Wireless Won't Suffer, Ovum Predicts

One of the questions service provider executives are trying to answer is whether communications and multi-channel video services will hold up as well as they have in past recessions. Through the third quarter there still had been no evidence of damage. Some will note that the impact of October's credit crisis will not be seen until the fourth quarter, and that is a correct observation.

But there might be reasoned hope for stability. As noted before, only in one year since about 1945 has wireline revenue growth even flattened. With that single exception, wired network revenue always has grown, recessions or not.

Cable TV revenues have had the same sort of pattern since the 1980s, for example, and at least so far, there has been no detectable evidence of mobile revenue slowing.

In fact, Ovum predicts the North American mobile market will escape catastrophe as a result of macroeconomic conditions in 2009 and will continue to grow, albeit not at the rates we have seen in 2008, predicts Steven Hartley, Ovum senior analyst.

Ovum argues that U.S. mobile connections will rise 6.3 percent while revenue also rises 6.3 percent in 2009. In Canada connections are expected to grow 7.5 percent while revenue grows 11.3 percent.

The United States added 3.9 million connections in the third quarter and year-on-year total connections growth was 10 percent, Ovum says. Only Sprint saw a decline in connections in the third quarter (losing a net 1.3 million subscribers.

Canada's national wireless operators also saw continued connections growth, with Rogers connections base growing eight percent year-on-year, Bell Canada growing seven percent and Telus 10 percent.

One might argue that the fourth quarter will not be so robust, or that the real damage to come will be in the margin area, not the revenue area. Still, growth at the level Ovum predicts would be fairly convincing proof that wireless now has attained "necessity" status.