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Wireless Service Overtakes Wireline As Greatest Portion of Customer Spending While Total Telecom Spending Growth Stalls

Posted on: Wednesday, 20 October 2004, 09:00 CDT

Total U.S. household spending on wireless services now represents the largest share of dollars spent on telecommunications services according to the most recent data released by TNS Telecoms, a global provider of market information and analysis for the telecommunications industry. In the second quarter of 2004, 30 percent of spending on telecommunications services was dedicated to wireless service while wired line service represented 29 percent of spending, a drop of three percent from the previous quarter. The average U.S. household spends $47.87 on wireless service each month and a total of $158.88 on all telecom services. At the same time, the second quarter results also show that growth in total telecom spending has stalled with a decline of one percent from the spending in the previous quarter.

"These results represent the nature of the hyper-dynamic telecommunications market today," says Charles White, vice president of TNS Telecoms. "As the total size of the market stalls service providers will increasingly be battling against other telecom services for growth."

As of the second quarter of this year, 70 percent of households have at least one wireless phone with the average household with a wireless phone spending $69.94 each month, an amount which continues to grow. Alternatively, 96 percent of households have a fixed wired line in their home with an average spending of $54.78, but both of these wired line numbers continue to decline, albeit slowly. -0- *T Telecom Industry Market Share and Tracking - Second Quarter 2004 Service Penetrations Service Penetration Change from Last Rate Quarter ----------------------------------------------------------- Local 96% -1 ----------------------------------------------------------- Wired Line Long Distance 85% 1 ----------------------------------------------------------- Wireless 70% 1 ----------------------------------------------------------- PC 76% -1 ----------------------------------------------------------- Internet At Home 68% 0 ----------------------------------------------------------- Cable TV 60% -3 ----------------------------------------------------------- Satellite TV 22% -1 ----------------------------------------------------------- PDA 14% -1 ----------------------------------------------------------- Paging 7% 0 ----------------------------------------------------------- *T -0- *T Wired Line Share of Revenue (Share includes total spending on local, IntraLATA and InterLATA long distance and local and LD integrated plan spending) Company Share of Change from Last Revenue Quarter ------------------------------------------- Verizon 21% -1 ------------------------------------------- SBC 18% -1 ------------------------------------------- BellSouth 11% 1 ------------------------------------------- AT&T 9% -1 ------------------------------------------- Qwest 7% 0 ------------------------------------------- MCI 5% 0 ------------------------------------------- Sprint 6% 0 ------------------------------------------- Other 18% -4 ------------------------------------------- *T -0- *T Share of Bundled Customers (Share of households with bundled local and LD services provided under one plan) Company Share of Change Share of Change Households from Last Revenue from Last Quarter Quarter ---------------------------------------------------------------------- Verizon 37% -5 29% -6 ---------------------------------------------------------------------- MCI 18% -3 22% -4 ---------------------------------------------------------------------- Sage Telecom 8% 4 7% 3 ---------------------------------------------------------------------- Frontier/Citizens 3% 0 3% 0 ---------------------------------------------------------------------- AT&T 8% 3 10% 3 ---------------------------------------------------------------------- SBC 5% 0 6% 0 ---------------------------------------------------------------------- Sprint 4% 0 5% -1 ---------------------------------------------------------------------- Comcast 4% 1 4% 1 ---------------------------------------------------------------------- Other 14% 2 14% 3 ---------------------------------------------------------------------- *T -0- *T Local Phone Services Market Share Company Share of Change Share of Change Share of Change All from Non-Bundle from Customers from Households Last Revenue Last in Last (Includes Quarter (Includes Quarter Service Quarter all only Territory households households including without those with bundles) bundles) ---------------------------------------------------------------------- Verizon 24% -2 25% 0 82% -4 ---------------------------------------------------------------------- SBC 23% 0 22% 0 79% -1 ---------------------------------------------------------------------- BellSouth 12% 1 15% 1 87% 0 ---------------------------------------------------------------------- Qwest 8% -1 9% 0 83% 0 ---------------------------------------------------------------------- Sprint 6% 1 6% 0 96% -2 ---------------------------------------------------------------------- Other 27% 7 25% 1 N/A ---------------------------------------------------------------------- *T -0- *T Long Distance Phone Service Market Share (Includes IntraLATA and InterLATA calling) Company Share of All Change Share of Non- Change Households from Bundle Revenue from (Includes all Last (Includes only Last households Quarter households Quarter including those without with bundles) bundles) ---------------------------------------------------------------------- AT&T 23% -3 26% -4 ---------------------------------------------------------------------- SBC 17% 3 12% -1 ---------------------------------------------------------------------- Verizon 15% 1 8% 0 ---------------------------------------------------------------------- MCI 9% -1 9% 0 ---------------------------------------------------------------------- Sprint 7% 0 6% 0 ---------------------------------------------------------------------- BellSouth 5% 1 6% 3 ---------------------------------------------------------------------- VarTec 4% 0 2% 0 ---------------------------------------------------------------------- Qwest 5% 1 4% 1 ---------------------------------------------------------------------- Other 32% 1 27% 1 ---------------------------------------------------------------------- *T -0- *T Wireless Services Market Share Company Share of Change from Share of Change from Households Last Revenue Last Quarter Quarter ---------------------------------------------------------------------- Verizon