US Mobile Market Approaching Maturity

A new Yankee Group report has shown the wireless industry approaching maturity with impressive speed. Only two years ago, the U.S. wireless industry was one of the few remaining emerging high-growth sectors. However, with almost 50% penetration, North Americans now treat wireless like a utility rather than a novelty.

"The U.S. wireless industry is facing the threat of becoming like the airline industry with high fixed costs, low variable costs, a perishable product and cutthroat competition," says Roger Entner, Yankee Group Wireless/Mobile Services program manager. "These conditions make it easy for industry participants to behave in a way that has potentially disastrous consequences in the long run. Airline travel is cheaper than ever before, but few customers are happy with the experience."

With the current state of wireless competition, it is only a matter of time before unlimited calling plans are available nationwide. Wireless number portability (WNP), commencing on November 24, 2003, likely will be a catalyst for this. Although the Yankee Group does not expect WNP to have a significant impact on a per-annum basis, with a rise of only 40 basis points, the quarterly impact will be large, even if it spreads across the fourth quarter of 2003 and the first quarter of 2004. On an aggregate basis, the Yankee Group fears that a spike of up to 220 basis points or an increase in the magnitude of 12 to 15 million additional gross adds is not unreasonable."

Posted to the site on 2nd October 2003