US Phone Subscribers to Reach 236M By 2010

The penetration of mobile telephone service among U.S. consumers is expected to climb from 61% in 2004 to over 75% by 2010 according to researcf firm The Diffusion Group.

According to U.S. Mobile Markets: Analysis & Forecasts, the latest report from consumer technology think-tank, The Diffusion Group, more than 236 million U.S. consumers will subscribe to some form of mobile telephone service by 2010, an increase in demand brought on by (1) continued expansion of 2.5G and 3G networks in major metropolitan areas, and (2) new demand for improved access technologies that enable push email and other services across converged networks.

“Although net subscriber growth will continue to slow dramatically over the next five years, the promise of improved mobile access technologies and the new services they enable are cause for optimism,” says Ed Wallace, consulting analyst with The Diffusion Group. “New networks mean new services, and new services entail new sources of incremental revenue and a generally more “sticky” service offering, especially when bundled with wireline services.”

Other important findings of the study include:

• By 2010, mobile phone subscribers will climb to 75% of the US population or approximately 236 million users.
• In 2005,119 million handsets will be sold generating revenue for handset vendors of more than $17 billion.
• The average sales price (ASP) of mobile handsets will remain flat at $145 during this period.
• The ratio of subscriber growth to handset sales varied widely among US wireless carriers. For example, Verizon grew its subscriber base by 16% in 2004 but its growth in handset sales to new customers and upgrades only increased 8%. However, while Cingular/AT&T grew the number of subscribers a mere 6%, the Company will sell or upgrade its 49 million customers with 32.2 million phones in 2005 (a 46% increase over last year).
• New access technologies will help drive demand for next-generation smart phones by providing a seamless Internet experience for such things as “push email.”;
• Market segments with the greatest opportunity for growth will continue to be the youth category, which TDG expects to double between 2004 and 2010 – from 25 million to 50 million subscribers.