SMR Broadens its Reach in 1997
WASHINGTON, March 23 /PRNewswire/ -- The specialized mobile radio (SMR)
industry posted its best year ever in 1997, adding approximately one million
new subscribers, according to a newly released market study from The Strategis
Group and the American Mobile Telecommunications Association (AMTA).
The industry's rapid growth has been fueled by the success of digital SMR
services offered by Nextel, the largest SMR operator. In 1997, Nextel added
1.27 million new digital subscribers, but turned off over 200,000 analog
subscribers as it converted much of its analog network to Motorola's digital
iDEN technology. While the sharp decrease in Nextel's analog subscribers
caused the total number of analog SMR users to decline, non-Nextel analog
operators reported subscriber growth of approximately 7% in 1997.
"The tremendous success achieved by digital SMR operators in 1997 has
demonstrated that the combination of mobile telephone service and push-to-talk
dispatch communications broadens SMR's traditional markets," said Steve
Virostek, Director of Messaging and Dispatch at The Strategis Group. "While
this opens up tremendous growth opportunities for mobile radio operators, it
is also drawing powerful new competitors into the dispatch marketplace."
Net Growth of Analog and Digital SMR Subscribers 1994 - 1997
Analog Digital Total
(millions)
1993 1.5 0.0 1.5
1994 1.8 0.0 1.8
1995 1.9 0.1 2.0
1996 1.9 0.3 2.2
1997 1.7 1.4 3.1
Source: The Strategis Group and AMTA
Industry Service Revenues Rise Sharply
Overall revenues per subscriber grew sharply in 1997, powered by the rapid
growth of digital SMR subscribers. Average monthly revenues per digital
subscriber grew from $56 in year-end 1996 to approximately $66 by the end of
1997. Virtually all digital subscribers were interconnected to the public
telephone network, compared with 15% of analog subscribers. Average monthly
revenues per interconnected analog subscriber were $37.30, while average
monthly revenues for dispatch-only subscribers were stable at $16.30.
Churn Rates Reflect Heightened Competition
SMR operators continued to report the lowest churn rates of any mobile
communications service. Analog subscriber churn rates have increased
gradually over the course of the past five years, from 1.2 percent in 1993, to
the current level of 1.7 percent. Nextel, the largest digital operator,
reported a churn rate of "less than 1.5". By comparison, monthly churn rates
for paging subscribers are approximately 2.7% per month, and cellular churn
rates are approximately 1.9% per month.
SMR operators are attributing a growing share of customer churn to
competition from cellular and PCS operators. Twenty-one percent of subscriber
churn was attributed to cellular/PCS competition. This is comparable to
results obtained last year, but more than twice as high as in 1995 and earlier
years.
AMTA President Comments on Industry Growth
Alan Shark, President of AMTA said, "This year's market study contains
more critical information than ever before. We are proud of this work, as
this study marks the 8th year in which AMTA has worked with The Strategis
Group. For the first time, conventional SMR growth was held to only 7% after
nine years of double digit growth. It appears that the cumulative effect of
regulatory uncertainty and specific regulations promoted by both the FCC and
Congress have been recognized. AMTA remains optimistic about the future of
the SMR industry, but the optimism is qualified in that the industry needs
more spectrum opportunities and needs to demonstrate that 'one-size-fits-all'
policies discriminate against smaller wireless carriers."
The Strategis Group -- with offices in Washington D.C., London, and
Singapore -- publishes in-depth market research reports and provides
customized consulting services to the wireless, cable TV, satellite, and
Internet industries. AMTA is a trade association serving the specialized
mobile radio (SMR) industry. For more information on The State of SMR and
Digital Mobile Radio: 1997, please contact Steve Virostek at 202-530-7500
(phone), 202-530-7550 (fax), svirostek@strategisgroup.com or visit
strategisgroup.com. (e-mail).
SOURCE The Strategis Group
CONTACT: Steve Virostek of The Strategis Group, 202-530-7500
Web Site: strategisgroup.com |
