We recently heard that U.S. wireless carriers could see the worst net customer additions in years during the first quarter, according to a research note from investment banking firm Jefferies & Company. The firm said that the U.S. wireless industry as a whole could experience its first ever net loss of postpaid subscribers during the period.
“Over the longer term, we believe the wireless industry faces the twin headwinds of 100%+ penetration and, eventually, decelerating smartphone additions as the base reaches saturation,” Jefferies’ analysts wrote. “Voice revenues are already in decline. We believe a material drop off in the growth rate of data revenues from slowing smartphone adoption, particularly in 2H12, is a growing risk.”
Arguably, the cellular communications marketplace has reached a point of saturation in terms of customer acquisition. Network operators are increasingly reliant upon cannibalizing customers from each other and growing revenue from non-voice communications. There are many other potential areas for driving revenue growth and improved profitability including:
• Subscriber data mining and management
• Leveraging presence and location determination
• Value-added Service (VAS) applications and content
• Working with third party application and content providers
• Mobile advertising, commerce, stored value and subsidized services
• Expanding the scope of Machine-to-Machine (M2M) communications
• Leveraging network improvements such as Self Organizing Networks (SON)
• Provide Free-to-End-user (FTEU) applications and services paid by third parties
We believe there are many opportunities for network operators to increase revenues and improve margins without focusing solely on the competition.
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