US carrier wars cut wireless costs
(BI Intelligence)
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The aggressive unlimited price war between the top four US wireless carriers is the key culprit driving an overall decrease in the cost of wireless services for consumers, according to FierceWireless.
In April, the cost of wireless services declined 13% year-over-year (YoY), the largest percentage decline in 16 years, according to the US Labor Department.
The sharp decline of wireless services revenue is symptomatic of the fierce competition that is upending the wireless industry. US wireless carriers are locked into an aggressive price war that's changing the way the mobile industry operates. Led by T-Mobile and Sprint, Verizon and AT&T have been forced to follow suit, implementing their own unlimited pricing schemes.
AT&T added an unlimited plan for its DirecTV subscribers in January 2016. This gave the carrier’s DirecTV subscribers access to unlimited data streaming.
In February 2017, Verizon, the largest telecom in the US, was the last of the big four telecoms to add an unlimited data plan. The company had previously stopped offering unlimited deals in 2011.
And the battle is likely far from over:
In an effort to maintain its mantle as the “Uncarrier,” T-Mobile has gone all-in on unlimited data plans. The company introduced the unlimited T-Mobile ONE in September 2016 as its only plan, stripping away all other data plans.
Meanwhile, Sprint recently introduced a new unlimited plan that drastically undercuts the other carriers. For the next year, Sprint customers can get the first line of unlimited data for $50, the second for $40, and the remaining lines for free, Wave7 Research notes.
There's some concern that these competitive models might be unsustainable. US smartphone owners are consuming data at an exponential rate. By the end of 2017, the average data consumption in the US is likely to cross 6 GB per month, Chetan Sharma Consulting notes. At the same time, the average revenue per user (ARPU) for three of the top four carriers declined YoY. T-Mobile is the only US mobile operator that has managed to increase the revenue it squeezes from customers, with ARPU for postpaid phones growing 3% YoY. On the other hand, combined postpaid ARPU for Verizon, AT&T, and Sprint fell roughly 6% YoY, according to BI Intelligence estimates.
Cloud computing — on-demand, internet-based computing services — has been successfully applied to many computing functions in recent years.
From consumer-facing, web-based productivity apps like Google Docs to enterprise database management suites, the tools businesses rely on are increasingly moving to the cloud.
But developing a cloud strategy is no easy task. Public cloud solutions will likely come to dominate the market over the next decade, but business constraints, such as security concerns and the limitations of existing infrastructure, make it difficult for companies to fully adopt the public cloud right now.
That means that hybrid clouds, in which multiple cloud implementations (including public and private) are connected, will remain popular for the time being, at least until these constraints are addressed. The tech giants that dominate the IaaS market — Amazon, IBM, Microsoft, and Google — are constantly expanding their offerings to address current business constraints as they compete for market share.
BI Intelligence, Business Insider's premium research service, has compiled a detailed report on cloud computing that evaluates the current business considerations for the various cloud solutions and provides an outlook on the state of the market.
Here are some of the key takeaways from the report:
Cloud computing solutions have gained traction because they're flexible and cost efficient. Sixty-seven percent of companies used an Infrastructure-as-a-Service solution in 2015, like the cloud, for some part of their business, up 19% from the prior year.
All cloud solutions provide certain benefits that are becoming increasingly essential to businesses in the digital age. These include on-demand self-service, rapid elasticity, and broad network access, among others.
Security needs, demand predictability, existing infrastructure, and maintenance capabilities are key business considerations for enterprises choosing between cloud implementations.
While hybrid cloud strategies will remain popular in the near term, the market is likely to shift toward the public cloud over time. That's because costs are falling, providers are developing solutions that address main concerns with the public cloud, and business practices like agile development and data analytics are dependent on advantages the public cloud provides. However, industries that handle sensitive information, like financial services and healthcare, will likely prefer hybrid and private cloud strategies given regulatory restrictions.
Amazon Web Services is the dominant cloud computing provider by market share, followed by Google, IBM, and Microsoft. Because the latter three companies have had little success taking on Amazon, market-share gains are likely to come at the expense of smaller competitors.
In full, the report:
Explains the different cloud computing strategies and benefits of cloud computing.
Evaluates key business considerations – security needs, demand predictability, existing infrastructure, and maintenance capabilities – for enterprises choosing between cloud implementations.
Provides and outlook for trends and major players in the cloud computing market.
Interested in getting the full report? Here are two ways to access it:
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