CHICAGO--(BUSINESS WIRE)--According to Fitch Ratings' latest telecom special report released today, Verizon Wireless and AT&T Mobility captured additional share in the first half of 2011 by adding 2.6 million postpaid subscribers compared with a loss of 1.6 million for the other three largest postpaid players. This continues the trend of the past two years where the Big Two added 13.9 million postpaid subscribers compared to a loss of 6.1 million subscribers for T-Mobile, Sprint Nextel and U.S. Cellular.
During that same period, the industry share of EBITDA generated by Verizon and AT&T increased by approximately 500 basis points to 80%. The dominant market share, higher margins, and good FCF of Verizon and AT&T currently position the companies to capture additional share and future growth taking advantage of the rapid uptake of data services and innovative devices to grow at higher rates. The rest of the industry remains constrained with lower margins, either capital and/or spectrum restrictions, or must evaluate efficient build scenarios through sharing agreements to remain competitive, which could pressure credit profiles.
The Department of Justice complaint against AT&T's acquisition of T-Mobile causes some additional uncertainty regarding merger approval. Fitch believes this creates an opportunity for the government to extract a greater level of concessions to address competitive and antitrust concerns. Blocking the merger and having T-Mobile's business potentially deteriorate considerably more would only highlight the company's ineffective lower priced value strategy and weak competitive position.
The special report 'U.S. and Canada Biannual Wireless Metrics: Gap Widens Between the Haves and Have-Nots' is available on Fitch's web site at 'www.fitchratings.com'.
Additional information is available at 'www.fitchratings.com'.
Applicable Criteria and Related Research: U.S. and Canada Biannual Wireless Metrics: Gap Widens Between the Haves and Have-Nots
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=651063
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