Wednesday, January 25, 2006

Top U.S. Wireless Firms Added More Users Than Most Expected

Investor's Business Daily reports that Cingular and Verizon Wireless had stronger-than-expected subscriber growth last quarter. Cingular added 1.8 million net customers and Verizon added 2 million subscribers, which "were record sums for both, up 5.9% and 20.5%, respectively, from Q4 2004." MVNO TracFone, which rents airtime from Cingular, "accounted for nearly 1 million of Cingular's 1.8 million customer adds."

According to the article, the "U.S. wireless industry is expected to add 24 million subscribers in '05," which was "up 2.56% from 23.4 million in 2004." However, analysts "estimate the industry will add just 17 million to 20 million customers in 2006, as much as 30% less than in 2005."

Roger Entner at Ovum said, "We're basically running out of people who need wireless. Now it's going to be much more of a market share battle among wireless companies. They're going to try to take customers away from each other rather than target people who've never had wireless."

Cingular ended the year with 54.1 million customers, but its ARPU fell 2.2% from the year-ago quarter to $48.86. Verizon had 51.3 million customers, and David Barden at Banc of America predicted its ARPU "likely fell 3% to $49."

Entner said, "Wireless investors have resigned themselves to falling ARPU. If companies are able to stem that trend, they could create some nice buzz for themselves." According to the article, "the No. 3 wireless carrier, Sprint Nextel, has the highest ARPU, at $64.50.