Wireless data revenue to increase 16% over the next decade

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Wireless data revenue to increase 16% over the next decade

Joe O'Halloran

The recent launch of Apple’s iPhone 3G along with new smart-phone offerings from other providers will fuel a steady growth in wireless data revenues in the US according to the latest predictions by SNL Kagan.

The analyst predicts mobile data revenue to increase by a compound annual growth rate of 16% from $24 billion in 2007 to over $100 billion in 2017, compared to a 5% CAGR for total wireless service revenue over the same period. Data subscribers should grow at an average CAGR of 5.8% to 249.5 million by 2017, comprising 77% of total wireless subscribers. By comparison, over the same period, SNL Kagan forecasts wireless subscriber growth to increase by only 2.9% per year on average. By 2017, wireless subscribers will likely reach 90% per capita penetration.

As the market nears saturation, sales of new data services in the US will become the primary driver of revenue growth. Messaging and mobile email will comprise the largest source of mobile data usage with 62% of wireless subscribers utilising these services by 2017. Mobile web users, growing from 18% of wireless subscribers in 2007 to 52% in 2017, will comprise the second-largest category.

Within other mobile content categories, SNL Kagan expects mobile video/TV to ramp the fastest, with a 10-year CAGR of 22.5% versus 12.7% for games and 13.1% for music. Between 2010 and 2012, mobile video/TV usage will get an extra boost as phones compatible with the ATSC-MH mobile broadcast TV standard emerge.

"Right now the visible top line growth outlook in wireless is relatively modest, with declining sub gains and so much pressure on voice revenue countering the surge in data,” explained SNL Kagan analysts John Fletcher and Sharon Armbrust. “But we think the open-endedness of wireless data options, especially related to location sensitive and personalised mobile commerce and advertising opportunities, could give wireless a second wind in the not too distant future. The wireless industry’s biggest growth opportunities may well be the services we haven’t even seen yet."


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