Investment banking firm Merrill Lynch said it expects the wireless industry’s five nationwide operators to post a 4.5-percent year-over-year improvement in gross subscriber additions during the second quarter driven by continued strong growth of family plans.
Individually, Merrill Lynch said it was raising its second-quarter customer growth guidance for Verizon Wireless at the expense of larger competitor Cingular Wireless L.L.C. and was maintaining guidance for the other national carriers following visits to more than 80 retail stores in four markets during May and June.
Verizon Wireless is forecast to add 1.6 million net subscribers during the second quarter of this year-compared with Merrill Lynch’s previous 1.5 million net customer additions guidance-and garner about 34 percent of customer growth during the quarter. Merrill Lynch added that it expects Verizon Wireless’ strong growth to be bolstered by a low 1.3-percent monthly churn rate.
“We have not observed a slow down in Verizon Wireless’ share since the acquisition by Cingular of AT&T Wireless [Services Inc.] closed,” explained Merrill Lynch analyst David Janazzo in a research report. “Anecdotally, if customers leave Verizon Wireless, it is often because they are looking for an international plan.”
Citing a slow down in migrating AWS customers and slower prepaid growth, Merrill Lynch cut its customer growth guidance for Cingular from 1.3 million net additions to 1.2 million net additions. The revision also included an increase in customer churn guidance from 2.2 percent to 2.3 percent.
Merrill Lynch said it was maintaining its previous guidance of 900,000 net customer additions for T-Mobile USA Inc., and 500,000 net customer additions for both Sprint Corp. and Nextel Communications Inc.
