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US Wireless Data
Market Update - Q1 2008
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Download PPT (1.28 MB)
http://www.chetansharma.com/usmarketupdateq108.htm
The US
wireless data market grew 38% in Q108 compared to Q107 to reach $7.5B in data
revenues. iPhone is not only having an impact on data revenues but also
on device design, mobile advertising roadmaps, and applications and
services that are being contemplated for future. US exceeded Japan in
mobile data service revenues for the quarter and the market is expected
to reach $34B in data revenues in 2008.
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The US Wireless data service
revenues grew 7.5% Q/Q to $7.5B in Q108. Compared to Q107, the data
service revenues grew 38%.
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Overall ARPU declined by $1.12
and for the first time since Q405, the average ARPU dropped more
than a dollar Q/Q. Average voice ARPU declined by almost $1.50 while
average data ARPU inched up by $0.49 or 5%.
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Verizon lead in data ARPU with
$11.94 (or 23.37% of the revenues) closely followed by Sprint at
$11.50 (or 20.54%), AT&T at $10.80 (or 21.52%) and T-Mobile at $8.50
(or 17%).
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The strongest growth in Q108 came
from AT&T with 15% and 53% increase in data revenues from Q407 and
Q107 respectively. Both AT&T and Verizon generated $2.3B in data
revenues and are on target to exceed $10B in data revenues for the
year for the first time by any operator worldwide besides NTT DoCoMo.
AT&T and Verizon now account for 61% of the market data services
revenues. Verizon and T-Mobile registered 10% increase in data
revenues from Q407 while Sprint’s declined by 6%.
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The average industry %
contribution of data to service revenues exceeded 20% and now stands
at 20.62%.
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The number of data subscribers
has been on the rise with Verizon leading the way. At the end of
Q108, Verizon had that 48.1M (or 72%) data subscribers. Verizon and
AT&T subscribers joined to send over 100 Billion text messages in
Q108 translating into almost a message every 3 hours. This compared
to users in Philippines where average routinely surpasses a message
every hour.
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In terms of net-adds, T-Mobile
was helped by SunCom acquisition and crossed the 30M subscription mark.
Verizon regained its quarterly net-adds title from AT&T by edging
its rival 1.5M to 1.2M. Sprint lost customers again, this time
exceeding 1M. In March, the US market also slipped behind India to
third position in terms of total number of subscriptions (India is
predominantly a prepaid market while US is a postpaid market).
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The top three US carriers again
maintained their respective rankings amongst the top 10 global
carriers in terms of data revenues. For the quarter, Verizon, AT&T,
and Sprint Nextel stood at #4, 5, and 6 respectively. AT&T and
Verizon are in the select group of five global operators who are now
generating $2B or more in data revenues/quarter (the other three are
NTT DoCoMo, China Mobile, and KDDI).
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Non-messaging data revenues
continue to be in the 50-60% (of the data revenues) range for the US
carriers.
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The eagerly anticipated 700 MHz
played out as we expected with Google doing enough to make Verizon
pay more and kick-in the “open-gardens” provisions. However, the
actual impact on the market dynamics is likely to be negligible. It
did however, help open the “open” debate in the industry.
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There continues to be tremendous
activity in the area of Mobile Advertising. While fending off the
Microsoft acquisition, Yahoo is busy creating some compelling
applications and is stitching together carrier deals around the
world.
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Venture money continued to flow
into the mobile sector with over $1.5B investment in Q108 (Source:
Rutberg). Location Services, Mobile Personalization, Mobile Video,
Mobile Search and Advertising, Semiconductor, Carrier
infrastructure, Device design and development are hot areas.
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Nokia eclipsed 100M unit sale in
Q108 for the fourth straight quarter. It sold over 115M handsets in
Q108, more than the next three handset manufacturers combined.
Nokia’s global market share stood at 39%. For the year, the industry
looks to again eclipse the 1 billion handset mark for 2008
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3G penetration in the US was
approaching 30% in Q108, with Verizon leading the pack with over 56%
3G subscriber penetration. T-Mobile finally did its 3G launch in
limited cities with plans for expansion in 08. 3G subs have over $20
in data ARPU accounting for 30% contribution to the overall ARPU
from such subs. These trends are expected and the diffusion of
mobile broadband will continue to create new opportunities and
revenues for the ecosystem.
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Apple is slated to announce a 3G
iPhone next month, has been aggressively expanding the distribution
partners, and is expected to blow past the 10M unit (it is already
past 5M) sale mark easily
by the year-end especially as operators consider giving rebates to attract potential
users and their mobile data usage.
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As expected, Clearwire and Sprint
banded together to raise $14.5B from friends and family which
included the likes of Google, Comcast, Time Warner and others. IF
the companies can execute on their strategy in 2008/9 and get the
devices out in the market without messing up with pricing, this
venture can be quite disruptive to the market much more than any
other open initiative.
Global update
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China and India added
approximately 55M subscriptions combined in Q108 with India
marginally edging out China with a whopping 10.16M net-adds in March
(probably for the first time history, monthly net-adds for country
have exceeded 10M). By comparison, US added 4.5M in Q1
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NTT DoCoMo continues to dominate
the wireless data revenues rankings with over $3.4B in data services
revenue in Q108. 35.7% of its revenue now comes from data services.
DoCoMo also crossed 80% in 3G penetration in Q108 and is expected to
cross 90% by early 2009.
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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
consistently topping 30%.
More details in our worldwide wireless data market update in
our Global Wireless Data Market Update Mar 2008.
Your
feedback is always welcome.
Chetan
Sharma
Disclaimer: Some of the companies mentioned in
this note are our
clients.
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Upcoming
Events |
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20 May |
Qualcomm, San Diego, Mobile Advertising Book
Event |
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20-23 May |
Future In Review, San Diego, Future of
Wireless: From Mobile Ads to Mobile Payments |
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2 Jun |
Mobile Monday, Amsterdam,
Mobile Advertising |
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26-27 Jun |
Global Wireless Security Conference,
Kuala Lumpur. Chetan will be giving a talk to leading CTOs and
CIOs on Mobile Security trends and opportunities |
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July |
IAB Mobility Forum, NY |
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Oct |
Seattle Mobility Conference |
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Recent
Events |
Chetan moderated two
recent panels on Mobile Advertising - Stanford
University and TiE Seattle. Click on the link to get the
discussion summary. |
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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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Upcoming
Research |
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June |
Enterprise Mobile Product Strategy
Using Scenario Planning (Book) |
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July |
Mobile Industry Half-Year
Recap and Forecasts |
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Aug |
US Wireless Data Market: Q2
2008 Update |
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Sept |
Global Wireless Data Market:
Half-yearly Update 2008 |
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Oct |
Wireless Broadband
Technology: Conflict and Convergence (Book) |
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Nov |
Measuring your IP ROI |
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Dec |
Mobile Industry 2009
Forecasts |
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© Chetan Sharma Consulting 2008. All
Rights Reserved. |
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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, business, and IP strategy. We've
helped companies like NTT DoCoMo, China Mobile, Samsung, KDDI, Alcatel-Lucent, Sony, Virgin
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Cincinnati Bell, Bain, SAP, Vulcan, American Express, and many
others. What can we do for you?
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