17 Comments

Summary:

A report out from Chetan Sharma Consulting proves that data is the big story when it comes to wireless operators in the United States. Driven by flat-rate plans, increasing 3G coverage and the iPhone, data spending reached $8.2 billion for the second quarter of 2008, or […]

A report out from Chetan Sharma Consulting proves that data is the big story when it comes to wireless operators in the United States. Driven by flat-rate plans, increasing 3G coverage and the iPhone, data spending reached $8.2 billion for the second quarter of 2008, or about 21 percent of the total wireless services revenue. The boost in wireless services increased average revenue per user by 5 percent to 50 cents, offsetting a 5-cent decline in voice ARPU.

Verizon, which leads U.S. wireless operators with its 60 percent 3G subscriber penetration, saw the most growth in 3G usage and the most data revenue — $2.6 billion for the quarter. However, AT&T, the exclusive provider to the Internet-friendly iPhone, had only 25 percent 3G subscriber penetration but also saw its data sales come close to Verizon’s at $2.5 billion, proving that the Internet on the phone is a powerful driver of data revenue.

In the big picture of wireless revenue, carriers grew sales by 8.6 percent for the second quarter compared to the same period in 2007. In the second quarter of 2008 data revenue saw 40 percent growth. The numbers show we’re moving toward ubiquitous broadband in the United States but that we still have a ways to go. The average 30 percent 3G subscriber penetration rate could be improved, but perhaps cheaper 3G plans and Internet-friendly phones will pump up both subscribers and data revenue.

image from Chetan Sharma Consulting

  1. The growth for mobile broadband has been explosive in Sweden. At the end of this year there will be 1 million mobile broadband subscriptions (ITresearch). And there are only 9 million of us in total.

    Sure, some people use the mobile broadband instead of ADSL. But most people just add it for mobile use or for the country house or boat.

    And of top of that people are surfing on their phones.

    Share
  2. How does the cost of delivering mobile data compare to that of delivering broadband data over DSL or cable? Unless it is much higher, expect a collapse of mobile data revenues, or some attention from the FTC, since I pay for mobile data about what I pay for DSL, and for a fraction of the DSL traffic.

    Share
  3. The cost of delivering mobile data is much higher. But the price of mobile data is seldom based on cost. Five years ago the standard price for mobile data was 20 USD per megabyte in Sweden. Now the price is 20 USD per month. Thats a price drop of about 99.999%.

    Share
  4. Going to forward this to the CEOs of all Canadian Wireless Carriers right now… Thanks!

    Share
  5. [...] for a relatively small country that’s packed with mobile phones. Sure, you’ll focus on increasing data revenue, but if you’re smart, you’ll buy into growing operators in other countries, too. [...]

    Share
  6. [...] GigaOM has a piece up today on data revenues for US wireless carriers. With a saturated voice market, data is where the money is, and new numbers out from Chetan Sharma Consulting prove just how much 3G data use is contributing to the wireless bottom line. According Chetan Sharma, data spending was up to $8.2 billion in Q2 2008, accounting for 21% of total wireless carrier revenue. The average revenue per user (ARPU) jumped by 5%, even with a 5-cent decline in voice ARPU. [...]

    Share
  7. Moble broadband is on a tear, but most carriers still include their text messaging (SMS) in their data revenue, skewing the results and growth rates dramatically. Text messaging is far more profitable and less susceptible to competitive market pressures than either voice or data plans.

    It would be helpful to see a more complete analysis of data revenue by type of traffic and handset.

    Share
  8. Thanks, Andreas. I’d still like to see another 80% drop…

    Share
  9. Stacey Higginbotham Monday, August 11, 2008

    @John Z, the report says, “Non-messaging continues to grab 50-60% of the data revenues for the US carriers,” but messaging may be more than just SMS texts. That should help somewhat though.

    Share
  10. [...] Following the first external link leads to a story about KDDI losing subscribers to rival carrier SoftBank because of the iPhone. The page also states that SoftBank currently boasts more than double the subscribers of the mighty DoCoMo — a bit hard to believe, given that DoCoMo reached the impressive milestone of 50 million subscribers back in 2005. In fact, the company experienced a 41% growth in profits for Q1 2008, and continues to lead the world in revenue from mobile data. [...]

    Share

Comments have been disabled for this post