Wireless 26% -1 28% 1 ---------------------------------------------------------------------- Cingular 19% 2 17% 1 ---------------------------------------------------------------------- AT&T Wireless 14% -3 13% -3 ---------------------------------------------------------------------- Sprint PCS 9% 0 10% 0 ---------------------------------------------------------------------- T-Mobile 8% 1 7% 0 ---------------------------------------------------------------------- ALLTEL Mobile 6% 0 6% 1 ---------------------------------------------------------------------- Nextel 4% 0 6% 0 ---------------------------------------------------------------------- Cellular One 2% 0 2% 0 ---------------------------------------------------------------------- Other 13% 1 10% 0 ---------------------------------------------------------------------- *T -0- *T Internet Service Market Share (Includes Dial-Up and High Speed Access) Company Share of Change from Last Share of Change from Households Quarter Revenue Last Quarter ---------------------------------------------------------------------- AOL 18% -2 16% -2 ---------------------------------------------------------------------- MSN 5% 0 4% 0 ---------------------------------------------------------------------- Comcast 7% 0 11% 0 ---------------------------------------------------------------------- Earthlink 5% 0 5% 0 ---------------------------------------------------------------------- SBC Yahoo 6% 0 7% 0 ---------------------------------------------------------------------- Time Warner 3% -1 5% 0 ---------------------------------------------------------------------- Other 55% 3 52% 2 ---------------------------------------------------------------------- *T -0- *T Cable/Satellite Service Market Share Company Share of Change from Share of Change Households Last Revenue from Quarter Last Quarter ---------------------------------------------------------------------- Comcast 24% 0 24% -1 ---------------------------------------------------------------------- DirecTV 13% 0 15% 1 ---------------------------------------------------------------------- Time Warner 11% -1 11% -2 ---------------------------------------------------------------------- Dish Network 12% 0 12% 0 ---------------------------------------------------------------------- Charter Communications 8% 0 8% 1 ---------------------------------------------------------------------- Cox Communications 7% -1 7% 0 ---------------------------------------------------------------------- Adelphia 6% 0 6% 0 ---------------------------------------------------------------------- Other 19% -1 18% 0 ---------------------------------------------------------------------- *T -0- *T Share of Customer Spending (Share of total telecom spending for each product category) Service Share of Change from Last Revenue Quarter ------------------------------------------------ Wired 29% -1 ------------------------------------------------ Wireless 30% 1 ------------------------------------------------ Video 27% 0 ------------------------------------------------ Internet 13% 0 ------------------------------------------------ *T -0- *T Average Consumer Spending (for all households) Service Average Monthly Percent Change Spending from Last Quarter ------------------------------------------------------- Wired $46.70 -3% ------------------------------------------------------- Wireless $47.87 3% ------------------------------------------------------- Cable/Satellite TV $43.54 -1% ------------------------------------------------------- Internet $20.77 -1% ------------------------------------------------------- Total $158.88 -1% ------------------------------------------------------- *T -0- *T Average Consumer Spending (only for households which actually use the service) Service Average Monthly Percent Change Spending from Last Quarter ------------------------------------------------------- Wired $54.78 -5% ------------------------------------------------------- Wireless $69.94 3% ------------------------------------------------------- Cable/Satellite TV $54.03 1% ------------------------------------------------------- Internet $30.54 1% ------------------------------------------------------- *T -0- *T Average Wired Line Spending Service Average Percent Average Percent Monthly Change Monthly Change Spending for from Spending from Non-Bundled Last for Last Customers Quarter Bundled Quarter Customers ---------------------------------------------------------------------- Local $35.82 0% Included N/A ---------------------------------------------------------------------- Local Toll/ IntraLATA $1.27 -28% Included N/A ---------------------------------------------------------------------- Long Distance/ InterLATA $8.20 -10% Included N/A ---------------------------------------------------------------------- Total Wired Line Spending $45.29 -3% $65.70 -4% ---------------------------------------------------------------------- *T -0- *T Share of Communications Wallet Share of Communications Wallet represents the percentage of the total consumer dollars spent with each provider on Communications services. Share of Change from Company Communications Previous Quarter Wallet ----------------------------------------------------------- Comcast 8% 0 ----------------------------------------------------------- Verizon Wireless 8% 1 ----------------------------------------------------------- Verizon 7% -1 ----------------------------------------------------------- SBC 7% 0 ----------------------------------------------------------- Cingular Wireless 5% 1 ----------------------------------------------------------- Sprint 5% 0 ----------------------------------------------------------- DirecTV 4% 0 ----------------------------------------------------------- BellSouth 4% 0 ----------------------------------------------------------- Time Warner 4% 0 ----------------------------------------------------------- T-Mobile 4% 2 ----------------------------------------------------------- AT&T Wireless 4% 0 ----------------------------------------------------------- Dish Network 3% 0 ----------------------------------------------------------- AT&T 3% -1 ----------------------------------------------------------- Cox 3% 0 ----------------------------------------------------------- Charter 3% 1 ----------------------------------------------------------- Qwest 2% 0 ----------------------------------------------------------- AOL 2% 0 ----------------------------------------------------------- ALLTEL 2% 0 ----------------------------------------------------------- MCI 2% 0 ----------------------------------------------------------- Other 22% 1 ----------------------------------------------------------- *T

