Outlay for wireless calls set to pass that for wired calls

Growth in an industry that has been slumping

October 21, 2003|By Jon Van | Jon Van,CHICAGO TRIBUNE

Spending for wireless phone service is poised to overtake spending on traditional phone calls for the first time by the end of the year, according to a survey to be released today.

In the April-June quarter, household spending for wireless phone service was 9 percent higher than in the January-March quarter, while spending for landline phones dropped 4 percent, according to data from TNS Telecoms, which tracks consumer bills.

At midyear, the average household was spending $48.28 a month on wired phone service and $44.63 on wireless. If the trend continues, wireless spending will surpass spending on traditional phones by the end of the year, said Charles White, TNS Telecoms vice president. "If you just look at local phone service, wireless is already beating wire line," said White. "When you combine local and long distance, wire line spending is still ahead, but it's falling and wireless is rising."

While the phone industry has slumped during the past two years, wireless has provided the sector's strongest growth. Two-thirds of U.S. households have at least one wireless phone.

At phone giants such as SBC Communications Inc. and Verizon Communciations Inc., revenues have declined because of the shift, and both companies would be in far worse shape if it weren't for their wireless phone operations.

But with six national companies and some regional carriers offering wireless service, no single company can corner telecommunications revenues to the extent that was common in the traditional wired world.

The survey found that 4 percent of households have opted for the flat-rate wired phone service that typically charges about $50 a month for unlimited local and long distance calling. That market is dominated by MCI, which began offering the package last year, with 46 percent of the market. Verizon is second with 27 percent.

The Chicago Tribune is a Tribune Publishing newspaper.

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