A subset of customers gives AT&T, T-Mobile and Verizon renewed hope about growth
AT&T, T-Mobile, and Verizon's unpopular pricing decisions are catching up to them. There are signs that many consumers are opting for alternatives such as cable companies and MVNOs. The Big Three are seeing growth in another area though.
Light Reading reports that the US prepaid market has bounced back after a prolonged period of lull. AT&T , T-Mobile , and Verizon appear to be the biggest beneficiaries. Prepaid plans require you to pay for services in advance. Postpaid customers, on the other hand, pay for services at the end of a billing cycle. Prepaid plans give customers greater control over spending and unlike postpaid plans, they don't leave room for overspending. Generally, consumers who want to save money opt for prepaid plans, which is why they aren't considered as lucrative as postpaid customers.The US prepaid market returned to growth in the first quarter of the year for the first time since Q3 2022.
Verizon gained 137,000 prepaid customers in Q1 and the company expects positive results in the second half of the year as well. Verizon can finally breathe a sigh of relief that it made the right call by purchasing prepaid provider TracFone in 2021. The acquisition earned the company a market share of 33 percent, making it the biggest player in prepaid. This was the first quarter when it saw robust growth.
—Tony Skiadas, Verizon CFO, April 2025 AT&T and T-Mobile also witnessed prepaid growth, with the Big Three gaining a combined 47,000 prepaid customers in Q1 2025. This is a huge improvement over Q1 2024 when the three companies collectively lost 348,000 prepaid customers.
—Hans Vestberg, Verizon CEO Overall, both postpaid and prepaid markets defied expectations in Q1. Analysts at New Street now expect the US wireless industry to gain 1.6 million new customers in Q1.Many analysts had previously forecasted a downturn in growth due to the new administration's immigration policies. However, those fears have so far not materialized.
As for the revival of the prepaid market, MoffettNathanson analysts believe it comes down to two things. First, more new customers are opting for prepaid plans. Second, fewer people are switching from prepaid to postpaid and some are even migrating back.
—MoffettNathanson analysts, May 2025 While data doesn't exist to back this theory up, T-Mobile did show a slowdown in the number of prepaid subscribers moving to postpaid plans, and this could very well be the case for AT&T and Verizon as well.This can be linked to the current economic environment. People tend to go for postpaid when the economy is in good shape, while prepaid attracts more attention when the economic conditions are weak.
Regardless, this is a bright spot for the Big Three, considering they have been experiencing a higher churn or cancellation rate as well as stalling growth. This is also yet another sign of the stranglehold of AT&T, T-Mobile, and Verizon on the wireless market.
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