|
NewsGlobe: Currents
U.S. Wireless Revenue Up 10% to $174.7B in ’05, says Report
Market Expected to Reach $265.2B in 2009
by Bob Wallace
Revenue in the U.S. wireless market totaled $174.7 billion in 2005, up
10.7 percent from 2004, with an acceleration in handset revenue and a
ramp-up in new wireless subscribers as key drivers of growth, according
to the newly released TIA’s 2006 Telecommunications Market Review and
Forecast.
The wireless handset and device market totaled $15 billion in 2005 and is
expected to increase 19.3 percent in 2006 climbing to $17.8 billion,
according to the annual report.
Twenty-five million new wireless subscribers were added in 2005, more
than in any other year, and the 21.4 million subscribers added in 2004
matched the previous high in 2001.
TIA projects the overall wireless market, including transport services,
devices, wireless equipment and services in support of the wireless
infrastructure, to grow at an 11.0 percent compound annual growth rate
(CAGR), reaching $265.2 billion in 2009.
While demand for wireless communications remains strong, the report
says there are limits to its subscriber growth potential, as nearly two-
thirds of the U.S. population has already subscribed to a wireless service.
As a result, carriers are encouraging the development of new wireless
applications that will boost average revenue per user. Growth in wireless
revenue will be driven by additional minutes of use for voice services,
subscriptions to wireless data packages, additional revenue-generating
applications and subscribers’ willingness to trade up to more
comprehensive, and more expensive, plans resulting in increased revenue
per subscriber.
The TIA expects a drop to single-digit increases in wireless subscribers
(wireless telephony and paging) beginning in 2007, with growth
averaging 8.2 percent on a compound annual basis through 2009, when
there will be an estimated 278.5 million wireless subscribers, representing
88 percent of the population.
Revenue generated from all wireless services rose 14.8 percent in 2005
to $118.6 billion. The TIA says it expects revenue to increase to $180.4
billion in 2009, growing 11.1 percent on a compound annual basis.
The trade association’s report explained that the recent pick-up in
wireless subscribership reflects, in part, moderating price increases and
the introduction of new uses for wireless communications devices
(wireless phones, pagers, PC cards and PDAs).
Revenue in the wireless device market rose 22.6 percent in 2005
reaching $15 billion as a 25.4 percent increase in wireless phones offset
a 21.6 decline in pagers and a 5.9 percent decrease in PDAs, according
to the TIA. The emergence of new mobile applications such as video and
music will continue to fuel both the subscriber and handset markets.
The report says wireless phones comprise 94 percent of the total
wireless device market, with revenue reaching $14 billion in 2005. The
overall wireless device market is expected to increase from $17.8 billion
in 2006 to $24.5 billion in 2009 growing at a 13.1 percent CAGR.
Overall wireless equipment revenue totaled $29.4 billion in 2005 and is
expected to grow at an 8.3 percent CAGR reaching $40.4 billion in 2009.
With the continued expansion of third-generation network coverage and
the near-term licensing of advanced wireless services spectrum, a
substantial roll-out of third-generation infrastructure will contribute to
capital spending during the next few years, the report projected.
Other findings
Capital expenditures revenue will grow at a 7.5 percent CAGR reaching
$32 billion in 2009. Spending on services in support of the wireless
infrastructure rose 18.0 percent in 2005, accelerating from the 13.6
percent increase in 2004.
New wireless applications and wireless infrastructure upgrades are fueling
growth in this area. Total spending on services in support of wireless
infrastructure in the United States will increase to a projected $20 billion
by 2009, up 14.1 percent CAGR from the $11.8 billion total of 2005.
|
