Telecom retail is healthy 

By: Jeff Moore, Principal, Wave7 Research December 9, 2024

Collected at: https://www.rcrwireless.com/20241209/analyst-angle/telecom-retail

During the spring of 2020, many telecom stores closed temporarily amid the spread of the coronavirus. Wave7 Research in late March 2020 reported that “an estimated 55% of national carrier stores have been closed, including 75% of Sprint stores and 80-90% of T-Mobile stores. Verizon and AT&T discouraged customers from casual shopping at their stores. Apple stores and Best Buy stores were closed, with Best Buy only doing curbside service. Some observers called telecom retail into question.

Prepaid store count increasing

Wave7 Research this summer reported that the number of carrier prepaid stores actually grew during the first half of this year, growing by 114 from the level of late 2023. The number now exceeds 15,000. This is the total number of stores of the top four prepaid retail brands: Metro by T-Mobile, Cricket Wireless, Boost Mobile and Total Wireless.

Total Wireless has been rapidly opening stores since late 2022 and now has roughly 1,000 stores open. David Kim, the chief revenue officer for Verizon Value Brands, recently spoke about the aggressive launch of Total Wireless stores. Speaking at the All Wireless & Prepaid Expo in August, he said that three Total Wireless stores were opening per day.

For full context, the number of Metro by T-Mobile, Cricket Wireless, and Boost Mobile stores has been slipping, but only modestly. Their falling store counts have been outweighed by the aggressive launch of Total Wireless stores.

Postpaid store count falling modestly, but cablecos have gained a wireless presence

The number of postpaid stores has been falling, but not at a dramatic pace. The count of Verizon, AT&T, and T-Mobile stores as of mid-2024 was approximately 17,600, down from 18,500 in mid-2023. All three carriers have been reducing their store counts, although T-Mobile in recent years has been launching stores in many small cities and towns that previously did not have T-Mobile stores.

The four top cablecos — Comcast, Charter, Altice USA, and Cox Communications — together have roughly 1,500 stores, with Comcast and Charter accounting for most of these. Before 2017, these carriers did not sell wireless service. Also, many cableco stores have been improved in recent years, going from obscure locations to more upscale locations and many of these stores also have been upgraded to have a more modern look and feel.

There are also more than 7,000 multi-carrier prepaid dealer stores, per Wave7 Research estimates. Simple Mobile is sold at most of these stores, but other brands with a broad presence at these stores are H2O Wireless, Ultra Mobile, Verizon Prepaid, AT&T Prepaid, and T-Mobile prepaid.

Growth of national retail, Best Buy aside

Best Buy has guided to closures of 10-15 stores this year and T-Mobile is no longer sold there. The retailer has fewer personnel focused on wireless sales than it had a few years ago. The amount of floor space devoted to wireless has declined. That said, I recently tweeted about the opening of a new Best Buy store in Bozeman, Montana.

Walmart operates 3,558 Supercenters, up by ten stores from last December. NBC News reported in January that Walmart plans to build or expand 150 Supercenters over the next five years. Most Supercenters have third-party reps who are focused on wireless sales, with a primary focus on postpaid sales. These reps have sales quotas and our checks indicate that these reps are frequently achieving their sales targets.

All three postpaid carriers are sold at Walmart, as are many prepaid brands, including Straight Talk, which is only sold at Walmart. Straight Talk alone had 9.7 million subscribers as of late 2020.

Costco has 622 U.S. stores and each store has a kiosk that is operated by AT&T or T-Mobile. Four Costco stores have opened over the past three months and three more are slated to open by February.

Target also has a growing U.S. store count that is approaching 2,000. Many prepaid brands are sold there, with some only selling SIMs there. AT&T has third-party reps that sometimes set up tables and pitch AT&T to Target customers.

Traffic has been up strongly in recent months at Costco and Sam’s Club, based on data from Placer.ai, relative to traffic a year ago.  The data also indicated growth during most recent months at Walmart, while traffic trends at Target have been mixed.

The scope increases as carrier stores now sell internet

Fixed wireless nternet sales have been a tailwind for carrier retail. Between them, T-Mobile and Verizon now have more than 10 million fixed wireless subscribers. AT&T now has nearly 500,000 fixed wireless subscribers.

This has been expanding. On November 8, I tweeted about the launch of AT&T Internet Air sales at many Cricket Wireless stores. This year, T-Mobile launched sales of T-Mobile Home Internet at Sam’s Club and many Costco stores. T-Mobile operates a kiosk at nearly all 599 Sam’s Club stores. Straight Talk Home Internet is sold at many Walmart stores.

SummitX 2024 telecom conference by iQmetrix

Many of the leaders of North American telecom retail gathered in Scottsdale, Arizona in October for SummitX 2024, which was hosted by iQmetrix. iQmetrix is a company that provides point-of-sale solutions to telecom retailers. Many wireless dealers were present.

One highlight from the conference was the iQmetrix Telecom Industry Address, where iQmetrix executives details the top five megatrends for telecom retail, as detailed here. The company cited data from GSMA showing that relative to other forms of retail, telecom customers are more likely to prefer to shop in a store than online. I agree with this completely, as spending up to $1,000 or more for a smartphone that will be used for hours each day is an important decision. The expertise of carrier reps is very helpful with this decision. Also, the purchase of a smartphone is often accompanied by related purchases, such as device insurance, accessories, tablets, smartwatches and maybe home internet service.

SummitX 2024 was an excellent conference. Heisman Trophy winner and former NFL quarterback Tim Tebow was a keynote speaker. My talk, “The State of U.S. Wireless Retail in 2024,” occurred shortly after Tebow spoke and a recent tweet about this is here.

Summary: Telecom retail is healthy

Telecom retail is healthy. The number of prepaid stores has been growing. The number of postpaid stores is slipping, but the pace of this is gradual and it has been accompanied by the launch of 1,500 cableco stores where wireless is sold. National retailers are growing and getting stronger traffic. It was good to get part of the telecom retail ecosystem under one roof at SummitX 2024 to work together for solutions to strengthen telecom retail.