Why We Will Make Money From Wireless
The wireless phone industry has had amazing growth over the years. Have you ever wished you could go back in time and invest even just $500 dollars in a cellphone company, the results would be staggering. Take a look at this article written in the USA Today on March 30 By Leslie Cauley:
After years of go-go growth, the number of people signing up for cellphone service in the USA is finally slowing.
That could spell good news for consumers as carriers turn up the marketing heat, says Craig Moffett, a senior analyst at Bernstein Research and author of a report documenting the trend.
“When operators have no choice but to try to take customers away from each other, they have a natural inclination to sharpen the pencils and make the best offer they can,” he says.
The wireless industry added 23% fewer subscribers in the first quarter this year than it did last year. The overall growth rate — how fast the total is growing — dropped to 7.9% from 11.5%, and will “slow further from here,” the report said. Moffett says carriers are victims of their own success. “The vision of every adult in America having a cellphone is a great aspiration until you get there. Then it raises the obvious question: Now what?” For years, wireless was a story of heady growth. As of year-end 1995, the USA claimed 33.8 million subscribers. By December 2007 the number had jumped to 255.4 million, a sevenfold increase. About 83% of U.S. consumers have at least one cellphone. By 2010, the number will rise to 89%, Bernstein predicts. At that level, Moffett says, everybody who wants a cellphone will already have one. For carriers, wireless analyst Charles Golvin of Forrester says it’s now about “stealing your competitors’ customers.”
For now, AT&T and Verizon continue to add a lot of customers — more than 1 million each in the first quarter. But Moffett says that’s only because they can feed on Sprint Nextel, which is struggling with operational problems. Customers are deserting Sprint by the thousands, providing easy pickings for rivals, he says.
“If Sprint can right the ship, then subscriber numbers for the rest of the industry are necessarily going to have to take a leg down,” he says. Carriers are pinning their hopes on wireless data, which is exploding as Web-enabled wireless devices such as the Apple iPhone start flooding the market. At AT&T, the sole iPhone distributor in the USA, data revenue is growing by more than 50% every quarter. Moffett says that’s not enough to make up for the waning growth of wireless voice customers, who still account for 87% of revenue growth at Verizon and AT&T. Mark Collins, an AT&T vice president, allows that it’s tougher to recruit new subscribers. On the upside, he says, there are plenty of revenue opportunities. “That’s why we’ve been investing like we have for the past three years” in high-speed wireless data and advanced video services. And Sprint says its future is bright. “We believe the future of wireless is data, and that’s our sweet spot,” says spokeswoman Leigh Horner. Sprint has teamed with Google and other backers, including wireless visionary Craig McCaw, to build an advanced wireless data network across the USA.
There were a few interesting things in there. The biggest one that stands out is how the companies are going to be fighting for each others customers. That is where Lightyear Alliance comes in. Throughout the history of cell phones the companies have been collecting the monthly payments and keeping them for themselves. Now, we will have a cut of the profits when our customers pay their cell phone bills every month. This is an industry first and something you should look into.
This is your chance to do what we all dream of, get a piece of the wireless pie, and it’s going to be good.
If you enjoyed this post, please consider to leave a comment or subscribe to the feed and get future articles delivered to your feed reader.
Comments
No comments yet.
Leave a comment