The Mobile Phone Industry's Biggest Problem Just Got Bigger
The United States' wireless carriers have a problem -- they're running out of new customers to target. Data from Pew Research indicates that 97% of Americans already own cell phones. With such saturation, the best that Verizon, AT&T, and T-Mobile can reasonably hope for going forward is swapping subscribers and adding the occasional extra mobile device to an existing customer's account. To this end, the big three names in the business collectively added only a little over 1 million connections to their headcount last quarter, growing their total customer base by a mere one-third of one percent.
The thing is, the industry was arguably lucky to secure that growth. Competition has cropped up from an unlikely source and is making surprising inroads with consumers. All told, these oddball wireless players picked up a total of 700,000 wireless customers that would have otherwise belonged to T-Mobile, Verizon, or AT&T last quarter. And it's not the first time we've seen these newcomers pick off this degree of subscribers, though it is yet another quarterly record.
This unlikely competition? Cable television companies Charter Communications, Comcast, and Altice USA. Given that the nation's cable TV outfits have existing relationships with hundreds of millions of cable and broadband subscribers, the traditional wireless providers like Verizon and AT&T simply can't afford to ignore this paradigm shift any longer.
Source Fool.com
