Wednesday, September 21, 2016

Comcast Might Get 12 Million Mobile Accounts in First Few Years

In the early going, Comcast is likely to snag about three percent market share, or about 12 million accounts. That is based on Comcast getting about 10 percent mobile market share in the areas where it actually operates its fixed networks.

Eventually, Comcast theoretically could get 20 percent share of the whole market, but likely not unless it acquires either T-Mobile US or Sprint.

So here’s the thinking.

In the first quarter of 2016, the leading U.S. mobile providers had about 393 million branded mobile accounts in service, with Verizon having 138 million, AT&T 130.4 million, T-Mobile US 65.5 million and Sprint 58.8 million.

For the sake of argument, if Comcast were to grab about 10 percent share in the first few years, that would represent about 39 million accounts.

Eventually, if Comcast gets 20 percent share, that implies something on the order of 79 million accounts.

There are many contingencies. Comcast says it will first concentrate on selling services to its own customer base. Since Comcast networks pass only about 30 percent of U.S. homes, that essentially limits the addressable market to some fraction of the total market.

So if Comcast gets 10 percent of mobile customers in its own areas, that might equate to some 12 million accounts. To get to 20 percent share of the whole U.S. market, Comcast almost certainly would have to acquire either Sprint or T-Mobile US.

There are, of course, many unknowns. Some believe it is inevitable that Comcast buys T-Mobile US. Some new entity, with marketing muscle and assets, could enter the market and buy Sprint or T-Mobile US.

Dish Network somehow could find a partner to help it build and operate its own network, complicating the market share possibilities even further.

Some believe Sprint and T-Mobile US will try to merge, again.

You can make your own guesses about which competing mobile service providers will be hurt the most, as Comcast enters the market.

In the second quarter of 2016 Verizon had 35 percent share. AT&T had about 32.5 percent share. T-Mobile US had about 16 percent share, while Sprint had about 15 percent share. All other mobile suppliers collectively had about two percent share.

If Comcast were to take share equally, from all the four leading providers, Verizon would lose the most customers. Few likely believe that will be the case. Assuming Comcast enters the market with a low price positioning, it is likely to compete more with Sprint and T-Mobile US.

AT&T, by virtue of its subscriber mass, and its relatively greater loss of subscribers to T-Mobile US, might also be affected more than Verizon.

U.S. Mobile Operator Subs, Q2 2016 (retail and wholesale)
Subscribers (millions)
Net Adds (millions)
Service Revenue
(US$ millions)
Verizon Wireless
T-Mobile USA

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