About the Research

TNS Telecoms collects responses through its ReQuest(R) Survey and Bill Harvesting(R) database from 32,000 U.S. households that provide their complete set of telecommunications bills, promotional bill inserts and telecom direct mail communications each year. In the business market, TNS Telecoms' BusinessWave(R) research gathers telecom behavior information from small, medium and large businesses across the U.S. Together this syndicated information provides a number of product offerings including databases, TNS reports and online applications allowing national, state, city and micro level analysis across the U.S.

About TNS Telecoms

TNS Telecoms, the specialist telecoms division of TNS, is a global provider of strategic and tactical market information and analysis for telecom service providers and the entire telecommunications industry. Its range of syndicated research solutions and custom capabilities allows TNS Telecoms to meet the changing market information challenges of telecom-related businesses. For more information please go to http://www.tnstelecoms.com.

About TNS

TNS is one of the world's leading providers of market information. The company delivers strategic market measurement, analysis, insight and advice to many of the world's largest organizations and most recognized brands. TNS' research helps its clients better understand the needs and wants of their customers, and its capabilities span market segmentation, advertising and communications, new product development, brand performance and stakeholder management. The company is also one of the leading providers of social and political polling. From its global network that spans 70 countries who together conduct research in more than 110 countries, TNS allows for local expertise and knowledge to be combined together with internationally consistent information and analysis.

TNS is listed on the London Stock Exchange (TNN) and is a trade mark of Taylor Nelson Sofres plc. Further information can be found on http://www.tns-global.com.

**Editor's Note: Please source all data and tables as "Source: TNS Telecoms." Third Quarter 2004 Tracking Metrics will be available in January 2005. Bill Harvesting and BusinessWave are registered trademarks of TNS Telecoms.

Source: Business Wire

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