Wireless Telecommunications: A Recession-Proof Industry?
The agency that is officially in charge of declaring a recession in the United States is known as the National Bureau of Economic Research, or NBER. The NBER defines a recession as a "significant decline in economic activity lasting more than a few months." During times of economic inflation, people tend to cut out things like leisure spending. They also budget more, spend less on items they usually indulge in, and start saving more money. As people and businesses start finding ways to cut costs and curtail unneeded expenditures, the GDP begins to decline. Then, because consumers are not spending as much money, companies start laying off workers in order to cut more costs, leading to a rise in unemployment rates. It is these combined factors that manage to drive the economy into a state of recession.
There are some industries here in the U.S and across the globe that are not impacted significantly from a recession as most others are. Some of the more common "recession proof" industries include healthcare, discount retailers, state and federal government, and energy. What makes these industries recession proof? Demand! Governments have to keep operating, people still get sick and require medical treatment, and cars and homes still require gas and oil to operate. These services and products are not optional for everyday life. They are a necessity. But what about cell phones? Are cell phones and wireless connectivity optional for everyday life or a necessity to our way of life and our economy? While sales in some sectors within the mobile industry soften – network 6 infrastructure and chipsets, for example – other sectors, like mobile devices and entertainment, continue to boost industry growth. The net result is a growing and robust $700 billion industry fueled by expansion in developed and developing nations.
According to the CTIA, the International Association for the Wireless Telecommunications Industry, there were approximately $270 million wireless subscribers in the U.S. at the beginning of 2009, an increase of almost 6% from the year before. However, the real story is not subscriber growth, but data growth. Data growth includes texting, video, pictures, ringtones, and various phone applications. Almost 78% of wireless consumers have web-enabled devices. Having the internet on a cell phone has opened a whole new world of possibilities including finding directions to your favorite restaurant, checking sports-related information, or getting the latest updates on your facebook page. In the last year, six application stores offering over 40,000 applications to consumers were opened and 20,000 new applications are expected by year end. Data Revenue in 2008 was a $32.3 billion industry, with an increase of 32.9% from the year before. America is clearly working with wireless.
The impact of the wireless industry on the U.S. economy is huge. The wireless industry as a whole is responsible for 2.4 million jobs nationwide. This includes wireless carriers and jobs directly or indirectly affected by the wireless industry. Wireless carriers alone are responsible for 270,000 jobs, which have grown 6% every year for the last 5 years. Additionally, these jobs are higher-paying jobs, paying 50% more than the national average. The industry is also putting its money to work for the future. In 2008 alone, the industry spent approximately $21 billion in capital expenditures, wireless networks, and infrastructure. This is unlike most businesses in other industries who were cutting costs and laying off employees.
In an economic climate filled with challenges and uncertainty, wireless continues to be an increasingly vital part of our development and growth offering high paying jobs and working to improve U.S. infrastructure.