Mobile Forecasts Defy Economic Worries

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Revenues from wireless services will experience strong growth over the next year despite widespread economic gloom, predicts telecom and IT research firm Ovum.

According to Ovum's latest projections, mobile connections and revenues will grow by an estimated 6.3% in 2009 over 2008. The firm predicts that the mobile market in Canada will see even stronger growth in 2009, as mobile connections are expected to grow by 7.5% and mobile revenues are expected to grow by 11.3%.

The major driver in continued growth in the North American mobile market is the fact that North American countries still have relatively low rates of mobile penetration, with the United States (85%) and Canada (60%) trailing behind several countries in East Asia and Western Europe, Ovum says.

Ovum says that the United States added 3.9 million mobile connections in the third quarter of 2008 and that total U.S. connections have grown by 10% since the third quarter of 2007. Sprint was the only wireless company to see a drop in wireless connections in the third quarter of 2008, Ovum reports, as Verizon, AT&T, T-Mobile, Alltel and other big wireless companies all reported solid gains in wireless subscribers. Additionally, every major wireless company in both the United States and Canada reported double-digit revenue growth in the third quarter of 2008, except for Sprint, whose wireless segment has lost US$645 million so far in 2008.

Another big driver for mobile revenue over the past year has been the growth in mobile data services, Ovum reports, as both AT&T (51%) and Verizon (43%) have experienced very strong growth in wireless data revenues over the past year. With more carriers subsidizing smartphones such as the iPhone and the BlackBerry Storm, Ovum projects that mobile data revenues will see continued strong growth throughout 2009.

Ovum's sunny projections for mobile data growth come at a time when many tech companies are bracing for a recession by cutting jobs and services. Google has been reported to be slashing 10,000 jobs from its payroll, for instance, while Cisco is shutting down between Dec. 29, 2008, and Jan. 2, 2009, to save money.

This story, "Mobile Forecasts Defy Economic Worries" was originally published by Network World.

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