Wednesday, September 18, 2013

Postpaid Wireless Data Revenues Dominate Telecom Revenue Growth

Postpaid mobile data revenues remain the U.S. telecom industry's growth engine, says Atlantic-ACM. Postpaid mobile data revenues will hit $130 billion by 2018.

"In fact, while postpaid revenues represented less than a fifth of the industry in 2012, they'll grow at 11.5 percent annually to represent more than a third of total industry revenues by the end of the forecast period," said  Douglas J. Barnett, Atlantic-ACM senior analyst.

Revenue growth has been lead by mobile data for several years, according to Pyramid Research. 

Even in the event of a dramatic escalation of price competition in the U.S. market, the trend is likely to remain intact, as it is expected voice services will take a revenue haircut as service providers try to maintain data revenue growth while still facing a need to cut prices.

It's the same principle as price discounts for triple-play bundles. When a bundle price is cheaper than buying three services separately, something is being discounted, though the discounting is hidden. 

Since video entertainment prices cannot easily be cut without erasing profit margins, and since mobile data is leading growth, that means the declining voice service is where the actual price declines will mostly fall. 

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