Industry enthusiasts are in party spirits amid reports that mobile-phone shipments in the US have risen 5% since this time last year. With the economy in the doldrums, many had expected a decline.

That’s magic for the likes of Motorola, but it smacks of missing the bigger picture. Phone shipments are rising because US operators are giving handsets away as competition gets fiercer. Take a look at the home page of AT&T and the words ‘free camera phones’, emblazoned on a bright orange banner, dwarf the surrounding text. Verizon Wireless appears to be similarly desperate.

Fact is, the mobile-phone market is slowing. Last quarter, AT&T and Verizon, the country’s two dominant mobile operators, signed up 300,000 fewer customers than during the same three-month period a year earlier. While spending by customers might not have slumped, it remains stubbornly flat – despite operators’ best efforts to raise average per-user spending on data services.

Things could get worse before they get better. AT&T’s deep discounting of the iPhone 3G will, no doubt, excite those for whom handset shipments are proof the telecoms sector is coping with the credit crunch. Apple, for one, will be chuffed. But expect AT&T’s margins to head south.

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