• by Mark Walsh  @markfwal, March 22, 2011

In its annual wireless report released today, consulting giant PwC noted that the number of North American carriers participating in the survey had shrunk from 18 in the early 2000s to 11 in 2010, due to consolidation. Following AT&T's announcement of a $39 billion agreement to acquire T-Mobile USA, of course, that figure could further contract to 10 wireless operators.

The growing consumer demand for mobile data that partly drove AT&T's audacious bid is highlighted in the PwC report. It found that factors such as wider use of streaming video, the importance of service quality, and migration toward 4G network technologies have pushed carriers to invest more in infrastructure despite the still-sluggish economy.

Declaring 2010 "the year of data," the report nevertheless warned that rising mobile content and messaging brings new challenges for carriers, as well as new revenue opportunities. "They will need to determine how best to monetize the additional data usage among price-sensitive customers and how to finance the network improvements necessary to keep pace with demand," stated Pierre-Alain Sur, U.S. wireless industry leader, at PwC.

It's no surprise that smartphones played a major part in driving mobile data growth. As a percentage of revenue, smartphone sales increased to 38% for carriers with revenue over $5 billion last year, up from 19% in 2009. At the other end of the spectrum, prepaid plans geared toward feature phone users continued to make up a significant and growing proportion of revenue, averaging 22.5% of total service revenue among carriers.

Internet and email access from mobile devices accounted for one-quarter of prepaid data revenue in the 2010, a dramatic spike from just 1% a year ago. To tap into the growing market for mobile apps, 91% of companies surveyed have launched their own mobile app stores. Seven in 10 said they recorded revenue from mobile advertising.

Separate data released Tuesday by wireless trade group CTIA from its biannual survey showed that total capital investment in the industry rose 22% to $24.9 billion. Wireless annual service revenue increased 4.8% to nearly $160 million, while mobile data sales reached $50.1 billion, or nearly one-third (31.4%) of overall service revenue.

When it comes to upgrading networks, the PwC study found three wireless operators had already begun shifting to 4G in 2010, up from one the prior year. Two others said they expect to begin rolling out next-generation service by 2011. Two more plan to do so by 2012. AT&T said Monday that its planned acquisition of T-Mobile would not delay its goal of completing the rollout of 4G coverage by 2013.

Companies included in the PwC survey: AT&T Mobility, Clearwire, Leap Wireless, Verizon Wireless, Sprint Nextel and T-Mobile USA.