Sunday, August 28, 2005

Wireless Service Costs End Free Fall

The News & Observer (registration required) writes that prices for U.S. wireless voice plans, "which had been dropping steadily for years, may have finally hit bottom."

Adam Zawel at Yankee Group said, "We're not going to see the 10 percent to 20 percent price drops anymore. The price declines will slow down to a crawl. That's already happening."

With voice plans amongst the major carriers becoming almost indistinguishable based on pricing, the carriers need to find new ways to drive revenue. "The value may very well come in a different form. The emphasis won't necessarily be on increasing the bucket of minutes," said Yankee Group analyst Marina Amoroso.

According to Yankee, the "average time callers spent on their cell phones tripled from about 250 minutes a month in 2000 to about 750 minutes a month this year. However usage seems to be slowing down. "People are talked out. The minutes of use have flattened out," Zawel said