Survey: Carriers Gain Share At Expense Of Independents

By Joseph Palenchar -- TWICE, 12/9/2002

San Francisco — Carrier-owned retail stores gained market share in the past year, partly at the expense of their own online stores and local independent wireless specialists, according to a wireless-subscriber survey by Telephia.

The share held by major retail stores slipped (see table), but the change was slight, the wireless-research company said.

Telephia also found that carriers' distribution strategies run all over the board, with some carriers relying more heavily on major retailers, while others rely more heavily on local independents or direct sales (through carrier-owned stores and Internet sites).

Telephia surveyed more than 20,000 wireless subscribers in the fourth quarter of 2001, second quarter of 2002, and third quarter of 2002. Only subscribers who signed up for service themselves were surveyed, excluding consumers whose phones and service were purchased by an employer or by a friend. Telephia asked the subscribers where they signed up for their current wireless service but didn't ask them when they signed up with their current provider.

In the third quarter of 2002, the largest percentage of wireless users — 43.6 percent — said they had purchased their current service through a carrier store. Another 5.7 percent said they bought from a carrier's online site. That brought total carrier share in the third quarter of 2002 to 49.3 percent, up from 45 percent in the fourth quarter of 2001.

Growing carrier-store share accounted for all of the carriers' third-quarter 2002 gain compared to the fourth quarter of 2001. Carrier-store share rose to 43.6 percent from 37.1 percent during that time, but the carriers' online store share fell to 5.7 percent from 7.9 percent.

Local independents also experienced a "significant decline" in share during that period, Telephia said. Independent store share fell to 7.4 percent from 9.8 percent.

Meantime, shares held by major retailers and resellers slipped slightly, while kiosks in department stores and malls held their own and noncarrier online stores gained slightly.

The share held by major retailers slid to 12.2 percent in the third quarter of 2002 from 13.4 percent in the fourth quarter of 2001. Reseller share slipped to 0.9 percent from 1.5 percent, and kiosks held steady at 6.2 percent after a dip to 5.2 percent in the second quarter of 2002.

Noncarrier Internet sites went to 2.7 percent from 2.3 percent.

In surveying consumers about their carriers, Telephia also found that carriers relied on different distribution channels to greatly varying degrees. Without revealing the carriers' names, Telephia found that one of six major carriers accounted for the largest share of phones bought at major retail stores during the third quarter of 2002, while another carrier accounted for almost 41 percent of all phones purchased over a noncarrier Internet site.

Where Consumers Buy Wireless*
By % of polled subscribers

Retail channel	Q4 2001	Q2 2002	Q3 2002
Service provider retail store	37.1	43.0	43.6
Service provider online store	7.9	5.7	5.7
Major retail chain store	13.4	13.5	12.2
Local independent telecom store	9.8	8.2	7.4
Reseller	1.5	1.2	0.9
Internet site not affiliated with a service provider	2.3	2.6	2.7
Kiosk in mall/department store	6.2	5.2	6.2
Other	21.8	20.7	21.3
*In each quarter, subscribers were asked where they bought their current service plan. They were not asked when they bought their plan. The number of users polled in each respective quarter was 22,990, 24,448 and 21,785 respectively. All polled users purchased service on their own. Source: Telephia, San Francisco ©TWICE 2002