The wireless market is finally starting to reach its saturation point, with last quarter's subscriber growth being the slowest in over a decade. According to a new report by Chetan Sharma consulting, last quarter saw the industry add 2.4 million subscribers, the lowest total since wireless telecommunications starting to soar in the nineties. The growth was primarily thanks to the strong postpaid subscriber growth by Verizon, while both T-Mobile and Sprint saw postpaid user declines. 2 million of the new subscribers added were prepaid users, a market that we've already noted is growing at a much faster rate thanks to the fact carriers there are actually trying to compete on price.

Carriers have been fortunate in the States to so far avoid the downtick in instant messaging seen overseas, but the loss of this revenue is inevitable. Carriers are already trying to compensate for the death of voice minutes and SMS revenue with new shared data plans (essentially price hikes), but as subscriber growth slows Sharma notes that carriers are going to have to find some new tricks to keep revenues up and please investors:

quote:

---

In Q3 2012, for the first time, there was a decline in both the total number of messages as well as the total messaging revenue in the market. It might be early to say if the decline has begun or the market segment will sputter along before the decline takes place. As we had outlined in our fourth wave paper, once the market segment reaches the 70-90% penetration mark, the decline begins and we might be seeing the start of the decline in messaging revenue. The decline is primarily due to the rise in IP messaging and operators have been slow to evolve their strategies in the segment.

---

We've already seen several unpopular ideas grow out of this concern, such as trying to charge content companies extra to be able to advertise their content won't count against caps, to charging customers more for using particular content. The collision between net neutrality interests and the desire to keep massive revenues afloat will create some significant strain over the next few years.