growth, while AT&T talks about expanding in Europe.

In buying out the Vodafone stake in Verizon Wireless, Verizon has put its money on revenue growth in the U.S. market, as has SoftBank, in buying Sprint.

Deutsche Telekom in the third quarter of 2013 generated revenue of EUR 15.5 billion, six percent more than in the prior-year period, and the only operating region with positive revenue growth was the United States, where revenue grew EUR 30.5, compared to a loss of EUR 1.2 billion in Germany and a loss of EUR 6 billion for the rest of Europe.

T-Mobile US gained more than a million customers net between July and September 2013, resulting in a revenue increase, in euros, of more than 30 percent. Measured in U.S. dollars, the increase was as much as 38 percent, Deutsche Telekom says.

T-Mobile US also has revised its customer forecast upwards for the second half of 2013. The Company now expects to gain 1.6 to 1.8 million new branded contract customers, instead of the previous estimate of 1.0 to 1.2 million.

In other words, the rate of T-Mobile US customer additions is increasing. What is not so clear is how many of the net additions will be phone customers, and how many represent tablet connections.

At AT&T, net new tablet connections already are driving most of the net postpaid customer growth. “Connected devices” (tablets, principally) drove net mobile additions at AT&T during the third quarter of 2013, as did U-verse broadband services in the fixed network segment.

AT&T added nearly one million net mobile subscribers, including 63,000 mobile postpaid accounts and 192,000 prepaid accounts.

But connected device net adds were 719,000, or 73 percent of net additions.

Verizon Wireless added 1.1 million net retail connections, including 927,000 net retail postpaid connections in the third quarter of 2013. It isn’t clear how many of those connections reflect tablet connections, rather than phone connections.

Still, with T-Mobile US gearing up a tablet initiative, the percentage of T-Mobile US net adds is going to shift in the direction of tablet accounts.