New wireless technologies will enhance the appeal of industry services, driving up demand
Los Angeles, CA (PRWEB) January 08, 2013
The Wireless Telecommunications Carriers industry has benefited greatly from the rapid development of mobile devices over the past five years. The popularity of these devices bolstered growth over the past five years despite a weak economic environment. The portion of households with only wireless telephone connections has increased markedly since 2007, according to data from CTIA, the Wireless Association. When given the choice, customers overwhelmingly chose wireless telephone service over landlines. As a result, revenue has grown to $210.2 billion in 2012, averaging 2.6% growth per year over the past five years. In 2012, revenue is expected to grow 3.6%. “The industry's transition from primarily providing voice services to additionally providing data services has defined the past five years,” says IBISWorld industry analyst Kevin Boyland. “Technological change, namely the transition to fourth-generation wireless data services and the Long Term Evolution standard, will further transform this industry into one that primarily delivers broadband connectivity.”
Japanese wireless carrier Softbank's recent acquisition of Sprint, Sprint's subsequent bid to purchase Clearwire, and T-Mobile's acquisition of prepaid carrier MetroPCS indicate that the industry is headed toward a long-expected consolidation phase. Mergers and acquisitions have become popular because increasing market penetration has made customer acquisition more expensive than when the Wireless Telecommunications Carriers industry was in its strong early growth phase. “As the industry approaches maturity, operators are now scrambling to build their subscriber base” adds Boyland. “A large subscriber base is critical to competitiveness, as it delivers considerable scale economies and thereby enables a carrier to offer cheaper prices and realize higher margins.” Over the next five years, Sprint and T-Mobile are anticipated to try to bolster their competitive positions with respect to major players AT&T and Verizon Wireless through acquisitions and rapidly expanding their 4G network coverage. Despite consolidation, industry employment is forecast to increase through 2017. This growth is due to the large construction and maintenance force the industry will have to employ as it rolls out next-generation network infrastructure.
In the next five years, industry revenue will be driven by growth in the number of potential subscribers as the population and number of devices requiring mobile data expand. As more broadband-enabled smartphones proliferate, more consumers will perceive on-the-go internet access as an essential function of cell phones. These perceptions will benefit the industry and drive revenue growth that is slightly faster than in the previous five years. Going forward, a crucial issue will be how the competition unfolds for wireless spectrum, which is an increasingly rare commodity. For more information, visit IBISWorld’s Wireless Telecommunications Carriers in the US industry report page.
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IBISWorld industry Report Key Topics
This industry operates and maintains switching and transmission facilities to provide direct communication through radio-based cellular networks. Industry services include cellular mobile phone services, paging services, broadband personal communication services and wireless public safety services.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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