Subject: [NEXTEL-1] FCC ADOPTS ANNUAL REPORT ON STATE OF COMPETITION IN THE WIRELESS INDUSTRY

From: [email-masked]
Date: Thu, 26 Jun 2003 15:35:51 -0400

FOR IMMEDIATE RELEASE                                               NEWS MEDIA
CONTACT:
June 26, 2003
Meribeth McCarrick at (202) 418-0654

FCC ADOPTS ANNUAL REPORT ON  STATE OF COMPETITION IN THE WIRELESS INDUSTRY

Washington, D.C. – The Federal Communications Commission has adopted its Eighth
Annual Report on the state of competition in the Commercial Mobile Radio Services
(CMRS) industry.  The Eighth Report concludes that the CMRS industry is
competitive and, during 2002, experienced increased service availability, lower
prices for consumers, and a greater diversity of service offerings. The Commission
also announced that it will conduct another Notice of Inquiry on CMRS competition
in order to gather additional data for use in next year’s CMRS competition report.

Specifics of the Eighth Report:

Revenues and Service Availability:  During 2002, the mobile telephone sector
generated more than $76 billion in revenues, and the number of mobile telephone
subscribers rose from 128.5 million to 141.8 million, resulting in a nationwide
penetration rate of roughly 49 percent.  Broadband PCS and digital SMR licensees
continued to deploy their networks.  To date, 270 million people, or 95 percent of
the total U.S. population, live in counties with three or more different mobile
telephone operators, and more than 236 million people, or 83 percent of the U.S.
population, live in counties with five or more operators competing to offer
service.

Digital Deployment:  Digital technology is now widespread in the CMRS industry.
Approximately 278 million people, or 97 percent of the total U.S. population, live
in counties where operators offer digital mobile telephone service, and digital
subscribers made up approximately 88 percent of all mobile telephone subscribers
at the end of 2002, up from 80 percent at the end of 2001.

Prices and Minutes of Use: During 2002, subscribers’ average monthly cell phone
usage continued to rise and the price per minute of mobile telephone service
continued to fall.  Minutes-of-use per month averaged 427 between June and
December 2002, an increase of 12 percent from 380 during the same period in 2001.
Estimates for the decrease in the price of mobile telephone service during 2002
range from one to nine percent depending on the methodology employed.

Mobile Data Services: Mobile data services have begun to play a more significant
role in the CMRS industry.  While such services generated only one percent of
total industry revenue during 2002, an estimated 11.9 million, or 8 percent, of
the 141.8 million mobile telephone subscribers at the end of 2002 subscribed to
some type of mobile Internet service.  An additional 2.3 million consumers
subscribed to mobile Internet services on data-only mobile devices at the end of
2002.  Mobile data providers began offering a variety of new services to consumers
during the past year, including downloadable ring tones and graphics, multimedia
messaging services, and interactive gaming.  In addition, established services,
such as text messaging and e-mail, continued to grow in popularity.  It is
estimated that 20 percent of all mobile telephone subscribers used text messaging
services during the fourth quarter of 2002.

Next Generation Technologies: Mobile telephone carriers continued to upgrade their
networks with next generation technologies (including General Packet Radio Service
and CDMA 1xRTT) that allow them to offer mobile data services at higher data
transfer speeds typically ranging from 30 to 70 kilobits per second.  As of March
2003, operators were offering services over these next generation networks in at
least some portion of U.S. counties containing 265 million people, or 93 percent
of the U.S. population.

The conclusions reached in the Eighth Report are based on the analysis of several
measures of competition, including: the number of carriers competing in an area,
the extent of service deployment, prices, technological improvements and product
innovations, subscriber growth, usage patterns, churn, and investment.  Several
sources of information were used in the Eighth Report, including data and
statements provided in the comments submitted in response to the Notice of Inquiry
(FCC 02-327) released in December 2002 seeking data for the Eighth Report, the
Commission’s Numbering/Resource Utilization Forecast (NRUF) database, and public
sources such as company SEC filings, data compiled and released by trade
associations and by other government agencies, reports by securities analysts and
other research companies and consultants, company news releases and web sites, and
newspaper and periodical articles.

Action by the Commission on June 26, 2003 by Eighth Report (FCC 03-150). Chairman
Powell, Commissioners Abernathy, Martin, and Adelstein, with Commissioner Copps
Concurring.  Chairman Powell and Commissioner Copps issuing separate statements.
FCC Contacts: Chelsea Fallon at (202) 418-7991 or e-mail: [email-masked] or Ben
Freeman at (202) 418-0628 or e-mail: [email-masked].
WT Docket No. 02-379
- FCC -

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