Merrill Lynch increased its forecast for the number of U.S. wireless subscribers it expects to sign up for service by the end of the year, saying it now believes that U.S. carriers will have garnered 16 million new customers during 2003.
More specifically, Merrill said it expects Verizon Wireless to gain 5 million new subscribers and AT&T Wireless Services Inc. to attract 1.5 million new customers. The estimates are based on the number of new subscribers and figure in the number of customers lost.
Merrill expects third-quarter subscriber additions, not including customers lost during the quarter, to be up about 7 percent from last year for the six national carriers. The biggest gainers will be Cingular, Verizon Wireless, Nextel and T-Mobile, with AT&T Wireless and Sprint PCS lagging in gaining market share. AT&T Wireless, however, may realize a boost from online sales for its GoPhone service, which were not accounted for in Merrill’s predictions.
Merrill also increased its 2004 new subscriber predictions and now expects carriers to gain an additional 13 million subscribers during that year. “In the near term, we think that strong subscriber growth and increased usage could result in solid third-quarter results,” said analyst Linda Mutschler, adding predictions for 2004 are less clear.
Wireless local number portability, and especially the possibility of porting a landline number to a wireless phone, could lead to a boost in subscriber numbers, Merrill said. But the service could also lead to further pricing competition and could prompt fixed-line companies to become more aggressive to compete, the analyst firm added.
