Almost nine in 10 of all U.S. adults have a cellphone, according to a Pew Research Center survey. Middle-income consumers increased their telephone spending in 2011 by $59, almost as much as the $64 in additional telephone spending by the 20% of consumers with the highest incomes, according to the Labor Department data.
But the question for the industry is how much bigger bills can get before the cuts in other parts of the family budget grow too painful, says a Wall Street Journal story today.
Families with more than one smartphone are already paying much more than the average—sometimes more than $4,000 a year—easily eclipsing what they pay for cable TV and home Internet. The average household’s annual spending on telephone services rose to $1,226 in 2011 from $1,110 in 2007, when Apple’s iPhone first appeared.
U.S. wireless carriers brought in $22 billion in revenue selling services such as mobile email and Web browsing in 2007, according to analysts at UBS AG. By 2011, data revenue had jumped to $59 billion. By 2017, UBS expects carriers to be pulling in an additional $50 billion a year.
As wireless service gets more expensive, the trade-offs become more painful. That could threaten to further crimp consumer spending elsewhere—or slow the upward swing in consumer spending on wireless, says the WS Journal.