For the first time, U.S.
wireless operators during the first quarter collectively saw a net decline in post-paid, or contract, subscribers. The largest seven carriers lost a combined 52,000 contract customers, according to
the latest data from mobile consulting and research firm Chetan Sharma. The firm attributed the dropoff to
wider adoption of prepaid phones in recent times and heightened competition for remaining potential contract customers.
Where will carrier revenue growth come from in the future? With
smartphone penetration estimated at 43% as of the first quarter, Chetan Sharma says that still leaves room for people to upgrade and for plans that include data subscriptions.
Almost 70% of
devices sold in the first quarter were smartphones.
The introduction of family data plans in the U.S. is also expected to be a boost for data revenues. Both Verizon Wireless and AT&T have
confirmed that they plan to roll out “data share” plans that let customers pay for a fixed amount of monthly data and share it among family members. Current wireless family plans allow
members to share voice minutes, but not data.
The U.S. mobile data market in the first quarter increased 21% from a year ago, and 6% from the prior quarter, to $18.7 billion. Data now
makes up 40% of mobile industry service revenue. Chetan Sharma is predicting mobile data revenue will reach $80 billion in the U.S. this year.
Driving sales is the projected doubling of mobile
data consumption this year, with data accounting for over 85% of U.S. mobile traffic. Another interesting factoid from the first-quarter report: The wireless-only population in the U.S. has surpassed
100 million, meaning about one-third of Americans don’t use landline phones. “Mobile will continue to increase its share of the household IT budget and thus improve the overall revenue
picture,” stated Chetan Sharma.
Looking ahead, the firm expects the battle among the biggest tech players to heat up as they build out competing mobile platforms. “Google is
preparing to get deeper into the handset business, while Amazon and Facebook are tinkering with their own handsets. Microsoft is banking on the Lumia success and the release of Windows 8 and its
impact on the ecosystem will be closely monitored,” according to the report.
It also points out that Samsung is putting more resources behind the Tizen mobile operating system, while
Apple still commands mindshare among developers and operators, as well as generating the most profits among phone makers.
Chetan Sharma projected that in the next three to five years, any
company that is not doing the majority of its digital business on mobile will be “irrelevant.” That’s not to say the desktop PC will disappear. But the investments, strategy and
execution will be driven by mobile. The firm points to apps and services today like Facebook, Twitter and Pandora that are already seeing mobile drive much or the majority of their user
engagement.
“Expedia, Fandango and others are seeing the early signs of migration into the mobile dominated world,” it notes.