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US Wireless Data Market
Update - 4Q07 and 2007
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Download PPT (1.3 MB)
http://www.chetansharma.com/usmarketupdateq407.htm
The US wireless
data market grew 55% in 2007 ending the year with $24.5 billion in data
services revenues with 4Q yielding $6.9B. 2007 also saw significant
industry milestones like: iPhone launch, US crossing 250 million
subscriptions, 3G penetration in the US touching 25% subscriber base,
consternation around 700 MHz spectrum auction, MediaFLO launch, Android
launch, Nokia crossing 40% market share, WiMAX and Femto Cell trials,
and much more. US almost equaled Japan in mobile data service revenues
for the year (rounding error and currency fluctuation difference). With
several significant launches coming up in 2008, US remains one of the
most attractive wireless data markets.
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The US Wireless data service revenues grew 7.8%
Q/Q to $6.9B in Q407. For the year 2007, the US wireless data
service revenues grew to $24.5B, up 55% from 2006.
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Overall ARPU declined by $0.81 and reversed the trend of overall ARPU uptick of the
last two quarters. Average voice ARPU declined by almost $1.50 while
average data ARPU inched up by $0.68 or 7%.
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Sprint lead in data ARPU with $11.50 (or
19.83% of the revenues) closely followed by Verizon at $11.06.
Verizon was ahead in terms of data as % ARPU with 21.3% of its
ARPU coming from data services. AT&T with $10 (or 19.89%) and
T-Mobile with $8.20 (or 15.77%) rounded up the top 4.
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The strongest growth in 2007 came from Verizon
and AT&T, with both of them tied at 64% YOY jump in data revenues.
However, Verizon was ahead in dollar terms at $7.4B, accounting for
almost 31% of the US industry data services revenue for the year.
The top two were followed by T-Mobile at 56% and Sprint with 31%
increase YOY.
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The average industry % contribution of data to
service revenues jumped to 19.34%.
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In terms of net-adds, thanks to the Dobson
acquisition and the iPhone sales, AT&T added 2.7M new subscribers
followed by Verizon at 2M. The overall net-adds improved by 6.2M
subs taking the total for the year to 20.8M, down slightly from
2006. Despite the 7% slowdown, there is plenty of growth left in the
US wireless market.
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In spite of AT&T’s prolific quarter, Verizon
ended up with the highest net-adds for the year at 7.7M subs vs.
AT&T’s 6.9M.
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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 year, Verizon with $7.4B, AT&T with
$6.9B, and Sprint with $5.2B in data services revenues stood at #4,
5, and 6 respectively with Verizon closing in on KDDI for the number
3 spot. AT&T became the second US operator after Verizon to be 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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There was tremendous activity in the area of
Mobile Advertising. Google is also laying out its tactical and
strategic roadmap in hopes to dominate the space and while it
succeeded in pushing FCC to change the 700 MHz auction rules, the
future of Android alliance remains uncertain. It did however; help
open the “open” debate in the industry. Meanwhile, 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 $4.9B investment in 2007 (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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iPhone helped AT&T find its voice. Since the
introduction of iPhone in June 07, AT&T has reversed the
multi-quarter trend of narrowing total subscriber difference with
Verizon. Aided by the Dobson acquisition, the difference between the
two companies stood at 4.4M subscribers in favor of AT&T (vs. 1.5M
in Q107). iPhone also accounted for (higher) disproportionate mobile
web usage exciting the ecosystem and media alike.
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Nokia eclipsed 100M unit sale in Q407 for the
third straight quarter. It sold over 437M handsets in 2007, more
than the next three handset manufacturers combined. Nokia’s global
market share stood at 40.2%. Quite impressive.
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3G penetration in the US touched 25% in 2007,
with Verizon leading the pack with over 53% 3G subscriber
penetration. AT&T reported that 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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There was tremendous discussion around
“openness.” Bowing to the industry pressure, FCC’s 700 MHz spectrum
auction included clauses for opening up the network by the winner.
Sprint made progress with its upcoming launch of XOHM. Verizon
launched its Open initiative. Google’s Android was announced in
Q407. Though devices are slated to hit the market in 08, its overall
impact remains uncertain.
Global
update
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China and India added approximately 86M
subscribers in 2007 dwarfing growth in other regions by a distance
(China marginally edged out India to retain the top honors). Similar
growth trends will continue into 2008. In fact, India will overtake
US as the number two wireless market in the world (by total
subscriptions) during the week of March 24th 2008.
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NTT DoCoMo continues to dominate the wireless
data revenues rankings with over $12B in data services revenue in
2007. 35% of its revenue now comes from data services. DoCoMo will
also cross 80% in 3G penetration this month. China Unicom edged past
SK Telecom to occupy the number 9 spot.
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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
coming out later this month.
Your feedback
is always welcome.
Chetan Sharma
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Our Seattle event was a great success.
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Sept |
Seattle Mobility Conference |
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In addition, Chetan will be doing some
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© Chetan Sharma Consulting 2008. All
Rights Reserved. |
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