CTIA report shows healthy wireless industry

The Cellular Telecommunications and Internet Association's (CTIA) semi-annual report on the state of the wireless industry that revealed some surprising statistics that counter the theory that price wars are eroding the value of the wireless business.

In contrast, the report showed price elasticity, said Todd Rethemeier, wireless analyst with Bear Stearns. “This report reinforces our thesis that price elasticity remains alive and well and ARPU (average revenue per user) is not vulnerable to the steep declines many have warned about.”

CTIA’s report, which analyzed the first half of 2002, said average minutes of use per customer per month totaled 403 minutes, with ARPU of $47.42, an increase of 5 cents from 2001. While pricing is competitive, this rise in usage continues to offset the per-minute price reductions, said Rethemeier.

Total service revenues increased 19%. U.S. carriers earned service revenues of $36.7 billion in the first six months of 2002, up from $30.9 billion for half of 2001.