Editor’s note: Eric Costa is an analyst with Technology Business Research, a market research and consulting firm specializing in the business and financial analysis of hardware, software, professional services, telecom and enterprise network vendors, and operators.

HAMPTON, N.H. –According to Technology Business Research Inc.’s 3Q13 U.S. & Canada Mobile Operator Benchmark, operators remain focused on LTE builds and developing new data services to drive growth in wireless revenue and connections. Eric Costa, an analyst in TBR’s Networking & Mobility Practice, said, “T-Mobile will maintain its newfound success in 4Q13 as its Simple Choice plans and device lineup bring in postpaid subscribers on par with Verizon, the industry leader.”

The top two Tier 1 U.S. operators continue to dominate the market in revenue and margins. Verizon pulled ahead of AT&T during 3Q13 with higher revenue growth, more subscriber net additions and better margins.

Verizon leads the U.S. wireless industry in revenue and subscribers due to its time-to-market lead in LTE and shared data plans that spur increased connected device adoption. This led to industry-leading postpaid net additions of 927,000, the largest shared data plan subscriber base in the U.S., and the most profitable wireless segment in 3Q13.

Verizon’s 8.4% year-to-year growth in wireless revenue and almost 1.1 million total retail net additions were more than AT&T or Sprint could muster in 3Q13. Data revenue growth drove record-high operating income for Verizon Wireless in 3Q13, a trend TBR expects to continue in 2014, helping to widen its lead over the competition.

Verizon Wireless is investing in LTE by expanding its LTE network over its AWS spectrum and will launch its LTE-Advanced services in 4Q13. Rolling out an LTE network and a broad portfolio of devices is only part of Verizon’s overall strategy. Over the next two years, the company plans to invest in small cells and heterogeneous network technologies, which will allow it to run its LTE and CDMA networks over the same spectrum.

AT&T’s wireless segment reported total revenue growth of 5.1% year-to-year in 3Q13. TBR estimates AT&T’s service revenue will increase 3.8% year-to-year in 4Q13 due to AT&T deploying the remainder of its initial LTE network, executing Project VIP to improve its network quality and reliability, and drawing subscribers to its Mobile Share plans.

These initiatives will strengthen AT&T’s business and drive higher data consumption, enabling AT&T to better monetize its offerings and gain ground on Verizon, which outperformed AT&T in revenue, subscriber and margin growth in 3Q13. However, TBR expects AT&T’s margins will take a sequential dive in 4Q13 due to expected strong holiday season smartphone sales that will cause a spike in equipment subsidies.

AT&T offered LTE in 461 markets in early November. The company will continue to lag behind Verizon in LTE markets in 4Q13, yet it will utilize its widespread HSPA+ network in combination with LTE to offer comparable speeds and attract new smartphone subscribers. AT&T will expand its LTE footprint to 300 million POPs by mid-2014 — six months ahead of its original goal — giving it the largest U.S. LTE network by coverage.

T-Mobile’s long-term initiatives include its LTE network build, Un-carrier strategy and the addition of MetroPCS, which will improve the operator’s financial position in 2014. In the short term, the operator will be in the running for the highest postpaid and total net additions in 4Q13 due to its Simple Choice plans and Un-carrier strategy.

T-Mobile will see higher capex in 4Q13 as the LTE network expansion continues and the operator expands MetroPCS’ footprint. The bulk of the rollout will be complete by mid-2014, meaning capex will remain high until 2H14 but then begin to decline.

(c) TBR