Dear wstera: A note on this:
"Separately, Merrill Lynch issued a research
report to clients on the wireless telecom sector. Analyst Linda Mutschler raised her estimate
for the increase in penetration of the wireless industry to 8.9 percent from 7.0 percent."
Linda's report is on the U.S. market. The 8.9% increase expected is for 2000. Here are the highlights and one paragraph from the meat:
Investment Highlights:
During 1Q 00, subscriber growth was stronger than expected. Then, during
2Q 00, most of the operators reported net adds that were sequentially flat
or up during the quarter—which meant that 2Q 00 was stronger than
expected.
As a result, we estimate that the US wireless industry added over 11 million
net new subscribers during 1H 00, for a total of over 97 million US wireless
subscribers at the end of June. And according to the Cellular
Telecommunications Industry Association (CTIA), US wireless subscribers
exceeded 100 million by early August.
So, what does this mean?
A year ago, we raised our US penetration estimates significantly for 2000
and beyond. At that time, we estimated that during 2000, the US would add
7% of incremental penetration or 20.5 million net adds for an ending base
of 106.5 million for 37.7% penetration.
Given 1H 00 results, we are raising our estimates again. We estimate that
the US wireless industry will add 8.9% of incremental penetration or 26
million net subscribers during 2000E, for an ending base of 112 million for
39.7% penetration.
In addition, we are raising our incremental penetration estimate in 2001
from 9% to 10% and in 2002 from 10% to 11%. This implies ending
penetration of 49.6% in 2001 and 60.6% in 2002. Our 2003 ending
penetration rate is now an estimated 69.5%.
However, we want to point out that incremental penetration doesn’t usually
grow in such a nice linear fashion. In most other countries, once
penetration picks up, it really picks up—with some countries posting
double the incremental penetration rates we’re currently estimating.
We continue to recommend AT&T Wireless (AWE, C-1-1-9, $24.875)
Nextel (NXTL, D-1-1-9, $50.75), Sprint PCS (PCS, D-1-1-9, $46.75) and
Western Wireless (WWCA, D-1-1-9, $44.25).
[snip]
During 1998, incremental penetration in the US grew a
mere 4.8%. During 1999, incremental penetration
stepped-up slightly, to 5.8%. Until today, we were
estimating 7% incremental penetration during 2000, which
we have now revised to 8.9%—to date, by far, the largest
single-year increase in US penetration.
[snip to end]
Regards,
Lynn |
