In 2020, U.S.wireless traffic grew only 14% by far the lowest rate at least in a decade. Growth in 2019 was only 30%. Traffic growth worldwide has been falling for years. 40% and 50% growth rates are now long gone.
Technology continues to advance rapidly, especially MIMO and Massive MIMO. Verizon and AT&T estimate a 40% annual improvement in capacity. The gap between what they can deliver and what they can sell is getting much wider.
Demand for new cells also plummeted. Only 22,000 were added in 2020, less than half the number in 2019. Nearly all were small cells. Very few towers are going up. Crown Castle, with the most small cells, just cut its 2021 plans from 10,000 to 5,000.
I've asked CTIA if they will share 2021 data. My guess is that demand is better because people get out more. But there's little data.
Excess capacity is driving the industry
T-Mobile has just cut the prepaid price to $15 + fees. It includes 2 gigabytes of data, enough for many who don't watch much video away from home. For $25 prepaid, you get unlimited 5G and a credit that may be enough for a Samsung 32 5G phone, depending on trade-in.
In most of the U.S. carriers have so much spare capacity that the effective cost of adding a customer approaches 0. Predictably, Verizon and especially T-Mobile are aggressively promoting fixed wireless.
The $30 broadband subsidy will almost certainly be enough to cover a robust fixed wireless offering from the major carriers. The price is currently $50, which is starting to win customers from cable. That's massively profitable; with strong competition, it will plummet.
So far, prices haven't come down on the primary product, postpaid monthly service. They are spending money on promotion, with AT&T offering a near-free iPhoneAnalyst Craig Moffett sees an effect as well. "Competitive intensity in the wireless industry appears poised to get worse. ... the wireless industry a less-good business over the long term
France shows what truly competitive pricing would be. An excellent unlimited plan costs 20 euros, about $24.