Mobile call price declines to slow -Sprint exec
Wed Mar 29, 2006 7:49 PM ET
NEW YORK, March 29 (Reuters) - The price of mobile phone calls should decline more slowly in 2006 than in recent times as the duration of phone calls expands less rapidly, a top executive at Sprint Nextel Corp. (S.N: Quote, Profile, Research) said on Wednesday.
U.S. operators have driven down the price of mobile phone calls in recent years as they tried to win new customers or steal each other's subscribers in the fiercely competitive market, which had as many as six national operators at one point.
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But as increases in the amount of time customers spend on the phone slow, operators will likely be less aggressive in lowering their prices this year, according to Len Lauer, chief operating Officer of Sprint, the No. 3 U.S. cellphone service.
"There will be some price declines, but I think it will be a little more restrained than previous years," Lauer told investors at a Bank of America conference here.
While the average customer monthly cellphone minutes of use had increased as much as 35 percent a year in recent years, Lauer expects an industry growth rate between 10 percent and 16 percent this year.
Ovum analyst Roger Entner estimated that average U.S. mobile phone call prices have dropped about 72 percent to about 6.5 cents a minute, down from about 24 cents a minute in 2001.
There are now four national U.S. wireless providers.
Sprint bought Nextel in 2005, and Cingular Wireless bought AT&T Wireless the year before. Cingular, the No 1 U.S. wireless company, is owned by AT&T Inc (T.N: Quote, Profile, Research) and BellSouth Corp. (BLS.N: Quote, Profile, Research), which plan to merge.
Verizon Wireless, a venture of Verizon Communications (VZ.N: Quote, Profile, Research) and Vodafone Group Plc (VOD.L: Quote, Profile, Research), is the No. 2 U.S. service provider, and T-Mobile USA, owned by Deutsche Telekom AG (DTEGn.DE: Quote, Profile, Research), is ranked No. 4 by subscriber numbers.
