Have U.S. Carrier Profits Peaked?

Has wireless earnings before interest, taxes, depreciation and amortization (EBITDA) growth in the U.S. peaked? Investment banking firm UBS believes so. However other metrics that drive financial value come into play as well; that’s according to a new report from USB titled “Wireless clouds starting to gather.”

Unlike other developed wireless markets around the world, the U.S. has seen dramatic growth in EBITDA per POP over the past six years, despite the fact that the industry has essentially gone from a two player market to a four player market with the emergence of T-Mobile and Sprint as competitive factors. UBS believes this will begin to impact the financials in 2017.  

Over the past two years, wireless EBITDA growth has generated more than 100 percent of consolidated EBITDA growth for the four nationals. “Our models reflect 3 percent industry EBITDA growth in 2017, driven by T-Mobile and Sprint while wireless EBITDA remains flattish at AT&T/Verizon (implying the majority of consolidated EBITDA growth is coming from the wireline and other segments, which may prove to be too optimistic),” writes analyst John Hodulik. Continue Reading