FCC: Wireless Choice Up, Prices Down

By Joseph Palenchar -- TWICE, 7/21/2003

Washington — More consumers are able to choose from more wireless-phone carriers than ever before, helping drive down pricing and drive up penetration, the Federal Communications Commission (FCC) said in releasing a preliminary report on 2002 industry competition.

In a preliminary version of its eight annual industry-competition report, the commission also found growing use of data services, continued digital market-share growth, and widespread deployment of next-generation services such as GPRS (General Packet Radio Service) and CDMA 1xRTT voice and data service.

As of March, operators offered next-generation services in all, or some portions of, U.S. counties containing 265 million people, or 93 percent of the U.S. population. That's up from March 2002, when the services were available in at least portions of counties where 181 million people lived.

Whether they chose second- or next-generation services, slightly more consumers had more carrier choices at the end of 2002 than during the year-ago period, the report found. All told, 270 million people, or 95 percent of the U.S. population, live in counties where three or more carriers operate networks throughout the country or in portions of the county, the FCC said. That's up from 268 million at the end of 2001. In addition, more than 236 million people, or 83 percent, live in counties where five or more carriers operate.

In addition, wireless users talked more on their phones, and their price per minute continued to fall, the FCC said. Minutes of use averaged 427 per month between June and December of 2002, up 12 percent from the year-ago period. Estimates of the decline in cost per minute range from 1 percent to 9 percent, "depending on the methodology employed," the FCC said.

Based on its study, the report concluded that the industry "is competitive" and "experienced increased service availability, lower prices for consumers, and a greater diversity of service offerings," which included the launch of downloadable ring tones and graphics, multimedia messaging and interactive gaming.

In other findings, the FCC said:

digital share continues to grow. At the end of 2002, digital users accounted for about 88 percent of all wireless-phone subscribers, up from almost 80 percent at the end of 2001 and 72 percent at the end of 2000. All told, about 278 million people, or 97 percent of the population, live in counties where digital service is available in at least some portions of the county.
mobile data use is growing. Wireless text messages and e-mail "continued to grow in popularity," the FCC said, with 20 percent of all wireless-phone users having used text message service in the fourth quarter of 2002.

As for wireless Internet access, an estimated 11.9 million people, or 8 percent of all wireless-phone users, subscribed to some form of mobile Internet service at the end of the year. Another 2.3 million people used data-only devices to subscribe to mobile Internet service.

Estimates of the number of mobile Internet users at the end of 2001 ranged from 8 to 10 million, up from 2 to 2.5 million at the end of 2000, the FCC said.

Cellular Service Availability

	2001	2002
Population of counties with 3 or more carriers:	268 million (94% of U.S. population)	270 million
Population of counties with 5 or more carriers:	229 million (80+%)	236 million (83%)
Population of counties with 6 or more carriers:	151 million (53%)	202 million (71%)
Source: FCC ©TWICE 2003