PARSIPPANY, NJ, October 16, 2001 - The U.S. wireless industry had a net gain of 5.2 million subscribers to reach a cumulative base of 119.4 million subscribers at the end of the second quarter of 2001. InfoTech predicts that by 2005, the U.S. wireless subscriber base will increase to 191 million. These findings are in the recently published report by InfoTech "The Wireless Business Connection".

Many carriers are still feeling the impact of a weakening economy, yet most posted modest gains in subscribership and revenue during the second quarter. Carriers, such as Verizon Wireless (NYSE: VZ), added over 800,000 subscribers to end the quarter with just under 28 million subscribers and over $4 billion in revenue. Sprint PCS (NYSE: PCS) added the most subscribers in the industry during the second quarter with 843,000 subscribers; its revenue increased by 53% to over $2.26 billion. AT&T Wireless (NYSE: AWE) completed its spin-off from AT&T during the quarter and added 668,000 subscribers.

Even with respectable gains in subscribership and continued growth, the wireless industry is currently facing its toughest challenge--lack of spectrum for next-generation services. NextWave’s dispute with the FCC is still not resolved. Moreover, in light of the terrorist events on September 11, it is very unlikely that the Department of Defense (DoD) will relinquish the 1700 MHz spectrum to wireless carriers because of the increased priority on national security in the U.S. Instead, the FCC will begin offering the carriers use of the 2500 MHz band with one catch, they will have to share the spectrum with incumbents, such as WorldCom (NASDAQ: WCOM) and Sprint (NYSE: FON). These incumbents offer fixed wireless broadband in this range, which could interfere with the carriers’ services.

The FCC is expected to lift the spectrum caps that regulate the amount of spectrum in a given market that each wireless carrier can own. InfoTech predicts that lifting the spectrum caps will trigger a wave of acquisitions by carriers seeking to obtain badly needed spectrum to expand their capacity and coverage and to offer next-generation services. "You are already seeing signs of consolidation beginning with Verizon negotiating to buy Dobson Communications (NASDAQ: DCEL), and Alltel’s (NYSE: AT) attempts to purchase CenturyTel (NYSE: CTL) ", said Shelly Tyler-Radler, senior analyst at InfoTech.

InfoTech is a subsidiary of PBI Media, specializing in global information and professional services for the telecommunications and data networking industries. InfoTech offers a comprehensive scope of information and professional services, including custom project consulting, market and competitive intelligence programs, tactical sales support tools, primary research studies, industry conferences and custom marketing programs. Further information about InfoTech can be obtained at the company's web site at www.accessintel-infotech.com.

To purchase or learn more about this or other InfoTech studies, please contact Mark Ricca at 973-602-0124 (infotech@accessintel.com).