US Cellular Subcribers Hit 285 Million As Monthly Bills Fall

The CTIA released its semi-annual survey of wireless phone use in America.

The number of cellular subscriptions in the US rose to 285 million, confirming industry concerns that the market is now saturated with phones and the fight among carriers will be for market share and services.  Devices other than handsets grew rapidly, however. Fifty million of the devices now in the market are smart phones or wireless-enabled PDAs and nearly 12 million are wireless-enabled laptops, notebooks or aircards. 

Aside from the cost of taking customers from their rivals, cell service companies have another problem. The average monthly bill per customer is $49.57 which is essentially flat with last ten years and well down from 15 years ago when the figures was closer to $55.

The data adds to other information, particularly the earnings slowdowns of the large cellular telecom companies, that supports the theory that the  cellular industry has seen its best days, especially financially.

Dan Hesse of Sprint (S) recently said that his company and peers would no longer charge for minutes, but would get their money from gigabits of data served. That model has the potential of bringing in less money in a world where many carriers charge for text messages and internet access.

The stagnation in phone bill values is also a sign that paid services like online video are not improving revenue per subscribers. That leave a large burden on the small but growing wireless a business. which is still in its infancy. Plans to charge for content on phones will have the same barrier to the attempts by content companies to charge for access of the wireline internet. Clever web surfers simply find the information elsewhere.

Everyone has a cell phone. And, that is bad for the phone companies

Douglas A. McIntyre