Setting a major industry trend, mobile data revenue has overtaken voice calls income in Q4 2013 in America, said Chetan Sharma Consulting.
The report said mobile data service revenue reached $90 billion last year and accounted for more than 50 percent of revenues for wireless companies in the final quarter of 2013.
The growth was driven by telecom operators’ recently launched mobile data plans and usage of wireless customers.
Mobile data predictions
The United States will become the first country to bring in $100 billion in mobile data revenue against $1 billion in 2002, Reuters reported.
Customers are increasingly using their smart phones and tablets the way they use desktop computers, driving the rise in data consumption as they stream videos and download dense applications, said Sharma.
ABI Research said more than 55 percent of the cheapest country tariff plans are 4G compared to 22 percent a year ago. This has been driven by the aggressive deployment of LTE networks and a wider choice of consumer-centric LTE smartphones.
“However, we found that the average cost of mobile Internet tariff plans across the cheapest 20 markets increased by 8.24 percent between Q1-2013 and Q1-2014,” said Marina Lu, research associate at ABI Research.
While 55 percent of the 20 cheapest country plans were 4G, 4G tariff plans were only marginally more expensive than 3G tariff plans. One year ago, the 4G data pricing was around 20 percent higher than 3G for the equivalent data-plan. Competition is forcing the mobile operators to pare down the prices of even their 4G tariffs.
The current 4G service adopters are bigger spenders than their 3G and 2G counterparts, and mobile operators are keen to lure across these upgrading 4Gsubscribers, but carriers should not over-shoot in their tariff plan reductions.
How to monetize from mobile data
Rohan Dhamija, head, India and South Asia, Analysys Mason, said: “Operators can use the rich data experience of LTE to sell more data and develop new revenue streams. Video streaming providers such as Netflix alter the quality of video according to available bandwidth – so a 6-minute clip on LTE would consume 80MB compared with 27MB on 3G, thus driving usage.”
Internet brands, such as Google, already offer value additions for their users to engage with their subscribers. “Telecom operators must replicate this model and routinely offer customers new services, which will add value and strengthen customer loyalty to their 4G networks,” said Mark Windle, head of Marketing at OpenCloud.
Mobile data trends in the U.S.
Last month, Cisco Systems issued a report saying that by 2018, U.S. consumers will upload more data on smartphones than they did on laptops in 2013, Reuters reported.
Data packages will devour voice services altogether as companies experiment with transforming voice calls into voice apps carried as data, Sharma said.
Later this year, Verizon and T-Mobile will launch Voice over LTE which will transform a voice call into a data call.
The rise in data usage has also intensified competition among the country’s major carriers for growing revenue from data-hungry customers.
In the past month, Verizon and T-Mobile have doubled the amount of data customers receive for the same price while AT&T has cut prices for their 2GB plan by $15 a month.
At T-Mobile, customers are now consuming 50 percent more data than they were one year ago.
At a Deutsche Bank Media, Internet and Telecom Conference earlier this month, Fran Shammo, CFO of Verizon said that while competition is stiffer, revenues are growing.
“What we expect is that you will get more and bigger data bundles, but people are going to use more, so the revenue drive is going to continue,” he said.
Mobile carriers are gearing up for a bitter face off for more spectrum in government auctions, as they fear the demand for data will soon exceed network capacity and connections speed will slow.
Verizon CFO Shammo said the quest for more spectrum is one of the highest priorities on the company’s budget.
Will telecom network vendors benefit
In 2013, global 2G, 3G and 4G wireless infrastructure revenues stood at $52 Billion. SNS Research estimates that these revenues, from macrocell Radio Access Network (RAN) and core network investments will remain flat in 2014. However, the market is expected to decline at a CAGR of 2 percent over the next 6 years, eventually shrinking to $47 Billion by the end of 2020.
Though 4G LTE macrocell RAN and core network investments will not be able to compensate the overall declines in 2G, 3G and WiMAX equipment sales, operators are expected to significantly increase their spending in the evolving HetNet market, which encompasses small cell, carrier Wi-Fi, Distributed Antenna Systems (DAS) and cloud RAN equipment.
Small cell and carrier Wi-Fi equipment alone will represent a market worth $4 Billion in 2015. Supplemented further by DAS and Cloud RAN investments, the HetNet sector is attracting considerable attention from both established vendors as well as startups which solely focus on the market.
picture source: forbesindia
Baburajan K
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