Most recent telecom news has been doom-and-gloom, but there may be a slightly brighter LED at the end of the tunnel.
Research firm Gartner Inc. said Tuesday that about 315 million cellphones were sold in the fourth quarter of 2008, down 5% from a year earlier, but "we are seeing growth in 2010," a spokesperson said. "It will be very moderate, but growth."
Virgin Mobile USA posted a narrower fourth-quarter loss and returned to customer growth in a sign that more people are considering prepaid wireless plans.
Reversing two quarters of customer defections, Virgin Mobile added 216,000 net new users to end the period with a base of 5.4 million. The company's turnaround underscores the increasing reluctance of consumers to commit to a multiyear service plan given the uncertainty over the economy.
Net service revenue rose 10% to $326.7 million.
Helping Virgin Mobile is the increasing popularity of "hybrid" plans, which offer a set number of minutes at a standard price without a contract. When the plans launched a year ago, they attracted a third of all new customers who signed up. Now, more than half of Virgin Mobile's customers choose a hybrid plan.
The plans have helped Virgin Mobile reverse a trend of declining monthly revenue per user. The average revenue per user in the fourth quarter was $21.14, up from $20.36 a year ago.
The rate of customer cancellations -- typically higher for a prepaid service -- fell to 4.8% from 5.1% a year ago. Virgin Mobile faces stiff competition from Leap Wireless International Inc., MetroPCS Inc. and Sprint Nextel Corp.'s Boost, all of which offer flat-rate calling plans without a contract. (info from The Wall Street Journal)
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