How the Recession Will Affect Wireless Data Spending

UPDATED: The recession won’t cut too deeply into wireless data spending in the U.S. for now, according to data sent over last night by Chetan Sharma of Chetan Sharma Consulting. In his third-quarter wireless data report, Sharma concludes that the rise in the number of consumer smartphones over the last few quarters means that data spending by consumers will likely offset cuts in revenue caused by the loss of jobs and employer-subsidized data subscriptions.

Data is continuing to offset the loss in voice ARPU (average revenue per user), and is still rising as a percentage of wireless revenue, to stand at more than 23 percent for U.S. carriers as of the end of the third quarter. A year ago, the percentage contribution stood at 17.7 percent. Sharma estimates that in the U.S., that number is likely to exceed the 25-percent mark in the final quarter of 2008. Verizon Sprint leads the pack, with data ARPU of $13.58 $13.50. T-Mobile, which is only now rolling out its 3G network, has a scant $9 in data ARPU from customers.

However, economic uncertainly and rising data penetration (more than 35 percent of the U.S. now has a data plan), means that there may be some pressure on pricing. Sharma also notes that after the holidays, if times don’t improve, the industry might see declines in data toward the end of the second quarter of 2009.

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