Hope for High Holiday Sales in a Bah-Humbug Year

The mall is packed, the parking lot is a war zone and long lines are taking their toll. It’s almost the season of giving, and wireless carriers are hoping to see a big share.

“We typically get about a third of our net additions during the fourth quarter,” said Philip Junker, Alltel (www.alltel.com) executive vice president of marketing.

Holiday shopping traditionally ends the year on a good note for most businesses, and 2001 certainly could use the seasonal cheer.

“What we’ve seen, based on our historical data, is that the fourth quarter really drives growth and enhances sales for every operator,” said Ozgur Aytar, Strategis Group analyst for mobile wireless research (www. strategisgroup.com ).

In 4Q00, AT&T Wireless gained about 35% of the year’s total subscriber additions (www.attws.com ).

“In 2000, we added 2.5 million subscribers,” said Alexa Graf, AT&T spokesperson; “865,000 of those were added in the fourth quarter.” Cincinnati Bell Wireless added 61,000 subscribers in 4Q00, or approximately 34% of the year’s additions (www.cbwireless.com ).

“November and December are definitely our two strongest activation months,” said Kit Hagen, Cincinnati Bell senior marketing manager. But, what about the supposed economic slowdown?

“Remember, the issue is: Is there even a slowdown?” asked Herschel Shosteck, Shosteck Group president (www.shosteck.com ). “While sales by the equipment vendors have dropped, there’s a paradox in that the number of minutes keeps going up, and the number of subscribers keeps going up.” John Byrne, Kagan World Media (www.kagan.com ) wireless analyst, said that because the wireless industry still is growing, the slowdown isn’t having strong ramifications.

“In the first half of the year, we’ve seen wireless growth at about the same level as last year despite the economic downturn,” he said. “Carriers are still hopeful that that trend will continue into the Christmas season.”

Byrne said that the fourth quarter accounted for 28% of carriers’ total revenue in 2000, and between 29% and 30% in 1999.

This may sound hopeful. But, with recent reports from the Commerce Department that consumer confidence and spending is declining, perhaps the holidays won’t be full of cheer.