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FCC Releases Mobile Market Analysis

For the first time since 2002, the Federal Communications Commission in its federally mandated annual Mobile Wireless Competition Report did not conclude that the market is competitive, rather that it has become more concentrated over recent years. The report, which reflects the state of the cell phone market for 2008 and 2009, determined that the mobile wireless ecosystem is "sufficiently complex" so that several factors need to be taken into consideration when doing an analysis of competitive market conditions.

"Rather than reaching an overarching, industry-wide determination with respect to whether there is 'effective competition,' the report complies with the statutory requirement by providing a detailed analysis of the state of competition,'' the report said.

FCC chairman Julius Genachowski said that the commission is not trying to draw a blanket conclusion about the level of competition in the industry, and applauded the granular approach the report took. "Instead, the report complies with Congress' mandate to assess market conditions by providing data on trends in competition and choice over time," he said in a statement.

The report identified several key trends, including a maturation of the mobile voice segment, the need for mobile broadband spectrum, a transition to a more data-centric market, robust capital investment that is declining relative to industry size, and a proliferation of devices and applications.

At the end of 2008, 90% of Americans had a mobile wireless device, and used these devices to talk for an average of 709 minutes each month, the report said. Contributing to the rise in data usage, handset makers released 67 new smartphones in 2008 and 2009, with the Android and iPhone platforms gaining significant traction.

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