Wireless Telecommunications Industry Analysis

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A web page address being entered on web browser. (Image: Janka Dharmasena/iStock/Getty Images)

The wireless telecommunications industry is growing and changing constantly. By the end of 2014, the world is expected to have 3 billion internet users and 2.3 billion mobile-broadband subscribers, according to Brahima Sanou, Telecommunication Development Bureau director at the International Telecommunication Union, or ITU. Certainly not all these internet and broadband consumers use wireless telecom services to connect, but many of them do.

On the Move

In 2012, for the first time, wireless users spent more for data services than for voice services. Value Line, a leader in investment research, states that the industry remains in growth mode at the time of publication. However, the wireless networking industry is a volatile sector of the economy, with significant fluctuations in stock prices. Larger companies tend to squeeze smaller providers out of the market over time through competition, mergers or acquisitions.

World Trends

More than half of the world's mobile-broadband users now live in developing countries. According to ITU statistics, worldwide saturation of mobile-broadband will be at least 32 percent by the end of 2014, four times what is was in 2009. In developed countries alone, 84 percent of the market will be covered. Globally, mobile-cellular subscriptions are expected to near 7 billion by the end of 2014, a market saturation rate of 96 percent worldwide.

Major U.S. Providers

The major companies in the industry that provide wireless services in the United States include AT&T (NYSE: T), Sprint Corporation (NYSE: S), T-Mobile US Inc. (NYSE: TMUS), US Cellular (NYSE: USM) and Verizon Wireless, a subsidiary of Verizon Communications (NYSE: VZ). AT&T posted $5.05 million in profits from the company's wireless ventures in the first quarter of 2014, up from $3.9 million in the last quarter of 2013. Although T-Mobile reported a much greater gain in subscribers than its competitors did, the company recorded a $151 million loss in the first quarter of 2014. Both Sprint and US Cellular reported subscriber losses in the same quarter, and Verizon, the largest U.S. wireless provider for the quarter, reported modest gains in subscriber numbers and income.

Analyzing Individual Companies

When investors look at individual companies within the wireless industry, market share and competitive services and products offered are key indicators of future growth. Other factors to consider are the company's overall financial condition, technological advancements and historical performance. Experts consider that most companies in the wireless industry that do not provide a wide array of other services offer investors high growth that carries above-average risk due to the instability of stock values.

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