Wireline Continues to Grow in US Wireless While Established Carriers Create New Markets

Between the growth of wireline MVNOs and the explosive growth of licensed IoT wireless connections, the telecom market is continuing to undergo some fascinating shifts.

In the ever-evolving landscape of telecommunications, a seismic shift has occurred over the past few years as wireline companies explosively entered the wireless market. What once seemed like a plot twist has evolved into a dynamic convergence of industries that were once distinctly separate. 

To unravel these ongoing developments, we revisited the quarterly reports of major US carriers, which show that wireline’s footprint in the wireless market, while still relatively modest, is expanding at an impressive pace. In the second half of 2023, wireline carriers Altice, Charter, and Comcast continued their previous pattern of rapid growth in wireless subscribers, growing their combined subscriber base 35% from Q4 of 2022 to Q4 of 2023.

This expansion into wireless services represents a necessary strategic pivot for the big cable companies as US consumers continue to get rid of cable TV in favor of streaming services. Additionally, wireline companies have been able to use bundling of services to drive accelerated growth of their wireless base. Meanwhile, the Big 3 telecom providers have seen much more modest growth in their wireless base.

However, as the totals reported by the Big 3 include both mobile phone connections and other non-phone (IoT) devices, looking at the total number of wireless subscriptions only gives us part of the story.

So, what trends does this additional data show?

AT&T leads in total wireless subscriptions, but lags in mobile phone subscriptions.

In looking only at cellphone connections, Verizon comes out on top, with 5.3 million more than their closest competitor (T-Mobile), and 20.8 million more than AT&T. What’s striking is that AT&T’s total wireless base (see graph above) is nearly 1.5 times that of T-Mobile, yet they have more than 15 million fewer phone subscribers.

The reason for this is a radical difference in strategy; AT&T’s 127.7 million IoT connections make up more than half of their total wireless base. That’s nearly twice the number of Verizon’s IoT connections — 66 million, or about one third of their total wireless base. And it’s close to three times the number of T-Mobile’s IoT connections (43 million), which make up about a quarter of their base.

The reason for AT&T’s vast lead? An ongoing strategy to invest in connected cars, roads, and highways. As of 2022, there were 60 million cars connected to AT&T’s network, and the company has only continued to make investments in this area. In November of 2023, AT&T launched new ​“affordable in-car wi-fi plans”, and leading up to this year’s CES, Cameron Coursey — AT&T Vice President of Connected Solutions—said that AT&T was ​“building…the 5G [Standalone] capabilities that will launch in cars in the 2025 timeframe.” It’s unsurprising, then, that AT&T is leading the way both in IoT subscriptions and IoT growth — 19% in 2023, compared with only 5% growth in phone subscriptions. 

However, Verizon and T-Mobile also achieved double-digit growth in IoT. Verizon saw double-digit growth of 11% in IoT connections, which may be related to the July 2023 launch of a new global eSIM platform aimed at increasing the reach of its IoT services. While T-Mobile, which has been focusing on the utility of IoT for the clean energy sector, grew its IoT base by 12% while also growing phone subscribers by 7%.

This makes for an interesting contrast with the expansion of wireline MVNOs into the wireless space — while the cable companies are expanding their presence in the wireless market, AT&T and Verizon are building an entirely new market.

Charter’s Spectrum Mobile continues to dominate in wireless growth, Comcast leads cablecos in total subs, and Altice comes in a very distant third.

Charter’s newly released Q4 numbers show that Spectrum Mobile continues to outpace Comcast with a growth rate in wireless subscriptions nearly twice that of Comcast. Additionally, Charter continues to lose cable subscribers at a much smaller rate.

Currently, Comcast still has 1.1 million more wireless subscribers (7.8 million compared to Charter’s 6.6). However, if Charter manages another year of similar growth, they may be on track to exceed Comcast’s numbers by early 2025. (Altice, meanwhile, hadn’t broken 300,000 subscribers by Q3 of last year.)

Yet, as exciting as this growth is, the 14.6 million wireless subscriptions held by the biggest wireline companies still make up only 3% of the mobile phone subscriptions held by telecom’s Big 3, and represents only two-thirds of AT&T’s 21.6 million new IoT subscriptions.

So, while US wireline companies might be succeeding at poaching some wireless subscribers, with the traditional carriers finding new revenue streams and opportunities, it’s still anyone’s game.