Fitch says telecom competition was intense in 4th quarter

Fitch: telecom competition intense in 4th qtr

CHICAGO — Telecommunications and cable industry competition remained strong in the fourth quarter as companies marketed aggressively and offered discounts to reach budget-strapped customers, according to a quarterly report Monday from Fitch Ratings.

Fitch said wireless subscriber additions were strong in the fourth quarter, with nearly two-thirds of this growth coming from resellers and prepaid channels. This reflects subscribers’ “continued sensitivity” to economic conditions, Fitch said.

Prepaid phone plans are cheaper and offered without credit checks or long-term contracts. Though they appeal to budget-conscious customers, their growing popularity is also a sign that the postpaid wireless market is saturated and carriers are offering prepaid plans to reach new customers who wouldn’t necessarily have qualified for a contract.

Fitch said high unemployment and low rates of new home construction, “indicators that tend to be closely linked to telecommunications and cable demand,” … “will likely pressure telecommunications operators’ results well into 2010.”