- 24 February 2006 -

More US wireless subscribers added in 2005 - more than in any other year says report

According to the newly released TIA's 2006 Telecommunications Market Review and Forecast, revenue in the US wireless market totaled $174.7 bn in 2005, up 10.7% from 2004, with an acceleration in handset revenue and a ramp-up in new wireless subscribers as key drivers of growth.

The wireless handset and device market totalled $15 billion in 2005 and is expected to increase 19.3% in 2006 climbing to $17.8 bn. Some 25 m new wireless subscribers were added in 2005, more than in any other year, and the 21.4 m 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% CAGR, reaching $265.2 bn in 2009.

While demand for wireless communications remains strong, 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. TIA expects a drop to single-digit increases in wireless subscribers (wireless telephony and paging) beginning in 2007, with growth averaging 8.2% on a compound annual basis through 2009, when there will be an estimated 278.5 m wireless subscribers, representing 88% of the population.

Revenue generated from all wireless services rose 14.8% in 2005 to $118.6 bn. TIA expects revenue to increase to $180.4 bn in 2009, growing 11.1% on a compound annual basis.

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 personal digital assistants). Revenue in the wireless device market rose 22.6% in 2005 reaching $15 bn as a 25.4% increase in wireless phones offset a 21.6% decline in pagers and a 5.9% decrease in PDAs. The emergence of new mobile applications such as video and music will continue to fuel both the subscriber and handset markets. Wireless phones comprise 94% of the total wireless device market, with revenue reaching $14 bn in 2005. The overall wireless device market is expected to increase from $17.8 bn in 2006 to $24.5 bn in 2009 growing at a 13.1% CAGR.

TIA's 2006 Telecommunications Market Review and Forecast provides an overview of telecom's interrelated market segments including landline network, enterprise and consumer, wireless communications, and international markets. It's available in hard copy or on CD-ROM.

To order, visit: http://www.tiaonline.org/business/research/mrf/