Communication Slowdown

Communication has stalled slightly, as findings from TNS Telecoms, a division of Taylor Nelson Sofres, indicate a decrease in the average total telecommunication spending by American consumers – the first in more than three years. The research also indicated a significant slowing to the increase in wireless phone and Internet adoption, with slight declines in growth for both services.

“While there are certainly many factors contributing to this trend, it is clear that consumers’ communications spending is not immune to the pressures of the broader economy,” commented Charles White, vice president, TNS Telecoms.

Despite a dip of $2.22 from 3Q 2002 to 4Q 2002, the average total communications spending for the year was up more than $34 from 2001 to 2002. TNS Telecom includes local, long distance, wireless, Internet and cable/satellite TV spending in the total.

Average Total Communications Spending
1Q00	$123.19
2Q00	$125.99
3Q00	$127.30
4Q00	$128.99
Yearly	$505.47
1Q01	$131.48
2Q01	$134.89
3Q01	$136.58
4Q01	$139.05
Yearly	$542
1Q02	$140.57
2Q02	$142.83
3Q02	$147.44
4Q02	$145.22
Yearly	$576.06
Source: TNS Telecoms

According to White, 3Q 2002 results clearly place Verizon in third place when measured by total households, reflecting Verizon’s transition from a regional carrier to a full telecom service provider. White also notes that wireless continues to represent a greater percentage of the average total telecommunications expenditures of households at 27 percent, compared to just 24 percent one year ago.

Currently, Internet spending accounts for 11 percent of total consumer spending on communications services with the average amount spent by Internet households increasing to $28.59 from $26.17 just one year ago.

American Online’s Internet service captured 28.6 share of the households, and 27.3 percent of revenues, followed distantly by MSN at 7.4 percent and 6.9 percent respectively. Earthlink trailed with 5.3 percent of household share, and 5 percent of revenues.

Commenting on the findings, White said, “In the changing marketplace of telecom services it is always important to understand where a company’s market share is growing as well as declining. In particular there is no question that high speed Internet access continues to be a market with room for additional growth.”

With the exception of AT&T Broadband, cable/satellite operators revenue share outpaced household share.

Cable/Satellite Services
Company	Share of Households	Share of Revenue
AT&T Broadband	14.6%	13.7%
Time Warner	13.9%	14.5%
DirecTV	13%	13.8%
Comcast	9.4%	9.8%
Dish Network	9.2%	9.6%
Charter	8.6%	9.2%
Other	32.1%	29.5%
Source: TNS Telecoms