U.S. Cellular Market Exhibits Solid Growth, According to Dataquest

San Jose, Calif., March 25, 1996—The United States cellular market grew 30 percent in 1995 as revenue reached $20 billion, and the number of cellular subscriber units shipped increased 36 percent, according to a new Dataquest report. Revenue growth trailed subscriber growth in the market because of reduced pricing in all areas-monthly, use, and roaming. Dataquest expects the market to continue to do well in the coming years.

"Continued strong growth in cellular, coupled with the introduction of the first broadband Personal Communications Services (PCS) network, has stoked the fires for an industry explosion in 1998," said John Ledahl, director of Dataquest's Personal Communications program. "With this kind of energy charging it from the service provider segment, the demand for cellular and PCS will continue to grow for the rest of the decade."

AT&T Wireless was the big winner in 1995 as it grew 38 percent to 16.6 percent of the total market. The merger of Bell Atlantic and NYNEX cellular operations moved the company into the No. 3 position with 10.4 percent of the U.S. cellular service market (see Table 1).

Table 1
United States Cellular Service Market Share Estimates
(Thousands of Subscribers)

                                1994       1995    1994-1995  1995 Market
Company                  Subscribers  Subscriber  Growth (%)    Share (%)
AT&T Wireless                  3,873      5,345          38         16.6
Southwestern Bell Mobile       2,979      3,659          23         11.4
Bell Atlantic NYNEX            2,589      3,356          30         10.4
GTE MobileNet                  2,154      3,011          38          9.4
BellSouth Cellular             2,156      2,847          32          8.9
Others                         9,880     13,919          41         43.3
Total                         23,631     32,137          36        100.0
Source: Dataquest (March 1996)

"The cellular infrastructure market grew at a surprisingly moderate rate of 10.3 percent to $2.8 billion in 1995, up from $2.5 billion in 1994," said Clint McClellan, industry analyst in Dataquest's Personal Communications program. "Cellular carriers deployed just enough cells to keep up with new incremental subscribers. They didn't spend any more money than necessary in 1995."

AT&T Network Wireless Systems, now known as Lucent Technology, continues to lead the cellular infrastructure market with 36.7 percent of the market. Northern Telecom grew 43 percent in 1995, and its market share rose from 11.9 percent in 1994 to 15.6 percent in 1995 (see Table 2).

Table 2
United States Cellular Infrastructure Market Share Estimates

                                1994 Market              1995 Market
Company                           Share (%)                Share (%)
AT&T Network Systems                   36.3                     36.7
Ericsson                               29.2                     27.3
Motorola CIG                           21.5                     19.2
Northern Telecom                       11.9                     15.6
Others                                  1.0                      1.2
Total                                 100.0                    100.0
Note: Because of rounding, 1994 total does not equal 100 percent.
Source: Dataquest (March 1996)

Additional information about the cellular market is available through Dataquest's new report titled Personal Communications Services and Equipment Market Share. For more information about subscribing to this program, call 800-419-DATA. More information about Dataquest's programs, descriptions of recent research reports, and full text of press releases can be found on the Internet at http://www.dataquest.com.

Dataquest, founded in 1971, is a global market research and consulting company serving the high-technology and financial communities. The company provides worldwide market coverage on the semiconductor, computer systems and peripherals, communications, document management, software, and services sectors of the information technology industry. Dataquest is a GartnerGroup [ http://www.gartner.com/ ] Company.