2025 US Telco Trends: Amidst Bundles and Price Freezes, Could Super Segmentation Help?

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Three-year guarantees. Five-year freezes. Service SLAs and compensation for failure to deliver. If you’ve been following the US telco market, you’ve likely noticed multiple moves like these made by major mobile network operators (MNOs) aimed at providing greater price certainty.

These moves reflect a telco market in defensive mode, coupling price freezes with an increasing emphasis on bundling. 

However, with many providers also freezing prices and offering equally complex bundles, telcos still need to stay one step ahead in terms of differentiation. With digital natives becoming more diverse, rapidly testing and deploying sub-brands to find profitable micro consumer segments could help telcos escape the commoditization trap.

But first, we need to ask: What has been driving US telcos to focus on bundling and offering price certainty?

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US Market Context: Saturation, Stability, and The Effect of No-Contract Plans

Longer price freezes point towards an urgent focus on loyalty and customer retention. This is a wise position to take in a mature and saturated telco market such as the US.

98 percent of Americans in 2024 use smartphones.¹ 396.0 million mobile connections were active in the United States in early 2024. That’s 116 mobile connections for every 100 people.² US telco industry growth is expected to be in the single digits with GSMA predicting that it will remain between 3 to 6% for the next few years.³

Subscriber growth has also shown signs of slowing down. 2025’s first quarter saw a 12 percent decline in new postpaid phone subscribers compared to the same period in 2024.⁴ Adding to the pressure is the prevalence of no-contract plans, which allows value-seeking segments to easily swap providers when the need arises. 

Instead, growth has been driven by upgrades to 5G devices, data-intensive use cases, streaming, the Internet of Things (IoT), and B2B applications across healthcare, manufacturing, and logistics.

All these point to a hypercompetitive yet stagnant market. In such a market, telcos are pressured into locking customers in to prevent losing them, causing them to forego short-term gains as there is currently even more to worry about: MSOs and mobile virtual network operators (MVNOs).

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More Competition: Multi-Service Operators (MSOs) and Acquiring Mobile Virtual Network Operators (MVNOs)

MSOs have been catching up with established MNOs and increasing competitive pressure. Comcast, the third-largest pay-TV company and owner of the MVNO Xfinity, ranks among the top 5 telco providers in the country.⁵

In 2024’s second quarter, cable operators share of total new postpaid and prepaid mobile phone subscriptions was 54% according to MoffettNathanson.⁶ In Q3 2022, MVNOs accounted for 31% of all post-paid net wireless additions in the US, up from 25% in 2021, largely thanks to cable company offerings.⁷

Intense market share competition in the US has led to many MNOs acquiring MVNOs of a certain size to gain more market share:⁸

MVNO acquisitions by competitors, along with the offers provided by MSOs, continue to pressure US telcos to focus more on long-term customer retention initiatives and less on short-term margins.

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Bundles, Longer Freezes and Guarantees Imply a Shift Toward Customer Retention

With a static but highly competitive market, US telcos are under pressure to deliver compelling value that can improve long-term customer engagement, reduce churn, and improve loyalty. 

US major telcos are betting on bundles to cross-sell mobile, home broadband, entertainment, and perks to keep customers loyal and engaged, with the price freezes and locks being an additional layer of defense. Many of these bundles include multiple non-telco offers such as entertainment, mobile lines and fixed internet, likely as a move to entrench users in an ecosystem to dissuade switching away.

Fixed broadband forms the core of many of these bundles. Given the speed and capacity of modern broadband connections, most people’s digital needs from work to entertainment will be met the moment they have one. AT&T currently has the most robust fiber optic network in the US, with Verizon and T-Mobile acquiring fiber providers to catch up. 

When it comes to price locks, US telcos tend to offer up to twelve- to twenty-four month guarantees. Shorter term tactics like loyalty discounts and temporary promos are also favored. These bundles, combined with longer three- to five-year price locks makes these moves noteworthy:

This combination of price freezes and growing their bundles’ value indicates that US telcos are focusing more on long-term ARPU stability over short-term price stability. Price freezes are susceptible to margin erosion if costs increase, such as from inflation or increases in network costs. Yet the three- to five-year freezes demonstrate strong commitment from US telcos to customer retention, even amid cost uncertainties.

This shift toward long-term value propositions rather than raw pricing shows that US telcos are prioritizing retention and ARPU stability. They appear committed to this strategy despite the margin risks posed by inflation and rising network costs.

However, this strategy has a ceiling. Eventually, bundles that are too broad may not resonate deeply with any specific audience. As bundled offers from major competitors grow in scope and become harder to differentiate, customers could still leave for cheaper options when the price freeze period ends. Without a path to meaningful brand differentiation or experiential value, operators risk remaining stuck in the commoditization trap. 

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But One Size May Not Fit All: Super Segmentation as Strategy

To escape the threat of commoditization, the next level of differentiation can come from focusing on rapidly discovering profitable segments of digital natives and tailoring offers to them. The US has a large population of digital natives. There are likely many profitable sub-segments waiting to be discovered among them.

In a world of infinite content and personalization, tailoring service offers and high-quality experiences to these high profit segments could be the lever to boost engagement and customer retention.

US telcos have the network infrastructure and subscriber base from which they can develop microsegments. What comes next is to test bold new propositions without risking their core brand, which is where rapidly building digital sub-brands can come in. Launching lean, targeted digital mobile operators (DMOs) lets operators explore new value spaces quickly, safely, and with measurable outcomes.

