Indeed, the cellular duopoly is long gone. Broadband PCS operators have achieved coverage of half of the U.S. population in a little more than a year after beginning their launch. Combining these new entrants with the incumbent cellular operators means that these markets have five, six, and seven companies providing mobile telephone services. Second, consumers churn. Other estimates by Andersen Consulting and Herschel Shosteck indicate that wireless industry churn is around 30 percent annually.
Recent surveys indicate that price is the most important factor in deciding to churn for consumers.
Third, price trends are downward. During 1997, a series of quarterly surveys found that during the year the price per minute of mobile telephone service dropped between 15 and 34 percent depending on the number of minutes purchased. Fourth, innovation is strong. Cellular and PCS hand sets are getting smaller and smaller. The paging industry is responding to heavy competition with new two-way narrowband PCS technologies that, personally, I love.