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US Wireless Data Market: 3Q 2006
update
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PPT Download (849 KB)
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US
wireless data market continues to grow rapidly.
As expected, for the first time, the top three US
carriers (Verizon, Cingular, and Sprint Nextel) crossed $1B/quarter
in data revenues. US is the only country with 3 carriers in the
“$1B/quarter” data revenues group (7 carriers are in this group,
only NTT DoCoMo is in the exclusive “over $2B/quarter” club). This
takes the overall US wireless data service revenue tally to over
$10.5B for the year (compared to $8.6B for entire 2005) and is
expected to cross $15B in 2006.
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Verizon
continues to dominate and has shown better performance than its
rivals. It became the number one carrier in terms of service
revenues and data revenues, and is heading steadfastly to claim the
coveted “carrier with most subs” title by second half of 2007. Its
data revenues for the year were approx. $3.1B followed by Cingular
at $2.9B, Sprint Nextel at $2.8B, and T-Mobile US at $1.2B.
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Sprint
retains its leadership position of highest wireless data ARPU in
terms of absolute dollar amount at $7.75 but Verizon continues to
lead in terms of % data ARPU at over 14%. Average data ARPU for the
industry is now $6.8 or 13%.
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Overall
ARPU (voice + data) increased slightly for the second straight
quarter to $53.09 bucking the general trend of slow ARPU decline.
Both Verizon and Cingular reported slight increase in voice ARPU.
Average Overall ARPU was $53.09. Sprint led with $61 followed by
T-Mobile at $51, Verizon at $50, and Cingular with $49.8.
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US 3G
subscriber base continues to grow - primarily due to Verizon and
Sprint Nextel’s aggressive push. With Cingular and T-Mobile joining
the fray, the 3G growth is expected to accelerate with 2007 being
the inflection year.
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In terms of EV-DO vs. WCDMA, EV-DO is quite ahead in both coverage
and handset diversity.
As of Sept 2006, there were 15 3G handsets available in the market
(representing approximately 20% of the available handsets from big
four), 14 EV-DO (10 from Verizon, 4 from Sprint Nextel) vs. 1 UMTS/HSDPA
handset from Cingular.
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US added
over 16M net subscribers from Jan-Sept 2006.
This
translates into 1.7M subs/month which is slightly lower than the
2005 average of over 2M/month. Given the fact that we have crossed
75% penetration, the declining rate is indicative of approaching
saturation in the market.
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The top 4
US carrier account for 81% of the subscribers, 86% of the service
revenues, and approximately 95% of the wireless data revenues.
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US
Off-net revenues for the year are likely to exceed $750M.
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Data ARPU
of CDMA/EV-DO carriers was 20% higher than GSM/WCDMA carriers.
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Several
high-profile MVNOs were launched over the course last year and the
overall results have been disappointing primarily due to poor
execution, instant crowding effect, and competition from big 4.
Mobile
ESPN was first to bow out last quarter.
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US
wireless carriers are steadily climbing in their wireless data
performance as compared to their peers worldwide. Verizon, Cingular,
and Sprint maintained their ranking # 4, 5, and 7 respectively,
amongst the top 10 operators worldwide in terms of total wireless
data revenue generated for the first nine months of 2006.
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T-Mobile
US outperformed its parent TMO Germany for the first time by
generating $434M in data revenues (compared to $425M by TMO
Germany).
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In terms
of total wireless data revenue for the first nine months of 2006,
the #1 carrier worldwide is NTT DoCoMo which has maintained its
position for a number of years. It has generated over $7.8B in
wireless data revenues during the first nine months and will eclipse
$10B mark for 2006.
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In terms
of wireless investments, over $5.1B was invested in wireless related
companies/startups from Jan-Sept 2006. Source: Rutberg. Mobile
TV/Video, Mobile Personalization, Mobile Search and Advertising,
Semiconductor, Carrier infrastructure, Device design and development
are hot areas. M&A activity also picked up quite significantly.
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Worldwide Handset market share Q306: Nokia and Motorola dominated
with 35.4% and 21.5% market share respectively. Samsung with 12.3%
stands third. Source: Credit Suisse. With the advent of $100
Smartphones (e.g. Motorola "Q"), there will be several impacts on
the overall market esp. around software for mobile devices,
services, business models, and walled gardens. Next year, the
smartphone penetration will get into double digits and with lower
price points, one will see wider adoption than today.
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Sprint's
cozing up with the cable guys has started the realignment for
"quad-play" and "quintuple play" positioning in the market. Clearly,
bundling enhances life value of the customer and lowers churn
but do you do it through partnership or investment is the question
on the table.
T
Your comments and
suggestions are always welcome
Chetan
Sharma
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October 2006 |
October 2006 |
September 2006 |
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Chetan's Blog
"Always On Real Time Access" (AORTA) was voted
"top wireless industry blog" |
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Upcoming
Events |
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March 26th - MEF, Orlando |
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March 27-29th
- CTIA 2007, Orlando |
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In addition, Chetan will be doing some
private briefings to carriers, content providers and enterprise
solution providers |
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© Chetan Sharma
Consulting 2006. All Rights Reserved. |
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Chetan Sharma Consulting is a
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