CTIA: During '00 New Subscriber Growth Doubled

WASHINGTON D.C. — Some wireless-phone carriers may have missed their fourth-quarter 2000 sales projections, but they shouldn't have much to complain about.

The industry's net new-subscriber growth rate accelerated in the second half of last year to 33.2 percent from 1999's 16.5 percent, according to a carrier survey conducted by the Cellular Telecommunications and Internet Association (CTIA). For the full year, the industry's net new subscriber growth rate rose to 42.5 percent from 1999's 21 percent (see table, p. 8).

Carriers' overoptimistic fourth-quarter projections might have been fueled in part by the first half's 55.3 percent gain in net new subscribers, but if carriers had based their fourth-quarter projections on 1999's growth patterns, they might have anticipated a second-half growth-rate slowdown. In 1999, CTIA statistics show, second-half growth slipped to 16.5 percent from the first-half's 28.8 percent.

On the other hand, if carriers took 1995-1999 growth patterns into account, second-half and fourth-quarter growth becomes more difficult to project because in some years, second-half growth was greater than first-half growth, and in other years, the reverse was true.

In 1997 and 1998, net new-subscriber growth rates were higher in the first half (5.7 percent and 18 percent, respectively) than in the second half (13 percent and 26.8 percent, respectively). In 1995 and 1996, however, the opposite pattern occurred. First-half growth was 22.8 percent and 9.7 percent, respectively, for both years, while second-half growth was 20 percent and 3.8 percent, respectively.

Other survey results found that:

• Last year, the number of net new subscribers in the second half hit 13 million, bringing the total subscriber base to 110 million, up 27.9 percent from year-end 1999.
• The average December phone bill rose to $45.27 in 2000, having grown for the second consecutive year after having drifted downward every December since 1989. The 9.8 percent phone-bill increase was based on a 37.2 percent increase in usage, CTIA said.
• The number of cell sites continued to grow as carriers scrambled to fill out their networks. In December 2000, there were 104,288 cell sites, up from the previous December's 81,698.
• Carriers' capital investment grew in 2000 to $18.4 billion, up from 1999's $10.7 billion.

For its semiannual survey, CTIA received responses from 2,111 of the 2,440 cellular, PCS, and ESMR systems operating in the United States. The association estimated statistics for the other systems.