A report by Fitch Ratings confirms what many wireless industry professionals already know: Wireless services are relatively recession-resistant, but churn could increase as more employees are laid off in the macro-economy.
The latest biannual wireless report, released late last week, notes that in addition to being viewed by consumers as a necessity-type service, recent growth for wireless communications has been fueled by aggressive smartphone promotions and strong uptake of data services.
Still, Fitch, like others, notes that some postpaid consumers could be forced to limit discretionary services associated with data plans or possibly switch to unlimited prepaid calling plans. The prepaid space is an increasingly competitive one as service providers seek to add and keep customers.
A survey on behalf of New Millenium Research Council (NMRC) last month declared the era of penny pinching has officially arrived. Two out of five Americans with contract-based cell phone services said they were likely to cut back on cell phone plans if the economy gets worse over the next six months.
Fitch expects operators to report net addition pressure from subscriber losses in the enterprise/business segment, particularly from financial services, due to the weak labor market.