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Telecommunications Mobile industry recession proof in the US
Telecommunications Mobile industry recession proof in the US | Mobile industry recession proof in the US |
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| by Stan Beer | |
| Sunday, 23 November 2008 | |
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Page 2 of 2 "Canada’s national wireless operators also saw continued
connections growth, with Rogers’ connections base growing 8%
year-on-year, Bell Canada by 7% and Telus 10%.Featured Whitepaper
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"As North America has relatively low penetration, prepaid could actually be an opportunity for North American operators in 2009, as shown by T-Mobile’s 26% rise in prepaid subscriptions in the third quarter. Assuming offerings are positioned carefully so as not to erode contract revenues, then the customer base could grow further in the currently underserved lower end segment. "Financial indicators for the North American wireless market also looked healthy in the third quarter. AT&T, Verizon Wireless, T-Mobile and Metro PCS in the US and Rogers Wireless in Canada all reported double-digit revenue growth, with the remainder in the high single digits, including US MVNOs Tracfone and Virgin Mobile. Sprint was the only operator to mention ‘tough economic times’ in its results and reported a 13% year-on-year revenue decline." The iPhone has already played a key a role in the growth of mobile telecoms in the North American market and this is tipped to continue into 2009, as is the explosive growth of mobile data services. "In 3Q08 the most high-profile margin erosion came from AT&T and Rogers Wireless as a result of iPhone subsidies, but this will aid profitability in 2009," says Mr Hartley. "The North American market also reported stunning growth in mobile data services. Admittedly this is from a small start, but the demand for mobile data looks like continuing into 2009, even if it proves to be less than what was anticipated 12 months ago. Just a few metrics serve to illustrate this point: Telus grew wireless data revenues by 56% year-on-year, AT&T by 51% and Verizon by 43%." The result of all this combined is that the North American mobile market will be largely insulated from the economic downward spiral and continue to grow strongly at least for the next year. "We feel that the North American mobile market will escape catastrophe as a result of macroeconomic conditions in 2009 and will continue to grow, albeit not at the rates we have seen in 2008," says Ovum's Mr Hartley. "The region’s relatively low penetration has stimulated growth to date. However, increasing saturation means that segments currently unserved by wireless are likely to be those most affected by the economic conditions. Therefore, our latest Mobile regional and country forecast pack: 2007–13 predicts a 6.3% rise in both connections and revenues in the US from 2008 to 2009. In Canada it is 7.5% for connections and 11.3% for revenues." |
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