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Wireless Breaks Its Two-Year Slump With First-Half Growth, Says CTIA

10/27/2003 02:00:00 AM Eastern

The number of net new wireless-phone subscribers (net adds) grew in the first half by 18 percent, to 7.3 million, following two years of steep double-digit declines, the Cellular Telecommunications and Internet Association (CTIA) found in its semiannual carrier survey.

The gain expanded the subscriber base to 148 million at the end of June, up 10 percent from the year ago's 134.6 million, CTIA said.

Despite the first-half turnaround, the total number of net adds was below levels enjoyed during the previous three years, given the double-digit declines posted during the two previous years. In the first half of 2002, net adds declined 30.6 percent to 6.19 million following a first-half 2001 decline of 18.8 percent to 8.92 million.

Before 2001, the number of first-half net new subscribers increased every year at double-digit rates except for 1996 and 1997, when the first-half gains were in the single digits. First-half net-new subscriber gains peaked in 2000, when the number of net new subscribers grew by 55.3 percent to 11 million.

Besides net adds, other industry indices also rose in the first half, including the size of the average phone bill and the percentage of digital subscribers.

The average first-half phone bill rose for the fifth consecutive year, this time by $2.04 to $49.46, reflecting a 30 percent increase in billable minutes of use over first-half 2002 to 400 billion minutes. Greater use of messaging and data services also likely contributed to the dollar gain. The dollar increase followed a gain of $1.86 in first-half 2002, a 41-cent gain in first-half 2001, and a $4.91 increase in first-half 2000.

The percentage of subscribers using digital phones rose to 92 percent at the end of June compared to 87 percent at the end of June 2002.

Carriers' capital spending fell 46 percent to $7.23 billion in the first half of 2003 from a record $13.4 billion in the first half of 2002. Despite the decline, carriers spent more on capital investment in the first half of this year than they did in eight of the past 10 years. First-half capital spending was higher only in 2002 and 2001, reflecting the installation of GPRS and CDMA 1X infrastructure and the conversion of TDMA carriers to GSM.

For its survey, CTIA received responses from 2,444 of the 2,840 cellular, PCS, and ESMR systems operating in the United States. The association estimated statistics for the other systems.

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