Execs put positive spin on wireless industry

Despite boom-time claims, growth is slowing

Executives speaking at the largest wireless conference in the U.S. painted a glowing picture of the industry, pitching it as one of the only success stories in a difficult worldwide economy.

"We are one of the few good news stories among industries in turmoil," said Robert Dotson, chairman and CEO of T-Mobile, speaking during the opening keynote at the CTIA conference in Las Vegas on Wednesday.

"In an economy that seems to have forgotten how to grow, wireless keeps reminding us," said Ivan Seidenberg, chairman and CEO of Verizon.

While both operators posted revenue gains for last year, their financial reports weren't all good news. Both showed slowing growth in the acquisition of new customers.

In the fourth quarter 2008, T-Mobile added 621,000 customers, compared to 951,000 in the previous year. The average revenue per customer for T-Mobile also dropped by US$2 for the quarter.

Verizon added 1.4 million customers in the fourth quarter, compared to over 2 million in the same period in 2007.

The executives cited solid growth for 2008 over 2007 in terms of overall mobile usage.

Some analysts late last year cut their estimates for growth in 2009 so it's unclear yet if that growth is continuing today. At the end of 2008, 270 million people in the U.S. subscribed to wireless services, an increase of 15 million from the year before, said Steve Largent, president and CEO of CTIA. They used 2.2 trillion minutes, more than 100 billion over the total minutes used in 2007.

One of the biggest growth statistics is in text messaging. The 1 trillion text messages sent in 2008 is almost triple the number sent the previous year, Largent said.

"Our industry is vibrant, a shining light in unfortunately troubled time," he said.

The executives said they don't see people cutting back on their wireless service as they try to trim their budgets. "One place people aren't sacrificing is staying connected," said Dotson.

But some recent research says otherwise. Over 15 percent of mobile users surveyed by the New Millennium Research council said that they have already cut back on features including Internet connectivity, e-mail and texting because of the economy.

The survey also found that 40 million people, or 26 percent of consumers with contract phone plans, are more inclined than they were six months ago to switch to prepaid service to save money.

Dotson also promoted the openness of the Android platform.

Mobile operators and users may have different ideas of what open means, with Dotson indicating that from his perspective it means opportunities for application developers.

He showed a short video in which Jason Hudgins, a developer of the ShopSavvy application, said, "It's completely open. There's no third party saying you can't do that."

In fact, T-Mobile is itself a third party telling developers what they can and can't do.

At least one developer has recently revealed that his Android application, one that lets people connect their phone to a laptop so the laptop can connect to the Internet over the cellular network, has been pulled from the Android Market for running foul of T-Mobile's terms of service.

Still, Dotson's speech was a real pep talk, urging industry leaders to work to help drive the ailing economy. "These are tough times," he said. "We need to be courageous, to be the driving force in getting the U.S. economy off the ground."

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