While 2.4 million new customers does constitute growth, Sharma pointed out that 2 million of those new accounts were prepaid, which typically bring in a third to half the revenues of a contract customer. What’s more, most of the growth in contract customers came from a single provider, Verizon Wireless, which accounted for 2.4 million new postpaid customers. AT&T added only 400,000 while Sprint and T-Mobile lost a 1 million each. So while carriers are still slowly growing, with the exception of Verizon they’re making a lot less money on each new customer.

Another side effect making its way from Europe and Asia to the U.S. is the slow down in messaging traffic and growth. According to Sharma, the third quarter was the first in which SMS volumes began to shrink, both in terms of overall messages sent and average number of messages per subscriber. Over-the-top IP communications services have been eating into SMS’s growth for years now, but it looks like 2012 could be the first year where both messaging volumes and revenues will shrink in the US.

Here are some of the other gems from Sharma’s quarterly market report:

• Smartphones accounted for over 75 percent of new mobile phones sold in Q3, but Sharma points that while half of U.S. subscribers own a smartphone, they’re concentrated in just 30 percent of U.S. households. That means smartphones aren’t trickling evenly over the U.S. population, but rather flowing primarily into certain segments. Sharma notes that this means there is still huge potential for smartphone growth.
• Carrier mobile data revenues grew 3 percent quarter over quarter and 17 percent year-over-year, reaching $19.9 billion in Q3. Mobile data now accounts for 43 percent of all revenues. It won’t be long before data becomes mobile operators’ primary revenue stream. It already accounts for the vast majority of their network traffic.
• Verizon and AT&T have definitely figured out how to make how to cash in on that mobile data growth. They occupy two of the top 5 slots in mobile data profitability across the worldwide mobile ecosystem. The other three are mobile Internet pioneer NTT DoCoMo, the world’s largest carrier, China Mobile, and Apple.
• The average number of connected devices per U.S. household was five. Not every one of them was a cellular device, but according to Sharma, 80 percent of all connected devices sport some kind of wireless radio, whether 3G/4G, Wi-Fi or Bluetooth. We’re becoming a society increasingly relying on spectrum airwaves for all of our communication and entertainment needs.

Photo courtesy of Shutterstock user Swetlana Wall

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Big LTE wins in Japan and Korea have turned Asia into NSN’s biggest market region, surpassing Europe and accounting for €1.27 billion of its €3.5 billion in sales last quarter. What’s more, some of these Asian deals make use of some of LTE’s most sophisticated capabilities. SK Telecom is building an LTE-Advanced network that incorporates new small cell and self-optimizing network (SON) technologies unseen on any other 4G network globally.

NSN has tried to cultivate that burgeoning reputation of being on the cutting edge of 4G. In recent weeks it’s launched a slew of new services and products, all designed to transform the network from today’s grids of spaced-out towers into future heterogeneous networks. These HetNets will combine big and small cells, mix and match different radio technologies ranging from cellular to Wi-Fi and provide a dense layer of capacity under the macro network’s coverage umbrella.

Small networks mean big capacity gains

Nokia Siemens Networks’ conception of a heterogeneous network

These technologies, which NSN calls Flexi Zone and Liquid Net, may sound like strange engineering concepts, but Nokia Siemens is trying to define them in ways that has meaning to the average consumer. It’s set a goal of creating a network architecture that will increase the overall capacity of our mobile networks by 1,000 times. Simultaneously, the cost of delivering that capacity will drop to the point that they typical consumer can increase their data usage by a factor of 10 for the same costs they pay today, said Bill Payne, NSN CTO for North America.

“We’re saying by 2020, we’ll have 1 GB per day per user for under $1 in cost,” Payne said. That amounts to 30 GB a month for $30, which is the price a typical U.S. consumer pays for a 2 to 3 GB data plan (though they actually consumer less than 1 GB each month).

Talking about 1,000x increase in network capacity is nothing new. NSN’s archrival Ericsson has been talking up the concept for years and Qualcomm recently detailed the chip vendor’s own “1000x challenge” in a GigaOM post. But NSN is laying out a detailed path on just how the industry gets there. According to Payne, the industry will achieve that kind of capacity in three stages:

