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The potential for growth in the North American wireless industry is far higher than in the more mature markets of Europe and Asia, according to a new report from Merrill Lynch.
The study, titled “Where’s the Growth? Lessons from Japan and Korea,” paints a bleak portrait of European and Asian wireless markets. Among its key findings:
- Asian carriers are suffering declining per-unit revenues despite state-of-art third-generation data infrastructures.
- At an average of 1 cent per message, European short message service pricing is unsustainable.
- Users are increasingly able to download ring tones, games and other content directly from computers to their handsets, entirely bypassing wireless carriers.
Meanwhile, the North American market has far more room for growth, according to the study:
- Wireless spending is 1 percent or less of gross domestic product, representing a smaller percentage than other markets.
- With 57 percent of U.S. residents using cell phones and 42 percent of Canadians going mobile, wireless penetration is lower.
- Data accounts for a smaller, but increasing proportion of wireless revenues.
The report concludes that wireless revenues will grow at 7.5 percent in the United States over the next five years and at 10 percent in Canada. But European revenues are expected to grow at only 4 percent as average revenue per user increases at a meager 1.1 percent annually.
