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1st Half Cellular Subs Hit 262.7M

Washington D.C. — The number of wireless-phone subscriptions grew 7.9 percent to 262.7 million in the first half of 2008 compared to the year-ago period, and it more than quadrupled in the decade since June 1998, when the subscriber base hit 60.8 million, CTIA statistics show.

The number of subscriptions is equivalent to 86.4 percent of the U.S. population, according to the latest Census Bureau population estimates. However, because a growing number of subscribers use more than one phone, the actual percentage of the U.S. population owning a phone is less than the 86.4 percent than the statistics would indicate.

The number of cellular subscriptions exceeded half of the U.S. population for the first time in mid 2003, when the penetration rate hit 50.9 percent by the end of June of that year.

Net-new subscribers: Because wireless penetration has expanded rapidly in recent years, the number of net new subscribers (after churn) in the first half fell for the third consecutive year, CTIA found in its semiannual survey of carriers. For the six months ending June 30, the industry gained 7.3 million net new subscribers, down 29.5 percent from the previous year’s first-half gain of 10.4 million, CTIA statistics show. This year’s gain, nonetheless, was the seventh largest first-half gain in net new subscribers in the industry’s 25-year history.

Carrier revenues: Although net new-subscriber growth is slowing, wireless carriers are making more money than ever, CTIA found. First-half revenues grew 7.1 percent to a record $72.7 billion in the first half compared to the year-ago half. Nonetheless, the percentage gain was down from the year-ago 12.3 percent and down from first-half 2006’s 8.6 percent revenue gain. First-half gains before 2006 were 13 percent in 2005, 19 percent in 2004, and 12.7 percent in 2003.

This year, double-digit gains in wireless-data revenue were in large part responsible for the carriers’ revenue increases, accounting for $4.3 billion of the carriers’ first-half $4.8 billion revenue growth, CTIA found.

Data darling: Data revenues rose 40 percent to $14.8 billion in the first half compared to the year-ago period. As a result, data revenues accounted for 20 percent of carrier revenues, up from 15.5 percent of revenues in the year-ago half and 11 percent of total revenue in the first half of 2006, CTIA said. The data-revenue growth rate accelerated from 12.3 percent in the first half of 2007 and 8.6 percent in the first half of 2006, the statistics also show.

Usage: The number of text messages, picture messages, and minutes spent on the phone also rose, CTIA found. Minutes of use rose 10.9 percent to 1.12 trillion minutes in the first half compared to the year-ago period, but the average phone bill slipped 2.8 percent in June 2008 to $48.54 from June 2007’s $49.94. The statistics marks the first time in six years that the average June bill was below $49. Average bills ranged from a low of $49.30 in June 2006 to a high of $49.94 in June of 2007.

Also in the month of June, the number of text messages rose 160 percent to 75 billion compared to June 2007. The number of MMS messages sent, incorporating pictures or other multimedia content, hit 5.6 billion in the first half, almost exceeding the number of MMS messages sent in all of 2007.

To handle growing voice and data usage, carriers continued to build more cell sites in the first half. The number of sites in June 2008 was up 4.8 percent to 220,472 versus June 2007, which itself posted a net cell-site gain of 6.5 percent to 210,360. These gains, however, were down from June 2006’s year-over-year gain of 11 percent but up from June 2005’s 2 percent gain. The June 2004 gain was 18 percent.

CTIA developed the statistics from a survey of carriers serving 97 percent of all wireless subscribers. Estimates were compiled for systems that did not respond.