• A 10x increase from better cellular technologies. “The first order will be spectral efficiency,” Payne said. “It’s the logical starting point because that’s the work people in this industry has[HAVE?] been doing most of their professional lives.” CDMA and HSPA networks are giving way to LTE networks, which will themselves give way to LTE-Advanced networks. There are limits to how the industry can innovate in this direction though – only so much data that can be shoved into a hertz of spectrum, Payne said.
• A 10x increase from new spectrum. While this aspect is out of NSN’s control, carriers worldwide are working with regulators to devote new airwaves for mobile broadband. AT&T just cleared its 2.3 GHz licenses for LTE use, and the FCC is working to clear more broadcast spectrum for cellular use. Dumping more frequencies into our networks may not be the most elegant solution, but it’s definitely the direction most carriers would rather grow in.
• A 10x increase from small cells. Changing the fundamental topologies of our networks will allow carriers to make that final critical leap to 1,000x, Payne said. The principle is a simple one. By putting 10 cells in the space occupied by a single big one you get close to a 10x increase in capacity. By layering in Wi-Fi and other radio technologies you get even bigger gains. And by creating a network in which a single device can link to multiple radio nodes, the capacity consistently available to individual users increases dramatically.

Building on NSN’s LTE gains

NSN is pushing its LTE-Advanced and HetNet concepts hard, promising its customers that it can not only build their 4G networks today but turn them into the 4G networks of tomorrow. In Arlington Heights, Ill., it’s built a live small cell test network using public safety spectrum to test out the HetNet’s performance in real-world environments.

Its efforts seem to be paying off. Though Ericsson and Huawei still dominate the global telecom infrastructure market, ABI Research recently ranked NSN the world’s leading vendor in LTE contracts, intellectual property and, most notably, its progress in small cells.

LTE image courtesy of Shutterstock user Inq

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Update: Hold on. Verizon at its earning call just revealed it it sold 316,000 651,000 iPhone 5 units in the final weeks of the third quarter. So while the iPhone 5 did have an impact on quarterly LTE activations, it’s not responsible for a 1 million-plus boost in sales. Verizon sold 3.1 million iPhones in total in the quarter, most of which were previous generation 3G devices.

While Verizon didn’t report specific iPhone 5 sales numbers, Typically its quarterly iPhone activations match or exceed its total LTE activations. Last quarter Verizon sold 3.2 million LTE devices, and in the quarter before it sold 2.9 million. In those same periods, Verizon sold 3.2 million and 2.7 million iPhones respectively – all counted as 3G devices.

With the marriage of LTE and the iPhone, Verizon is expecting its 4G network to take over the bulk of its data traffic. Verizon now has 14.9 million LTE devices on its network, which is still relatively small compared to its total retail subscriber base of 96 million, but those 14.9 million consume 35 percent of Verizon’s mobile data traffic. With the iPhone 5’s introduction, Verizon expects LTE will soon start hosting a majority of its data traffic.

Correction: A previous version of this post stated Verizon has had sold 316,000 iPhone 5s in the third quarter. The correct number is 651,000.

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In comparison, second quarter net postpaid adds increased 9.2 precent year over year – a quarter where there is traditionally no new iPhone to offer operators a bump, but this year was aided by Verizon’s snagging a CDMA version of the iconic device. The two major iPhone slingers didn’t do badly in the third quarter, but in UBS’ view their net adds were nowhere near the numbers either operator would have achieved if they had new iPhones to offer subscribers.

Verizon Wireless reported 882,000 net postpaid adds, while AT&T recorded 319,000, with a combined 4.7 million new iPhone activations between them.

That means the fourth quarter could be a bonanza for the wireless industry, combining the usual holiday craziness with the traditional third-quarter new-iPhone bump. UBS predicts a whopping 11.7 million iPhone activations between Verizon, AT&T and Sprint in the final three months of the year. That will result in 1.3 million total postpaid adds for national operators, up from 1 million in last year’s fourth quarter, UBS projects.

A lot of those customers will go to Verizon and Sprint – as the iPhone newbies – but UBS thinks the big winner will be AT&T. It will have the only “free” iPhone as the 3GS will be entirely subsidized with a two-year contract. UBS also believes that AT&T’s network will actually work for it rather than against it. The iPhone 4S has a 14.4 Mbps high-speed packet access (HSPA) chip tailor-made for AT&T’s network, compared to the slower CDMA EV-DO chips used to access Sprint’s and Verizon’s 3G networks. That may sound a lot of gibberish to the typical consumer, but AT&T merely has to say that its iPhone is faster than the others.

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Car sharing, on the other hand, continues to roar on as one of the most tangible ways in which we’re seeing a reduce in resource consumption. Capital flowed to companies like RelayRides and Getaround this quarter.

On the data center side, industry leader Google provided insight into exactly how much energy the tech giant uses, as well as the carbon footprint of its data centers. Transparency in energy consumption reporting is here, and given that energy use is a large part of Google’s operating costs, it’s information that investors, not just environmentalists, will want access to.

To read the rest of my report, head over to GigaOM Pro’s Green IT section, (subscription required) to read the Green IT Third Quarter Report.

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