Vodafone’s planned exit from Verizon Wireless for around $130 billion is raising questions marks about the viability of the U.S. wireless market in the long term.

The exit of Vodafone may be due to its lack of interest in continuing with a foreign partner in the U.S. But the American telecom market is giving less confidence due to competition and lack of opportunities to expand and find new users.

But there are investors like SoftBank which invested $21.6 billion to buy Sprint and posed challenges to existing telecom operators. ( SoftBank close to buying Sprint, Sprint to acquire Clearwire )

TelecomLead.com analyzed two wireless operators in the U.S. — Verizon Wireless and AT&T.

AT&T

AT&T’s wireless revenue rose to $17.29 billion in Q2 2013 from $16.69 billion in Q1 2013; $17.64 billion in Q4 2012; $16.63 billion in Q3 2012; $16.35 billion in Q2 2012; $16.13 billion in Q1 2012 and $16.69 billion in Q4 2011. Revenue fluctuates – one of the main reasons to become nervous in the telecom industry.

Look at AT&T income from wireless business during the same period. Its wireless income is almost steady in the last two quarters. AT&T wireless income was flat at $4.65 billion in Q2 and Q1 2013. In Q4 2012, AT&T wireless income was $2.54 billion; $4.45 billion in Q3 2012; $5.05 billion in Q2 2012; $4.47 billion in Q1 2012 and $2.58 billion in Q4 2011.

AT&T is not giving rosy picture about wireless customer growth as well. AT&T wireless user base rose marginally to 107.8 million in Q2 2013 from 107.2 million in Q1 2013; 106.9 million in Q4 2012; 106.9 million in Q3 2012; 105.8 million in Q2 2012; 103.9 million in Q1 2012 and 103.24 million in Q4 2011.

Verizon Wireless

Verizon Wireless, in which Vodafone holds 45 percent stake, is also not in a healthy situation. In the six quarters, Verizon Wireless posted single digit growth in wireless revenue. But its net income was in double digits.

Verizon Wireless revenue $19.97 billion in Q2 2013; $19.52 billion in Q2 2012; $19.99 billion in Q4 2012; $19.02 billion in Q3 2012; $18.57 billion in Q2 2012; and 18.27 billion in Q1 2012.

The telecom giant which will increase its stake to 100 percent in Verizon Wireless posted operating income of $6.46 billion in Q2 2013; $6.41 billion in Q1 2013; $4.79 billion in Q4 2012; $6.04 billion in Q3 2012; $5.71 billion in Q2 2012; and $5.21 billion in Q1 2012.

At present, telecom revenue forecasts are not giving any strong indication about substantial increase in the wireless revenue in the U.S.

But operators are betting on 4G in the U.S. ( T-Mobile’s LTE and Un-Carrier strategies to pay off in 2014 ). Hope there will be better options available to Vodafone than the U.S. Currently, industry analysts are speculating about Vodafone’s plans to invest further.

Baburajan K
[email protected]