Wireless services continue to drive results for the North American telecommunications industry, with wireless companies reporting solid financial and customer growth performance in the first half of 2005, as reviewed in a new Fitch Ratings quarterly wireless report published last week. Net additions in the USA increased to 11.6 million during first-half 2005, an increase of over two million in first-half 2004. Fitch expects similar growth for in second-half 2005, with expectations for net additions in excess of 24 million subscribers.
Churn, stable in 2004, decreased in the first half with the majority of operators making significant strides in improving subscriber retention through enhanced customer service, improved network quality, and upgraded handsets.
The Canadian wireless industry also continues to show strong and profitable growth, as reflected in first-half 2005 results. Fitch believes that the favorable characteristics of the Canadian wireless industry offer considerable support to Canadian operators’ credit profile, with growth, profitability, and cash flow expectations likely to exceed those of U.S. carriers.
Wireless growth will remain the key element for regional Bell operating companies to maintain a strong credit profile, as Fitch says that it expects that wireless growth will offset the expected fixed-line losses and mitigate financial erosion caused by voice-over-Internet protocol (VoIP) competition.