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CTIA : Wireless Downturn Accelerates In

Washington – The wireless industry posted its second consecutive first-half decline in net new subscribers, and this year’s decline was steeper than last year’s, the Cellular Telecommunications and Internet Association (CTIA) found in its semiannual carrier survey.

The number of net new wireless-phone subscribers, or net adds, fell in the first half by 30.6 percent to 6.19 million from first-half 2001’s 8.92 million, which itself was down by 18.8 percent from the first half of 2000.

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 subscriber gains peaked in 2000, when the number of net new subscribers grew by 55.3 percent to 11 million.

In 2001, the industry not only marked its first first-half drop in net adds, but the year also marked the industry’s first second-half decline as well. The number of net new subscribers fell in the second half of 2001 by 23.3 percent to 9.98 million from 12.4 million in the second half of 2000.

Although the number of net adds was down in the first half of this year, the industry’s total subscriber base rose 4.8 percent to 134.6 million at the end of June from year-end 2001’s 118.4 million. The growth rate was down, however, compared to the first half of 2001, when the total subscriber base grew 8.2 percent to 118.4 million from year-end 2000’s 109.5 million.

In the first half of this year, the survey also found that:

  •  The number of digital subscribers grew by 29 percent to more than 87 percent of all wireless subscribers, or 117.1 million out of 134.6 million subscribers (see chart 1).
  • The average phone bill rose to $47.72 from the previous first-half’s $45.56, continuing an uninterrupted annual rise that began in the first half of 1998. The average call length, however, dipped a bit to 2.6 minutes from 2.62 minutes, indicating that subscribers are using more messaging and data services.
  • The number of cell sites continued to grow as carriers scrambled to fill out their networks. At the end of June, the number of cell sites hit 131,350, up 15 percent from the year-ago period.

For its survey, CTIA received responses from 2,479 of the 2,839 cellular, PCS, and ESMR systems operating in the U.S. The association estimated statistics for the other systems.