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Summary:

Despite the mobile industry’s focus on mobile data, voice has long been the primary revenue driver for carriers. That’s set to change this quarter.

On the webpages of Gigaom we’re constantly talking about mobile data, the mobile internet and mobile broadband, but the mobile carriers have always lived in a voice-centric world. The importance of smartphones and LTE can’t be ignored, but the fact remains voice always has been the principal source of the mobile carriers’ paychecks.

We’re approaching a crossover point in the U.S., however, at which data becomes a bigger revenue driver than voice. According to a new report from Chetan Sharma Consulting, that crossover point will likely be the current quarter. For the third quarter, data accounted for 48 percent of all U.S. mobile industry service revenues, and that percentage is growing quickly. Carriers took in $22.8 billion from data in Q3, up 5 percent from the previous quarter and 15 percent year over year.

Voice data converging Sharma

Verizon, AT&T and Sprint have all crossed over the 50 percent mark already, while T-Mobile and regional carriers are catching up, Sharma said. Because the holiday quarter is always a big one not only for smartphone sales but data plan activations, U.S. carriers are easily on pace to haul in $90 billion in mobile data revenues. If that happens, Sharma said, voice revenue will officially begin receding in the rearview mirror, and 2014 will the be the first full year that mobile data took in more money than voice.

It’s easy to see this trend playing out in the carriers’ pricing plans and network operations. AT&T and Verizon are no longer segmenting voice and SMS in their plans any more – if you buy a smartphone the only thing you really get to pick is how big a bucket of megabytes you’ll need. T-Mobile and AT&T are shutting down large portions of their 2G GSM capacity to make way for more LTE bandwidth, while Sprint shut down its voice-centric Nextel network completely. Though voice may have been carriers’ bread and butter until now, data long ago overtook voice as the primary source of traffic.

  1. In the mobile industry business model will have to change, with data becoming predominant..

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  2. Data is here to stay for good 5-6 years and will open many more streams in the near future for the telecom companies. Its an exciting time for all of us in the Mobile industry.

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  3. What Voice? Let me know if you find a Telecom that sees Voice as a primary (or even distant supplementary) revenue stream today. Perhaps this will be a different discussion in 5 years when all voice is delivered digitally over VoLTE, and has a sound monetization model. Even then, my guess is that we will be burned out on FB/Twitter as we know them, and speaking via snapchat pictures and FaceTime. 2G will be repurposed for these channels/packets.

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  4. Voice is data. I think this is an evolution from carrier provided voice, to carrier provided voice and a few select pre-determined embedded functions/apps (pre smartphone), to unlimited online capability accessed “wirelessly” including more and more online-to-offline oriented capabilities. Five years ago even VCs had a hard time imagining online-to-offline commerce and it now accounts for nearly 50% of all commerce in the US.

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