As the wireless market matures and voice services become more of a commodity, the competitive landscape among U.S. wireless carriers is rapidly evolving. In a new study of the U.S. wireless services market, IDC found that U.S. wireless carriers generated $1.6 billion in data service and application revenues in 4Q04 from a base of 178.2 million subscribers and customers.
Data services and applications are essential to slowing or reversing the slide in average revenue per unit (ARPU) associated with the voice side of the business – and while data represented some 5.8% of industry-wide ARPU in 4Q04, IDC anticipates it will grow to better than 15% of total service revenues in the years ahead. IDC’s comparison of data services and applications currently supported by the 5 major U.S. wireless carriers is divided into three broad categories: messaging, content and application downloads, and other services and content.
“Messaging led the way at around 50% of total revenues in 4Q04, although as an overall percentage of revenues it is declining. While Cingular Wireless took top honors in several key metrics, principally due to its larger subscriber base, Verizon Wireless also had a particularly strong showing in the content and application download category. However, Sprint PCS is hands down the market leader in terms of data spending on a per subscriber per month basis,” said Lewis Ward, senior research analyst of IDC’s Wireless and Mobile Communications program.
In the study, IDC offers recommendations to U.S. wireless carriers as they continue to focus on key strategies that allow them to achieve and sustain growth involving data services and applications, including building a value-oriented data strategy, fine-tune marketing strategies for the youth and young adult markets, and looking for new customers by exploring emerging opportunities such as MVNO’s and prepaid.
The IDC study, U.S. Wireless Carrier Data Services and Applications 4Q04 Service Provider Analysis (IDC #33291), presents a competitive analysis of the wireless data services and applications delivered by the major U.S. wireless carriers for the fourth quarter of 2004, as well as an aggregated view of the rest of the market and the market as a whole. Each of the national carriers’ performance is separately compared from a revenue and traffic/volume perspective. Market share totals and additional analysis provide a view into the widely divergent data strategies implemented by the industry. IDC plans to deliver this study and associated data metrics on a quarterly basis moving forward.