Blog Post

This week’s AT&T and Verizon results hint at the coming M2M world

Stay on Top of Enterprise Technology Trends

Get updates impacting your industry from our GigaOm Research Community
Join the Community!

Updated:The nation’s top two carriers managed to add 3.4 million new subscribers in the second quarter of 2011 in an almost-saturated mobile market. For that, they should thank your car, your iPad(s aapl) and whatever other connected device you might have floating around. Verizon today reported its financial results including the addition of 2.2 million subscribers, bringing its total subs to 106.3 million. For mobile operators in a market where just about everyone has a cell phone, their growth options are limited, especially if they don’t want to start competing aggressively on price. They can sell new subs for more wireless broadband devices and they can boost the overall customer bill, likely by upgrading folks from feature phones to smartphones.

Verizon (s vz) has room to grow in both areas. It has a smaller base of smartphone customers at 32 percent when compared to AT&T (s t), with half of its customers already using smartphones, and it also has an LTE network that’s been deployed for a third of the population for over half a year. While Verizon does not break out the number of connected devices it added during the quarter — about 40 percent of its new adds came from wholesale and other connected devices. Update: A Verizon spokeswoman confirmed that the majority of that 40 percent were for vehicle tracking, telematics and M2M connections. AT&T on Thursday reported a similar percentage of connected devices as new subscribers at about 30 percent.

So as faster networks roll out and more folks pick up tablets, connected vehicles, broadband-enabled pedometers and whatever else the market throws at them, watch for the second wave of telecom growth. The subscriptions for connections will be less, dragging down the average revenue per user, but on yesterday’s earnings call AT&T’s John Stephens, Senior Executive Vice President and CFO, said these were, “very profitable.”

2 Responses to “This week’s AT&T and Verizon results hint at the coming M2M world”

  1. primate

    Any feeling on why these M2M connections are “very profitable?” Is it lower BW? More stable/consistent traffic? Less signaling?


  2. M2M Traffic is on the Rise at last. The coming of the Dead Zone as prophesied!!!! Voice Telecom Networks empty of traffic as AT&T, in a bid to make more revenue, connects more devices that use Data Networks to communicate than people making voice calls on the GSM or CDMA Voice networks!!!! Spectrum reserved for Voice Telecom will have to be reused for more M2M (EDGE and GPRS!!) or just reuse the spectrum altogether!!!!