Jan

24

The state of the wireless industry

Posted by cellphones

January 24, 2008 |

A glaring stat in the 3Q ‘07 financial numbers of the top U.S. wireless companies shows that one of the top five companies had so few new activations and so many customers leaving, that they had a activation total of -60,000. The company happens to be Sprint and their acquisition of Nextel is looking like a complete disaster. Having worked for a wireless company that purchased a few other regional wireless companies it is easy to see why this can happen. First off, large companies end up having many many billing systems and this contributes to billing issues and a very confused customer service department.

However I am surprised by their decline simply for the fact that they have great traction with business customers who love the reliability of the walkie talkie (push to talk) technology. Add this to their high end data network and you have to start wondering if a new approach should be taken in their marketing, which is about as exciting as a visit to the proctologist.

Or is this the first indication that the U.S. mobile saturation rate is becoming a problem for wireless companies. In 2001, around 40% of America had a mobile phone, now that number is 75% which is a staggering increase in six years. This is a large part of the reason that US Mobile companies are doing so well financially, they have had a large amount of growth projected as some European countries have a 95% saturation rate which doesn’t leave much for new activations. If this trend continues look for Wall Street to get a little bearish.

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