The U.S. Mobile Voice Market Is Saturated: So What?

The Cellular Market In The US Is Saturated – 24/7 Wall St

Verizon Wireless, AT&T, Sprint and T-Mobile have almost 260 million wireless subscribers. The U.S. population is 305 million people and some of those are too young to need or use a phone. Others don’t want one.

During the last quarter, Verizon added only 423,000 new contract subscribers and AT&T only 512,000 customers, rates that are lower than has been the case in past quarters.

So what does that mean? What it always means: providers will have to create new products to sell to a base of existing customers, rather than selling more of the existing product to new customers. In the cable and telecom business, that has meant both getting into new lines of business as well as "bundling."

For wireless providers, the new product is wireless broadband, immediately in the form of more smartphone data plans, but over time more use of wireless to support sensor networks of various types.

But there are wider policy implications as well. U.S. regulators sometimes behave as though nothing they do will seriously impede the ability of U.S. service providers to continue to invest and innovate. But both the wireline and wireless segments of the communications business face huge challenges. Existing growth models are exhausted and competition is growing.

Instead of behaving in ways that essentially are punitive, perhaps regulators should ask what they can do to allow the fastest-possible transition to new business models as the old models continue to waste away.

Telecom is not a growth industry; that should be obvious to all observers. The big challenge is to foster a transition to a sustainable model that will support continued investment in state-of-the-art facilities. Telecom, to put it bluntly, is not an industry that needs to be punished; it needs to be fostered.