US wireless subscriber growth declines sharply

America’s mobile-phone market is showing signs of maturity as operators focus on raising revenue generated by existing customers.

According to a new report from Dow Jones Newswires, the four biggest mobile-phone operators in the US signed up just 405,000 contract customers in the second quarter of the year, less than a half the number they acquired during the same period of 2011.

With penetration now topping 100%, operators are finding it harder than ever to attract new business.

Instead, they are looking to make more money from existing customers by selling them expensive smartphone devices that come with pricy data-usage tariffs.

AT&T, for example, had persuaded 62% of its wireless customers to buy smartphones by the end of June, according to the Dow Jones story.

Even so, as smartphone penetration rises, the emphasis will be on capturing market share, a battle that Verizon appears to be winning with 41.8% of contract customers served by the big four, compared with 32.8% for AT&T. Smaller rivals Sprint and T-Mobile USA had second-quarter shares of 15.4% and 10% respectively, but have both lost ground over the past six quarters.

The conversion to smartphones under way among the US population is reflected in strong earnings reported by AT&T and Verizon. For the second quarter, Verizon reported a 15.8% growth in earnings before interest, tax, depreciation and amortization (EBITDA), to $7.7 billion.

Interestingly, while overall average revenue per user (ARPU) has grown, as customers have flocked to more expensive smartphone packages, operators are not reporting increases in ARPU from existing smartphone customers.

One trend that has benefited operators is a move from contracts to prepaid deals by low-usage customers who are more profitable for their service providers on pay-as-you-go packages.

One explanation for the especially weak subscriber gains last quarter is that consumers are delaying purchases until the second half of the year in anticipation of a new iPhone launch.

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