More and more Americans are shifting away from landlines to cell phones. The annual wireless communication report, published by the Federal Communications Commission, has confirmed this trend by revealing that nearly 90 percent of all U.S. residents now use mobile service, and almost one out of every four households has no landline phones at all.
After breaking down the figures by age demographic, the FCC found out that the number of people dropping landlines are more prominent in certain age groups than others: Among young adults aged 25 to 29, over 50 percent rely solely on their cellular devices nowadays.
The shift from fixed lines to cell phones does not bode well for landline-only companies, but for big wireless providers, this is in fact a welcome changeover. For instance, AT&T and Verizon Wireless, offering both landline and wireless services, are cashing in on consumers' rising demand on mobile data service. According to the report, while the monthly average revenue on voice service per user across the industry has declined from $47 in 2004 to $33 in 2009, data charge has surged from $1.55 to $12 over the same period. Of 308 million people living in the country in 2009, 55.8 million – an adoption rate of 18 percent – have subscribed to a data plan.
In addition to data services, the usage of text messages has also surged in the U.S. In 2009, the number of messages sent by the average user each month was 488, a huge increase from 2006 when it was merely 69.
When it comes to overall profitability, in late 2009, Verizon led the wireless industry with a 45 percent of EBITDA margins, followed closely by AT&T with 40.7 percent. MetroPCS and T-Mobile, the third and the fourth, both enjoyed relatively steady profit margins in the past few years. However, the rest of the pack, including Leap Wireless, U.S. Cellular and Sprint Nextel, witnessed slumps over the period.
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