Consumers are multi-faceted and building specialized bundle offers to them could offer another solution to the market share retention question. In our own markets, we’ve conducted research into specific sub-segments of Digital Pioneers, referring to the power users among digital natives where high data usage powers their active digital lifestyles. 

We selected Digital Pioneers, also known as Generation D, as these represent a data-hungry set of users who are willing to spend more on data to power their digital habits. Among Generation D, we have the following mindsets:

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You can read more about Sages and Creative Expressionists here and Diversion Seekers and Efficient Executors here.

These sub-segments are the ones we discovered among Digital Pioneers in Singapore, Japan, Taiwan and Australia. As there could be an even greater and richer variety of super segments in the US, having the speed and flexibility to rapidly experiment and learn who the profitable segments are could give telcos the edge over their competitors.

One of the ways of finding out who they are and what they want is by building specialized, experimental digital sub-brands to experiment and optimize independent value propositions for each customer segment. 

With service partnerships and offers already available, this approach opens the door to US MNOs and MSOs to strategically place their bets on what they want to do with the customer segments that they uncover.

As rapid experimentation is key, this approach requires a telco software platform that lets you rapidly launch new sub-brands as required. The ability to partner with a flexible software platform for rapid MVNO deployment could be the next critical step for American telcos. 

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Super Segmentation With The Connectivity, Delight, Beyond Framework

Circles uses the Connectivity, Delight, and Beyond framework ito power digital mobile operator brands around the world, including Japan, Indonesia, Singapore, Mexico and the Middle East. It was designed to create engaging digital brands powered by a telco’s software platform that can be launched in weeks.

Connectivity: 

Connectivity’s pillar focuses on providing a frictionless, well-executed ‘always-on’ core offering to meet people’s basic connectivity needs while building a strong foundation as a primary digital lifestyle enabler. 

This pillar focuses on delivering frictionless onboarding, simple and intuitive connectivity plans, and high-performance connectivity via a unified digital platform supported by the right team structures and processes. The customer experience and onboarding must be seamless and fully digital.

To support the supersegmentation strategy, telcos need to launch multiple DMOs quickly without sacrificing the digital experience. Following Connectivity’s principles, we developed pre-integrated full stack software built on a single code base that can be promptly redeployed to launch other newer sub-brands. This same approach helped a Japanese digital telco brand upgrade to a newer platform in as little as 16 weeks, which you can read about here.

The Connectivity pillar focuses on providing:

Delight: 

The heart of a super segmentation strategy involves learning as much as possible about the target super segment rapidly and updating your services accordingly to provide them with experiences that keep them engaged and loyal. This is where the Delight pillar comes in, focusing on building the telco brand into one that engages with the target super segment’s lifestyles. 

This pillar aims to build high Net Promoter Score customer experiences with a focus on strong acquisition and retention of the target customer persona at a lower customer acquisition cost and a higher lifetime value.

The deep learning and adaptability required for this strategy requires a scalable software platform that can rapidly onboard partner services while having robust customer data and analytics capabilities to support great customer experiences and customer service teams.

The Delight pillar also involves brand research and development that resonates with the target supersegment. For instance, the digital pioneers in some Middle Eastern markets told us they love the brand’s association with the freedom to choose what works better for them.

This pillar focuses on but is not limited to, these initiatives:

Another example of this pillar in action is rapidly testing different non-telco partner service offerings to hyperserve the target supersegment while retaining telco account management functionality. In this case, a Latin American digital telco brand is seeing positive reactions to entertainment offers and will be optimizing its approach based on this feedback.^{20, 21}

With advanced analytics, telcos can test offers, track user behavior, and refine bundles in real time. This method was used successfully in Singapore to earn +50 NPS. 

Beyond: 

The Beyond pillar focuses on building stickiness and engagement through rapid innovation and experimentation.

This comes in the form of strong integration into consumers’ lives via increased engagement with a telco’s service offerings in order to raise switching barriers. Some initiatives include:

Among the results of the Beyond pillar is a low-risk innovation approach that boosted KDDI’s povo app engagement by 30% and increased average revenue per user by 8% in early-stage tests. This approach involved rapidly launching and optimizing MVP upgrades to the digital app. More information about how this approach employs rapidly launching and optimizing MVP changes here.

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Conclusion: Where Bundling Meets Brand Differentiation

As the US telecom market evolves, the path to growth could lie beyond generalized offers. Operators must move beyond static bundles and toward dynamic, super segmented propositions that deepen engagement and expand ARPU.

For many operators, the idea of launching new digital brands raises fears of cannibalization or operational complexity. But the bigger risk is inaction, and we fail the shots that we never took. As MSOs build wireless and fixed broadband capabilities and digital giants eye telecom infrastructure as the next edge battleground, telcos must find new ways to stay relevant. 

To copy a phrase from the tech world, now is the time to fail fast and learn fast. DMOs, powered by Connectivity, Delight and Beyond’s framework, can provide you the platform to test, learn, and scale your super segment telco brand without jeopardizing your telco’s core.

Circles helps telcos by providing them the flexibility and capability to rapidly launch DMOs, offering the tools and expertise to launch sub-brands, and capture niche demand with agility.

The future belongs to those who learn quickly, implement effectively, and scale successfully. Let Circles be your partner in taking your telco to the next level!