The U.S. mobile data market continued its steep growth curve in the second quarter, increasing 22% from the year-earlier period to $13.2 billion, according to new research from Chetan Sharma. That puts mobile data revenue on track to reach the $54 billion the wireless consulting firm projected earlier this year.
With the number of mobile phone subscribers reaching saturation level in the U.S., the major carriers are increasingly relying on connected devices, including e-readers and tablet devices, to drive data growth. Both Verizon Wireless and AT&T added more connected device users than postpaid subscribers in the second quarter.
AT&T alone added more than 900,000 such devices in the second quarter for a total of 6.7 million. Given the slow postpaid growth, operators are fiercely competing in prepaid, enterprise, connected devices, and M2M (machine-to-machine) segments," noted the Chetan Sharma report.
Verizon and AT&T together accounted for 75% of the increase in data revenues in the quarter, and generate 70% of data service revenue and 62% of the subscription base. In terms of market share, Verizon edged out AT&T 32% to 31% -- with Sprint a distant third at 16%, followed by T-Mobile, 11%, and all others, 10%.
Sprint, however, added net subscribers in the quarter for the first time in three years and launched the country's first 4G phone, the Evo 4G made by HTC. Sharma also pointed out that T-Mobile's 3G push is starting to pay off. "While the net-adds were still in the red, its data growth is starting to match with its peers. The 20% 3G smartphone base definitely helps," the report stated.
All carriers benefited from an increase in U.S. smartphone penetration to 31%. Sharma's estimate of smartphone subscribers tends to be at the high end of analyst assessments. Forrester, for instance, earlier this year estimated U.S. penetration at only 17%. IDC pegs the total at about 55 million people, or 19% of all U.S. mobile subscribers.
Whether using feature phones or smartphones, mobile data usage by Americans continues to soar. The average subscriber is consuming approximately 230 megabytes of data a month, up 50% in the last six months. "The U.S. has become ground zero for mobile broadband consumption and data traffic management evolution," according to Sharma. "While it lags Japan and Korea in 3G penetration by a distance, due to higher penetration of smartphones and data cards, the consumption is much higher than its Asian counterparts."