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Wireless execs: Slump? What slump?

CEOs from two major U.S. cell phone service providers say Wall Street was wrong to say the cell phone industry was mired in a downturn.

ATLANTA--Chief executives from two major U.S. cell phone service providers tried to convince thousands of their colleagues gathered here that the investment community was wrong to say the cell phone industry suffered when the economy soured in the late 1990s and early 2000s.

"There's been this misconception that the industry had a down year each of the last three years," Stan Sigman, chief executive of Cingular Wireless, said Wednesday at the CTIA Wireless 2004 conference. "The 'worst' year was 2002, when we added 13 million subscribers."

Verizon Wireless President Dennis F. Strigl said: "Wall Street thought we had a downturn. I don't think it happened. We grew every line of our business."

Rah-rah attitudes are notorious at trade shows like the CTIA Wireless conference where Strigl, Sigman and four other cell phone chief executives shared the stage. But some in the audience felt the claims were too over the top and could damage their credibility.

Brad Smith, who heads a customer service department for a cellular provider in Kansas, pointed out that although cell phone service providers have added new subscribers--sometimes in record numbers--since the start of the decade, 2002 was the second of two straight years of declining handset sales.

Indeed, conditions have been so bad during the last three years that once high-flying AT&T Wireless put itself up for sale, with Cingular Wireless the winner of an eventual bidding war, noted Smith, who declined to reveal the name of his company.

"So aside from that, there was no downturn?" he asked.

Whether or not there was a downturn is now a moot question, said Nextel Chief Executive Tim Donahue, who shared the stage with Strigl and Sigman.

The cell phone industry in 2003 had record handset sales, signaling that explosive growth has returned to the industry, he said, adding that he believes 2004 will be another big year of growth.