THE CELLULAR MOBILE MARKET IN THE USA – MARCH 1999
The first commercial wireless phones went into service in Chicago on 13 October, 1983.
By 1997, just 14 years later, there were over 50 million customers in the USA. By comparison, it took 24 years from the introduction of television before 50 million households had one. Thirty-nine years elapsed before radio reached 50 million households. And it took 77 years for land-line phones to reach 50 million customers.
The cellular market has been dominated by analogue services. It was only in 1998 that digital services started to take over the growth in that market. The analogue market peaked at 61 million users. By late 1998 close to 100% of new sales were digital. Within digital the PCS market started to leap ahead of the traditionally cellular market in 1999. Now more customers are added to the PCS systems than are connected to the cellular networks. The following table doesn’t include the PCS market.
During 1998 the overall market grew dropped to just under 22% from 55 to 67 million subscribers. Growth for 1997 was 28%.
The Average Revenue Per User (ARPU) has been declining steadily. In 1992 this bill was still around US$70 but in 1998 it fell under US$40. However, the leading cellular operators are still averaging monthly revenues above US$50 per subscriber per month.
A dramatic changed occur in 1998 when the ARPU for traditional cellular services dropped from $52 to $33 per month. PCS was able to stay ahead with a smaller drop from $66 to $61. However, increased discounting will see the ARPU further drop over the next few years.
For the next five years the average growth is expected to be around the 13%, according to IDC/Link, coming from lower income families and young people under 25 years of age. We however, estimate the annual growth at a much higher percentage (20-30%) as the American market has not yet reached its full potential. There are some entrenched problems with the way the Americans use mobile phones, which is hampering growth.
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