Despite a fiercely competitive environment, the wireless industry continues to grow both its subscriber counts and top line, helped in large part by rapidly expanding demand for mobile data services. The ten public companies for whom we had financials collectively grew first quarter revenue by a healthy 9.5% compared with the year earlier period—although the acquisition of Alltel by Verizon Wireless accounted for some of that increase. Together, the group generated $44.8b in revenue in the March quarter. For the trailing twelve months, overall wireless revenue expanded by 2.3% to nearly $172b.
On average, the group’s subscriber base increased by 13% year-over-year; the median growth rate was 8.5%. Leap Wireless (Nasdaq:LEAP) and MetroPCS (NYSE:PCS), both of whom continue to aggressively launch new markets with their all-you-can-eat service plans, topped the list with 40% and 37% annual growth in subscribers, respectively. AYCE is the “plan du jour” in this difficult economy, as consumers increasingly are looking for ways to get more bang for their buck, and in many cases, these customers are moving to wireless as a landline replacement service.
Overall, OIBDA for the group also expanded in the first quarter, by 11.6% to $14.3b, but on a trailing twelve month basis the growth was just 2.9%, and four of the ten suffered a decline in year-over-year cash flow. Competitive pressures are weighing on ARPU and roaming revenue for several of those we track. United States Cellular (NYSE:USM), T-Mobile, Sprint Nextel (NYSE:S) and LEAP saw their operating income before depreciation and amortization decline anywhere from 3.5% to nearly 22% on a year-over-year basis.
Despite the push by many to upgrade their networks for next-gen services, capex declined for the group overall, by 13.8% to $4.675b in the first quarter. On a trailing-twelve-month basis, capital investment fell by 3.3%, to $21.8b, but as the year passes we would expect to see the capex figure rise again. As a percentage of revenue, wireless capex averaged just under 17% in 1Q09.
The following contains our analysis of the operating results of each of the public pure-play wireless companies through 1Q09, including a summary of the operating and financial highlights over the past year.