Profit rises for wireless sector

Global revenues from wireless services will experience strong growth over the next year despite widespread economic gloom, said telecom and IT research firm Ovum.

According to Ovum's latest projections, mobile connections and revenues will grow by an estimated 6.3 per cent in 2009 over 2008. The firm predicts that the mobile market in Canada will see even stronger growth in 2009, as mobile connections are expected to grow by 7.5 per cent and revenues are expected to grow by 11.3 per cent.

The major driver in continued growth in the North American mobile market is the fact that the region still has relatively low rates of mobile penetration, with the United States (85 per cent) and Canada (60 per cent) trailing behind several countries in East Asia and Western Europe, Ovum said.

The United States added 3.9 million mobile connections in the third quarter of 2008 and that total US connections have grown by 10 per cent since the third quarter of 2007. Sprint was the only wireless company to see a drop in wireless connections in the third quarter of 2008, Ovum reported, as Verizon, AT&T, T-Mobile, Alltel and other big wireless companies all reported solid gains in wireless subscribers.

All major wireless company in both the United States and Canada reported double-digit revenue growth in the third quarter of 2008, except for Sprint, whose wireless segment has lost $645 million (Dh2.3 billion) in 2008. Also, the big driver for mobile revenue over the past year has been the growth in mobile data services.