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Despite big investments, carriers are increasingly locked in price wars that erode average revenue per user and increase churn
In the latest episode of Unmuted, Peter Adderton, founder and CEO of MobileX, described the U.S. mobile business model as one in which spending increases every year while less differentiation is delivered to consumers. He noted that U.S. operators continue to invest tens of billions of dollars annually in their networks, pointing to roughly $18–20 billion in annual capital expenditures at AT&T and Verizon, and around $10 billion at T-Mobile US. Yet despite that investment, carriers are increasingly locked in price wars that erode average revenue per user and increase churn.
“[Their] plan today is roughly the same… as… they had before, where they basically bundled text, minutes, and data. They haven’t changed. They haven’t innovated; I don’t think they know how to,” he said. “It’s a concern for them because if you’re spending that amount of money having to keep up the network every year… and your strategy is to lower the prices, at some point it breaks. I think that they’re going to have to start looking at ways to innovate.”
Adderton also argued that much of the industry’s messaging around 5G, AI, satellite connectivity, and now early 6G discussions serves more to distract than to deliver tangible consumer benefits. Despite years of hype around transformative use cases — from autonomous vehicles to remote surgery — most consumers experienced little noticeable change moving from 4G to 5G, he said.
He continued: “The average consumer felt no difference between 4G and 5G, right? And so, yeah, these things are designed to show, I think, more investors that, ‘hey, look, we’re investing this $17 billion, $18 billion in our networks to be able to get 5G’… But if you look at their go-to market and their strategy, they’re all pushing 5G, but you know what they’re pushing harder than 5G? Price reduction.”
In Adderton’s view, smaller virtual operators can play a growing role by innovating at the service and pricing layer rather than trying to replicate the infrastructure-heavy model of national carriers. Over time, he expects operators to increasingly rely on third-party brands to acquire customers more efficiently than they can themselves.
Looking ahead, Adderton believes traditional carriers face a difficult reckoning. Despite past efforts to rebrand as “techcos” or expand into media and adjacent services, he argues that mobile network operators are steadily becoming commodity connectivity providers — while value and trust shift elsewhere.
