Saturation in the wireless market

The wireless penetration level in the US in 2006 was about 80% and reached approximately 87% in 2007 and 91% in December 2009, indicating possibility of slower growth rates in the future. The saturation of the US wireless market may adversely affect the top line growth of telecom companies. Most telecom companies are relying on volumes to grow their wireless revenues as intense competition has negated any possibility of growing through higher prices. The growth in the wireless segment in the past few years has largely come from higher volumes. Pricing pressures in the wireless segment are now so high that most telecom companies are reporting a decline in average revenue per user (ARPU) year after year. As the wireless penetration rate in the US reaches a saturation point, telecom companies will not be able to grow by adding subscribers. Wireless revenues, as a result, may start declining.Value-added services have enabled Sprint Nextel to maintain a high ARPU. However, saturation in the US wireless market may force other companies to offer value-added services in order to stem the decline in their ARPUs. This, in turn, may put pressure on the ARPU of Sprint Nextel. … "Saturation in the wireless market" has a significant impact, so an analyst should put more weight into it. "Saturation in the wireless market" will have a long-term negative impact on this entity, which subtracts from the entity's value. This statements will have a short-term negative impact on this entity, which subtracts from its value. This qualitative factor will lead to an increase in costs. This statement will lead to a decrease in profits. "Saturation in the wireless market" is a difficult qualitative factor to overcome, so the investment will have to spend a lot of time trying to overcome this issue.