JPMorgan Dissects 3Q Wireless Trends

From Analyst Mike McCormack
AT&T and Verizon both increased their share of gross adds in 3Q08, at the expense of Sprint and T-Mobile. AT&T took the largest portion, driven by strong sales of the iPhone, and outpaced Verizon's postpaid net adds for the first time in three years. However, data growth is slowing at AT&T and Verizon; sequential growth was down approximately 100 bps in each of the last two quarters. Margins at AT&T saw a particularly large decline due to heavy iPhone sales, which carry higher subsidies. Sprint continues to experience margin pressure due to significant subscriber losses and deteriorating ARPU. Leap and Metro have been steadily growing their share of the prepaid market, relative to the competing offerings from the national carriers.