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Analyst predicts wireless price war, says industry is "collapsing"

13 марта 2009

Wireless phones are among the most pervasive material objects in our society. Nearly everyone has one. And that’s the problem.

A mobile phone industry analyst published a pointed report today asserting that wireless carriers will have extraordinary difficulty continuing to grow. The analyst, Craig Moffett from Sanford C. Bernstein & Co., based his report on an analysis of recent data from the major carriers showing subscriber growth falling faster. He says wireless carriers are suffering from a collective case of inflated optimism. He said that if things play out the way he projects, the industry could face a second whammy: price wars. If that happens, he said, wireless carriers together could see flat revenue growth. “There is much more at stake than simply subscriber forecasts,” he writes. “If some or all of the wireless companies fall short of their 2009 growth projections — as we expect- then there is a much higher risk that one or more will resort to aggressive price action.”

“This industry is collapsing,” Mr. Moffett said in an interview. “The whole wireless business is grinding to a halt.”

The wireless carriers have said they believe there will be plenty of growth as consumers move to the more powerful devices known as “smartphones.” Carriers like that because smartphone users subscribe to data plans that bring in more revenue.

Mr. Moffett notes that in 2008, wireless carriers added 5.9 percent more subscribers in the United States, but he thinks they will add only 3 percent this year. But, he said, subscriber growth could flatline by year’s end based on the rapid pace at which subscriber growth is falling. In the first quarter of 2008, subscriber growth was 16 percent lower than it had been in the first quarter of 2007; by the fourth quarter of 2008, the rate of subscriber growth was 39 percent lower than the fourth quarter of 2007. He asserts the problem is exacerbated by the recession but that tough economic times are not really the issue. The problem is, simply, that most people have phones and service.


By Matt Richtel

Источник: NY Times

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