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April 16, 2014

Tablets Will Play Important Role in Q1 2014 Net Account Additions

Tablets, it appears, will represent a significant portion of net new account gains when mobile service providers report first quarter 2014 results.

Tablets currently account for 40 percent of U.S. mobile broadband connections (ISB dongles, mobile hotspot devices, tablets or embedded PC), and tablets should represent 66 percent of mobile broadband connections by the end of 2015.

Those trends also are important because tablet connections are driving net new device additions in the U.S. mobile market, at least for AT&T and T-Mobile US.

New Street Research predicts Verizon Wireless will find that many of the predicted 485,000 net subscribers for the first quarter of 2014 will be do so to connect their tablets.

AT&T Mobility is expected to add 229,000 net new subscribers in the quarter, again on the strength of tablet accounts.

Sprint probably will lose 247,000 postpaid accounts, but tablet additions will help.

T-Mobile US, which has been showing strong quarterly net additions for more than a year, "could easily add" 1.1 million net new subscribers in the first quarter of 2014. T-Mobile US might be the carrier that adds the greatest percentage of traditional phone accounts.

“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.

By the end of 2015, active mobile broadband devices (ISB dongles, mobile hotspot devices, tablets or embedded PC connections) are forecast to reach 34 million, a nearly 50 percent increase from 2013, according to the NPD Group.

That suggests the average revenue per device will be lower than typically is the case for smartphones, as the cost to add a tablet to a group account typically is lower than the cost to add a phone.

Until the beginning of 2013, USB dongles were the primary mobile broadband devices and most were likely sold to enterprise or business users.

Mobile hotspot devices gained popularity in 2011 and 2012, but both devices have seen substantial declines over the year as more consumers are using the hotspot features on their tablets and smartphones, NPD researchers say.




Edited by Alisen Downey


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