Moody's Investors Service increased its outlook for the U.S. wireless carrier segment to "positive" from "stable," citing growth of mobile data.
Moody's indicated that wireless operators will benefit from users trading up to smartphones, which carry with them a required monthly data plan. As such, the firm predicts U.S. subscribers to grow in the low single digits, but the data plans should help revenue increase faster.
Moody's also said that having more subscribers will help carriers take advantage of economies of scale and improve cash flow.
"The industry has performed above expectations during a period of economic stress, and it should continue to grow as macroeconomic conditions improve," said Moody's senior vice president Dennis Saputo. "We believe consumers will continue to make wireless expenditures a priority even as personal discretionary income remains under pressure."
However, Moody's named one major challenge ahead for operators: the multi-billion dollar investment requirement to deploy 4G.
For more:
- see this AP article
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