CTIA: '04 Subscriber Gains Are Second-Best In History

By Joseph Palenchar On Apr 4 2005 - 6:00am

For cellular carriers, it's almost like 2000 again.

Last year, the number of net new cellular subscribers grew 21 percent to reach 21.7 million, the second highest level in the industry's history, according to statistics unveiled by the Cellular Telecommunications and Internet Association (CTIA). The gain was exceeded only by 2000's gain of 23.4 million net new subscribers.

CTIA also put the total subscriber base at 180.5 million, up 13.7 percent from year-end 2003's 158.7 million. Percentage growth in 2003 was 12.7 percent gain.

Although the full-year gain was strong, the industry's momentum might have slowed in the second half, the statistics indicate. For only the second time in 10 years, the number of first- and second-half net additions was almost equal. Normally, the number of second-half net adds exceeds first-half adds by anywhere from 1 million to 3.4 million. In 2004, however, first-half additions were 10.7 million, and second-half additions were 11 million, representing a difference of only 300,000. A similar pattern emerged in 2003, when first-half net adds of 6.19 million almost matched second-half gains of 6.21 million.

Whatever the industry's second-half momentum, the year-end cellular penetration rate reached about 61 percent of the total U.S. population of roughly 295 million, as indicated by Census Bureau statistics.

In other findings:

Average bill: The average monthly phone bill rose for the sixth consecutive year to $50.65, up 1.5 percent from the previous year's $49.91. The average bill fell every year between 1988 and 1998, when it hit an all-time low of $39.43. The average bill in 2004 fell only 36 cents short of the average 1995 phone bill.

Talk time: Minutes of use grew 32.7 percent in 2004 to about 1.1 trillion.

Record capital investment: Carriers resumed their big-spending ways in 2004, when they spent $27.93 billion on capital investment. That's up from 2003's $18.95 billion, 2002's $21.89 billion, 2001's $15.41 billion, and 2000's $18.36 billion.

Even though 2004 capital spending was up 47.4 percent over 2003 levels, the number of new cell sites actually fell in 2004 to 12,739, from 2003's 23,648. Much of that capital spending growth, therefore, was likely directed to such technology enhancements such as EDGE and EV-DO rather than into new cell sites, the figures suggest.

All told, the installed base of cell sites hit 175,725 at the end of 2004, up 7.8 percent from 2003's year-end 162,986.

For its latest semiannual statistics, CTIA surveyed cellular, PCS, and ESMR systems and received responses from systems serving 96.3 percent of U.S. wireless subscribers. The association estimated subscriber levels for the other systems.