American wireless operator Verizon is expected to outpace AT&T and T-Mobile for the lead in postpaid subscribers in Q4 2014.
This is due primarily to the telecom operator’s rapidly growing postpaid tablet subscriber base which included two million total postpaid net additions and 1.4 million tablet net additions in Q4 2014.
Verizon will continue to lead AT&T in wireless revenue growth and postpaid subscribers in Q4 2014 and will use this momentum grow its LTE subscriber base in H15, said Eric Costa, telecom analyst, at TBR.
Verizon’s More Everything plans and LTE coverage will draw in new connections including tablets, smartphones and LTE devices onto the shared data plans. However, Verizon’s strong wireless operating margin took a significant hit in Q4 2014, down 600 basis points due to increased equipment costs and SG&A expenses. Verizon usually leads the U.S. market in terms of margins and will need to find ways to reduce expenses to strengthen them in 2015.
Verizon’s Q4 2014 strategy revolved around XLTE, FiOS and More Everything adoption. Overall revenue grew 6.8 percent in Q4 2014 as double digit growth in the wireless segment was partially offset by a decline in wireline revenue.
Verizon will continue to report one of the fastest growing wireless segments in terms of revenue, backed by its market leading postpaid segment. Wireline growth will continue to be driven by the FiOS business, which will soon launch an OTT service to better compete with the larger cable and streaming content providers.
Verizon will enter the OTT video market to drive wireline FiOS revenue growth through the launch of its upcoming streaming service in Q1 2015
The report said Verizon will launch an OTT video service in Q1 2015 that will be initially available exclusively on mobile devices. The service will offer approximately 30 channels and is expected to include programming from the top four major networks: ABC, NBC, CBS and Fox.
Gaining content rights to these top networks will give Verizon an advantage in the OTT market as competing OTT streaming services currently provide limited or no access to programming from these broadcasters.
The service will enable Verizon to compete against upcoming OTT platforms such as Dish Network’s Sling TV service and will help the carrier to combat the threats in cable posed by the potential AT&T / DirectTV and Comcast / TWC mergers.
Verizon will disrupt the traditional pay-TV model backed by its recent string of acquisitions including Intel Media, and EdgeCast. This will enable the operator to cost-effectively deliver TV to any device and broaden its footprint in the video segment through a Cloud TV platform without requiring costly wireline Capex investments in additional infrastructure deployments.