Innovation & Competition  

CTIA Position:

American consumers are the world’s wireless winners because today’s wireless ecosystem has evolved into a virtuous cycle of innovation and fierce competition. The U.S. regulatory approach has enabled American consumers to benefit from better value and more cutting-edge wireless products and services than consumers in other countries. Due to flexible, market-driven policies, the U.S. wireless industry is the most innovative and competitive. We are the example that other countries try to emulate.

Since Americans demand the latest in wireless technologies, more new products – and frequently the “hottest” selling devices – are first launched in the U.S. This propels wireless innovations to continue at a rapid pace, providing more and better user-friendly services and products and more value for wireless users.

In fact, average wireless per-minute revenue was four times higher in Europe than in the United States, as of the end of 2009. As a result, the average wireless consumer in Europe used just 160 minutes a month compared to more than 824 minutes a month for the U.S. American consumers are clearly getting more for their money.

CTIA and the wireless industry believe that policymakers should focus on what America truly requires from the mobile Internet – affordable wireless broadband access for everyone who needs it. We already have vigorous competition for network quality and capacity, and products and services for end users.

The Federal Communications Commission’s (FCC) long-standing flexible policies, combined with intense industry competition, have created highly innovative, countless choices and tremendous value for consumers. The FCC’s Consumer Survey, released in June 2010, found that “92 percent of cellphone users are very or somewhat satisfied with cellphone service overall.”

Despite the wireless industry’s value to the U.S., whether it’s the fact we directly or indirectly employ more than 2.4 million people or that our economic contributions have grown faster (16 percent) than the rest of the economy (3 percent), the FCC appears focused on micromanaging the wireless industry which will erode this virtuous cycle that benefits America’s wireless consumers.

Key Points:

• U.S. consumers have the most choices and competitive wireless industry than any other OECD country. More than 91 percent of Americans can choose from four or more facilities-based providers (e.g. national or regional carriers), not counting resellers. In the largest U.S. cities, consumers can choose from more than 14 providers. Even in the smallest cities, eight out of 10 consumers can select from 14 or more providers. While the majority of consumers choose a contract plan, more than 20 percent of wireless customers have chosen prepaid or pay-as-you-go. If a consumer doesn’t like something about one provider, he or she has many others from which to choose. In fact, about 66 million Americans, or nearly 25 percent of all wireless consumers, took advantage of these competitive choices and changed carriers last year so they could get the newest innovative products and services and competitive rate plans. Of the top 26 OECD countries, 12 have three facilities-based providers; 12 have four; and only U.S. and Canada have more than five.
• Better value is a hallmark of Americans’ wireless marketplace. The U.S. model for consumer value is changing the way the world views wireless. Over the past decade, global providers have started to offer larger calling plans, and international regulators are considering ways to liberalize their technology requirements to match the innovation and flexibility of the U.S. wireless industry. The average revenue per minute in the U.S. was 4 cents as compared with 16 cents in Europe, as of the end of 2009. This means U.S. consumers get four times more value for their wireless time. Combine that with European consumers using 160 minutes a month on average as compared to Americans’ 824 minutes a month and it’s clear who’s getting a superior wireless deal. According to a GAO report released in August 2010, the cost of wireless service in 2009, adjusted for inflation, is about 50 percent less than in 1999. The report continues to state that [this] “illustrates consumers are getting more wireless service for lower costs than ten years ago.”
• Greater usability features, from devices and applications to speeds, highlight today’s U.S. wireless market, providing consumers with a wider array of options than is available anyplace else in the world. While wireless carriers continue to expand 4G service into major U.S. markets nationwide, 3G is now available to more than 92 percent of all Americans, regardless of where they live. We have more than 123 million unique 3G subscribers, more than the five largest European Union countries combined (France, Germany, Italy, Spain and the UK). The penetration of 3G and 4G (LTE and WiMax) in the United States, combined with this large user market today drives the world’s largest market for wireless devices and services, with more than 630 choices of handsets made for U.S. buyers by 32 different companies. In just two short years since the first application, or applications store opened in July 2008, we have hundreds of thousands of applications available to wireless users on seven different platforms.

Last Updated: October 2010