Carriers Counting Their Cash
By Carlo Longino, Thu Apr 28 23:15:00 GMT 2005

First-quarter earnings are in from a number of operators around the globe, and things are looking good -- mostly.

Following last week's round of results from handset vendors, carriers are stepping up this week. In the US, number-two operator Verizon turned in a very strong quarter, while numbers 1 and 3, Cingular and Sprint, also gave generally positive reports. Nextel followed, leading smaller carriers with good results of their own. The US market is still showing strong subscriber growth, but the consolidation doesn't appear to be helping ARPU, which is shrinking across the board.

Across the Pacific in Japan, KDDI said it returned to profit in its fiscal fourth quarter, but investors focused on its outlook for the current year, though, as the company said profits would take a hit due to intense competition in the mobile-phone market. NTT DoCoMo, which signed up twice as many 3G subscribers as KDDI in 2004, is also expected to take a hit when it reports its earnings next month thanks to increased retailer subsidies and other marketing costs -- all of this while ARPU slides for both operators.

Staying in Asia, South Korea's biggest operator, SK Telecom saw profits fall significantly, thanks mainly to losing customers to its rivals, moves bolstered by the introduction of number portability. Competitors KTF and LG Telecom, conversely, saw their profits jump. SK, too, saw ARPU fall, a trend it's trying to reverse through its investments in wireless data and video services.

So, if the Western mobile market does follow Asia, it doesn't look like operators have got a lot to look forward to.