|
|
|
US Wireless Data Market Update -
2006 |
PPT Download (1MB)
PDF Download (2.7MB)
US Wireless Data Market update – 4Q06
and 2006
-
US wireless data market continued
its rapid growth in 2006. Wireless data service revenues jumped
almost 84% to approximately $15.8B (from $8.6B in 2005). The
service data revenues are likely to top $27B in 2007.
-
The average data ARPU climbed 50%
while the average voice ARPU declined 7% since EOY 2005. Overall
ARPU declined 1% from 2005 levels.
-
The strongest growth was
experienced by Verizon which more than doubled its data revenues, up
101%, followed by Sprint up 69%, T-Mobile up 66% and AT&T (old
Cingular) was up 62%. Except for Sprint, rest of the top 4
maintained a double digit growth rate Q-over-Q for the entire year
(Sprint’s growth rate was marginally down to single digits in Q2 and
Q3 but made up for the loss with a 19% increase in Q4).
-
The top three carriers again
garnered over $1B/quarter in data revenues for the second straight
quarter, with Verizon coming out on top with $1.4B followed by AT&T
at $1.3B.
-
The US market added approximately
23M new subscribers or 1.92M subs/month. This puts the market at
approx. 78% penetration. We will start to see the decline in market
growth from here on.
-
For the FY2006, Verizon’s data
revenues were at $4.4B, AT&T at $4.25B, Sprint Nextel at $4B and TMO
US finished the year at $1.6B.
-
Verizon continued to dominate the
2006 ARPU sweepstakes with approximately 16% of its revenue coming
from data services followed by Sprint and AT&T at 14.6%, and TMO US
close behind at 13%. The average data ARPU is no at 14.5%. Sprint
maintained its leadership in terms of raw data ARPU at $8.75. In
fact, its CDMA data ARPU topped $12.
-
Verizon gained the most number of
customers in 2006 with 7.7M net adds followed by AT&T at 6.9M and
TMO at 3.3M. Sprint at 1.6M, and Alltel with 1.56M rounded up the
top 5.
-
US 3G subscriber base continues
to grow – primarily due to strong showing by Verizon and Sprint
Nextel’s aggressive push. AT&T also covered significant ground while
TMO is expected to join the fray by EOY 2007.
As discussed in our
2005 paper, 2007 is priming to be the inflection year for 3G in US
(and Europe). At the end of 2006, 3G penetration stood at
approximately 10%.
-
US Off-net revenues for the year
exceeded $750M.
-
In 2006, Data ARPU of CDMA/EV-DO
carriers was 21% higher than GSM/WCDMA carriers.
-
Several high-profile MVNOs were
launched over the course of last year and the overall results
haven’t been favorable primarily due to poor execution, instant
crowding effect, and competition from big 4. Mobile ESPN was first
to bow out. Helio and Amp’D have boasted $100 ARPU and 100K
subscriber base but the burn rate and Cost of Customer Acquisition
remains quite high.
-
US wireless carriers maintained
their strong showing vis-à-vis their peers worldwide. Verizon,
Cingular, and Sprint maintained their ranking # 4, 5, and 6
respectively, amongst the top 10 operators worldwide in terms of
total wireless data revenue generated for 2006. US is the only
country with 3 operators who generated $4B or more in data revenues
in 2006 and are going over $1B/quarter now.
-
For the second straight quarter-
TMO US outperformed its parent TMO Germany
-
Though mobile enterprise data
growth doesn’t make headlines, there has been steady growth in
deployments and revenues generated for carriers and product vendors.
Verizon alone reported over 33% of its data revenues or $462M from
the enterprise users in 4Q06.
-
In terms of wireless investments,
over $6.4B was invested in wireless related companies/startups in
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.
-
For the year 2006, mobile
shipments eclipsed 1B mark for the first time with Nokia leading the
way at over 347M in phone sales.
-
Smartphone penetration increased
into double digits and is slowly approaching the inflection point.
-
2006 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.
Global
update
(more details in our worldwide data market update coming out soon)
- The worldwide
markets ended with approximately 2.6B connections and are going to top 3B by end
of 2007. Significant growth is coming from India and China with India
registering an astounding 7M net adds every month now. China is close behind at
6M/month. Overall, the world market is slowly approaching 50% penetration
(should reach the target in first half of 2008) with approx. 41% penetration at
the end of 2006.
-
NTT DoCoMo became the first carrier to cross
$10B/yr in data revenues in a given calendar year. It was followed by China Mobile at $8.6B.
-
Worldwide Handset market share 2006: Nokia
maintained its number one position with 36% market share. Motorola increased its
market share by 4 percentage points to 23%, Samsung dropped a point to 11%.
Sony Ericsson edged past LG with 9% while LG dropped to 6%. Nokia shipped over
100M handsets in 4Q06 (a first by any OEM). Nokia’s ASP dropped by $2 from EOY
2005 while Motorola’s dropped by a whopping $27 putting the company in struggle
mode. Sony Ericsson bucked the trend and increased its ASP by $17 showing a
strong comeback.
- Most of the major carriers around the world
have double digit percentage contribution to their overall ARPU from data
services. Operators like KDDI, DoCoMo, and O2 UK are topping 30%.
- China Mobile became the world’s most valued
operator surpassing Vodafone.
2007 – Early signs
- iPhone: What’s in your pocket? – The launch of iPhone after years of rumors captured the imagination and
headlines of the industry. The bar has been raised.
- Mobile Advertising –
Tremendous activity (trials and press releases) in this area though there is
confusion in the industry w.r.t the definition and the standardization process.
- LBS, GPS, and Navigation –
It is becoming mainstream. What! We will have to pay for it?
- Enterprise Applications –
Mobile Enterprise sector is quietly making strides with mobile becoming an
integral part of corporate IT strategy though several challenges remain.
- Emerging Markets –
Growth is in emerging markets but who gets to make money?
- Content Interoperability –
Access to content across devices and networks is a challenge.
- Convergence –
Mobile is converging with Net, Net is converging with cable, wireless phone is
converging with desktop phone, voice is converging with data, CBS is converging
with YouTube, Skype is converging with Qwest, … you get the picture.
- Others to watch –
NFC, WiMAX, FemtoCells, Mobile IM, 4G, Mediaflo.
Your comments are always welcome.
Chetan Sharma
|
Recent
Publications/Media mentions |
|
© Chetan Sharma Consulting 2007. All
Rights Reserved. |
|
Chetan Sharma Consulting is a
consulting and advisory firm helping companies in the mobile and
voice communications sector. Our expertise is in developing
innovation-driven product, marketing, and IP strategy. We've
helped companies like NTT DoCoMo, Samsung, Virgin, KTF, Sprint Nextel, Reuters,
Disney, Qualcomm, Infospace, Reliance, BEA, HP, Merrill Lynch,
Cincinnati Bell, Bain, SAP, Vulcan, American Express, and many
others. What can we do for you?
www.chetansharma.com |
If you have questions or
suggestions or feedback on this subject or on the wireless & mobile industry at large,
please contact us at
feedback@chetansharma.com - we look forward to hearing from
you.
Subscription
Information
We provide news and analysis on a regular basis to anyone interested in the
mobile communications industry. Please feel free to pass along this email
message in its entirety to friends and colleagues who you think might find it
useful. Anyone wishing to be added to the email list can subscribe by writing to
subscribe@chetansharma.com. To unsubscribe, please send an email to
unsubscribe@chetansharma.com.
|
|
