T-Mobile, Cable Wireless Best Positioned for Recession: New Street

New Street isn’t forecasting a recession, but if one happens the firm would be “incrementally more positive on T-Mobile and Cable as the economic weakness would likely drive adds at those operators above our already-bullish expectations,” analyst Jonathan Chaplin told investors Tuesday. “T-Mobile has done incredibly well in the value segment in urban markets, but share gains at the high end of the market have been slower going,” he said. “T-Mobile’s lead in 5G network coverage and performance, coupled with households becoming more price sensitive, should accelerate share gains here.” New Street also sees postpaid plans now as a better value than prepaid, a change over past years. “Competition has driven down the price of postpaid plans, while eliminating barriers to adoption (contracts; credit thresholds),” he said: “Service pricing is now similar and, in some cases, lower for unlimited postpaid plans. When you factor in device subsidies, content, and other features included in postpaid plans, they are a much better value than prepaid.” Chaplin noted AT&T has added subscribers in recent quarters, but a question is how many were from Sprint, following that company’s buy by T-Mobile. “The next test for the industry will be how Verizon and AT&T respond if their net adds suffer, now that the Sprint network integration has largely run its course,” he said.