CTIA: Net Subscriber Growth Resumes In '03

WASHINGTON— For the wireless industry, the days of wine and roses are back.

The industry reversed two years of declining net new-subscriber additions in 2003 with a stellar 44.9 percent gain in net adds, to 17.96 million, bringing the total subscriber base to 158.7 million at the end of last year, the Cellular Telecommunications and Internet Association (CTIA) said.

The full-year gain followed net-add declines of 19.4 percent and 23.3 percent in 2001 and 2002, respectively.

The number of net new subscribers in 2003 was the third highest on record after a 23.4 million gain in 2000 and an 18.9 million gain in 2001. Nonetheless, the percentage gain was the largest since 1994's 63 percent gain.

In 10 years, CTIA president Steve Largent said, the subscriber base has grown tenfold from 16 million in 1993. "We are fast approaching the day [when the cellular phone] becomes the third screen in people's lives," after the TV and PC screen, because of high-speed wireless broadband, he added.

Besides attracting new subscribers at a faster rate, carriers are also getting more money from their subscribers. The average monthly phone bill rose for the fifth consecutive year in 2003, CTIA said.

The pace of subscriber growth increased as the year progressed, the CTIA statistics show. Second-half net adds rose 71.7 percent to 10.66 million, marking the second highest second-half gain since 2000's 12.44 million.

Suppliers have attributed renewed growth in net adds to new data offerings, new youth-targeted marketing programs, and mobile virtual network operators (MVNOs) that have successfully tapped into underpenetrated markets, including the youth market.

Here's what else the CTIA found in its semiannual carrier survey:

Average bill: The average monthly phone bill rose for the fifth consecutive year, this time by 3.1 percent to $49.92 from 2002's $48.40. The average bill fell every year between 1988 and 1998, when it hit an all-time low of $39.43.

Analog anomaly: The percentage of subscribers using digital phones rose to an all-time high of more than 92 percent. The percentage has grown steadily since digital's introduction in the mid 1990s.

Capital investment: The total dollars spent by carriers on capital investment continued its seesaw ride, dropping in 2003 to $18.95 billion after rising in 2002 to $21.89 billion, falling in 2001 to $15.41 billion, and rising in 2000 to $18.36 billion.

The number of cell sites, nonetheless, continued to grow to improve service quality. The number of sites rose to 162,986, up 17 percent from year-end 2002's 139,388.

For its semiannual survey, CTIA received responses from about 2,719 of the 3,123 cellular, PCS and ESMR systems operating in the United States. The association estimated subscriber statistics for the other systems.