The wireless industry in the United States has long been a source of fascination for analysts due to its ability to consistently outpace population growth in terms of adding new phone customers. Analyst Craig Moffett of MoffettNathanson Research recently delved into this phenomenon in a report, highlighting the industry’s “excess growth” that has persisted for years. Despite being a fully saturated market, the wireless industry continues to experience rapid growth, with total industry growth exceeding population growth year after year.
One commonly cited explanation for this excessive growth is the increasing number of young people getting their first phones at a younger age. While this may account for some of the growth, it falls short of explaining the magnitude of the gap between phone growth and population growth. Moffett suggests that another factor driving this growth could be gig workers who use multiple phones for their work.
Gig workers, such as drivers for companies like Uber, Lyft, and DoorDash, often use second or third phones to manage their business. These drivers may use separate phones for different platforms, for navigation and personal calls, or for tax purposes. The use of multiple phones by gig workers could be contributing to the overall growth of the wireless industry, as these workers require additional devices for their work.
In addition to gig workers, other factors may also be driving phone growth in the United States. Roger Entner, founder of Recon Analytics, points to trends such as the use of phantom lines, where additional lines are added to existing accounts for free, as well as the increasing prevalence of individuals owning both personal and business phones. The shift in the first responder community towards using separate personal and business phones for security and privacy reasons may also be contributing to the growth of the wireless industry.
While gig workers play a role in the growth of the wireless industry, Moffett and Entner both suggest that they are not the primary drivers of this growth. The correlation between gig worker growth and wireless phone growth is just one factor among many influencing the industry’s expansion. However, the gig economy is likely closely tied to net immigration, and any changes in immigration policies could impact the number of gig workers in the U.S., potentially affecting subscriber growth in the wireless sector.
Looking ahead, analysts predict continued growth in the wireless industry in 2025. With estimates of total U.S. net adds for wireless increasing, the sector is poised for further expansion. As the industry continues to evolve, factors such as gig workers, immigration trends, and changing consumer behaviors will play a role in shaping its future growth.
