Verizon Best In Wireless Network Quality, Sprint Leads In Improvement

Verizon (NYSE:VZ) has retained its ranking as the best wireless network in the U.S. in the second half of 2014, with AT&T (NYSE:T) again taking second place, according to the latest mobile network performance report by RootMetrics. RootMetrics compiles mobile performance data from a consumer’s point of view, and it covered a total of 288,165 miles conducting over 5.7 million tests across the U.S. for its latest report. According to the report, Verizon is ahead of AT&T in most parameters, including network reliability, call performance, data performance and speed. It scored an impressive 93.9/100 in the overall performance report, leading AT&T by 2.2 points. The only parameter where Verizon lagged behind was text performance, where AT&T and Sprint ranked first and second place, respectively. ^[1]

In addition to highlighting the fierce competition at the top level, the latest RootMetrics report indicates that Verizon and AT&T are still ahead of smaller players T-Mobile and Sprint (NYSE:S) in overall network performance. Although both Sprint and T-Mobile reported improvement in absolute performance compared to the first half of last year, they are a distant third and fourth in the latest report, with scores of 86.6/100 and 84/100, respectively. Interestingly, Sprint leaped ahead of T-Mobile to take third place in the second half of 2014, highlighting the completion of its Network Vision upgrade. With Sprint getting back to positive postpaid subscriber adds last quarter with its innovative offerings and highly competitive pricing, we expect the improvement in network quality to further aid in its turnaround. The clear difference in network quality and data speeds between the bigger and smaller players validates the current trend of the latter trying to lure customers with highly competitive data plans and pricing, while the market leaders continue to focus more on network quality and retaining their high-ARPU (Average Revenue Per User) customers. ^[2]

See our complete analysis for  AT&T | Verizon | Sprint

With T-Mobile and Sprint rolling out several attractive and cost-effective data sharing plans in the last few months and the bigger players following suit, the U.S. wireless industry is poised for another exciting year of competition and innovative offerings. It is important to note that all major players are offering their maximum discounts only on high data usage plans (>20 GB per month), which is likely to entice only a section of the user market. If this particular group of users expects to use more than 20 GB of data, it is fair to assume that they expect good network quality and speed as well. Considering that T-Mobile and Sprint are lagging in most parameters – including network speed, data performance and reliability – in the latest study, customers may be hesitant to switch service providers strictly on the basis of lower costs. Therefore, it is no surprise that all major players have improved their network quality in the last six months -especially Sprint, which gained 17 points (24.4%) over the last report.

We have a $53 price estimate for Verizon, which is slightly ahead of the current market price.

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1. 2nd Half 2014 Mobile Network Performance Report, RootMetrics, Feb 2014 [↩]
2. Midyear Mobile Network Performance Report, RootMetrics, Aug 18 2014 [↩]