FCC: Competition alive and well in wireless telecom

In a recent report, the FCC declared that competition in the wireless space remains strong, unlike other telecom sectors. Prices continued to drop in 2000—falling about 25%—and consumers were given more choices, as about 90% were able to select from at least three wireless carriers last year.

“The wireless industry is one of a few in telecom in which we do see lowering prices, unlike in the DSL or cable modem [sectors] where cost is actually rising,” concurred Elliott Hamilton, an analyst at The Strategis Group.

The FCC expects prices will continue to decline, which will raise some concern within the carrier community, Hamilton continued. “This puts pressure on carriers as far as their ARPUs (average revenue per user), which is why they are looking for new 3G services to add that extra $10 or $15 per month,” he explained.

The report also found that the average number of minutes consumers used each month last year climbed 38%, to 255 minutes from 185 minutes in 1999. However, Hamilton suggested that the growth rate should begin to slow.

“Can you keep increasing the number of minutes people will want to use; it already is high now,” he said. “We see the minutes of use [reaching] a plateau because it is hard for people to double their usage from 300 minutes to 600.

According to the FCC, the sector brought in more than $52.5 billion in revenue last year, up from more than $40 billion in 1999. Subscribers also were on the upswing in 2000, as 39% of Americans (109.5 million) now have a mobile phone, said the report.