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U.S. Wireless Data Market Still in Catch-Up

The CTIA announced that data service revenues for the first half of 2006 were $6.5 billion. This represents a 70 percent increase over the first half of 2005. Wireless data revenues now total almost 11 percent of all wireless service revenues.

Sounds like grounds for a celebration, but actually not yet. To put this news into perspective -- the percent of U.S. wireless service provider revenue coming from data-related applications if still less than half of the rate of the leading markets in Western Europe and Asia-Pacific regions.

The current high price of data services, combined with the closed "walled garden" approach to value added service delivery, has handicapped market development within the U.S. marketplace. More specifically, U.S. service provider's approach to manage and control service scarcity is directly responsible for the fact that we're still in a catch-up mode.

The CTIA Semi-Annual Wireless Industry Survey was released at CTIA WIRELESS I.T & Entertainment 2006 event, the world's largest data show, with more than 300 exhibitors and 15,000 attendees. The survey also found that wireless carriers reached record total service revenues of $60.5 billion for the first six months of 2006.

Ironically, the foundation for these results is a near record increase in wireless subscribership. As of June 2006, the industry survey recorded more than 219 million wireless users. This represents a year-over-year increase of 25 million subscribers. The industry's 12-month record for subscriber growth was reached in 2005, when 25.7 million new users came online.

U.S. wireless carriers reported delivering more than 12.5 billion text messages in the month of June 2006, up 72 percent over the 7.3 billion messages for June 2005. The reported number of MMS messages delivered in the first half of 2006 was 1.1 billion, equal to the total number of MMS messages reported for all of 2005. Once again, in contrast, this result is a fraction of the comparable traffic in the leading global markets.

Other highlights of the CTIA survey include: wireless customers using more than 850 billion voice minutes in the first half of 2006, up 27 percent over the first half of 2005, and a $10 billion increase in capital investment.

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