U.S. Mobile ARPU is Growing

Consumer demand for mobile Internet access has reversed a trend of declining average revenue per subscriber in the U.S. mobile market, the latest analysis by the Telecommunications Industry Association shows.

The average subscriber paid $50.35 per month in 2013, a five percent increase from 2012 and the largest gain over the past three years, says the TIA.  Prior to 2011, mobile average revenue per user revenues were generally declining.

In 2009, average revenue per user stood at $45.96. In 2013 ARPU rose to $50.35. By 2017, ARPU should stand at about $59.75, TIA predicts.

The implications for industry revenue are direct. Where in 2010 U.S. mobile service providers earned $152.6 billion, by 2013 the industry was earning $201.2 billion. By 2017, industry revenue will stand at about $263.1 billion.

Globally, telecom spending (both mobile and fixed) will grow at about a 4.3 percent compound annual rate.

Aside from the strategic role mobile Internet access now plays, the U.S. mobile industry has mostly moved from a “scale” business model (get more customers) to a “scope” model (sell more things to existing customers).

In other words, the industry as a whole cannot grow too much by adding new phone subscribers. Instead, subscription growth largely hinges on sales of connections for other devices such as tablets.

Voice and text messaging revenues no longer are growing, making the revenue growth agenda a matter of increasing both mobile Internet access revenue (selling new connections for tablets, selling more data plans) and new services based on Internet access.

For the first time in 2013, increased spending per subscriber contributed more to overall revenue growth than subscriber growth, TIA notes. Over the next four years, TIA expects higher ARPU will drive revenue growth, with increases at a compound annual rate of 4.4 percent.

While subscriptions grow at a compound annual rate of 2.5 percent (tablets will be key), TIA also predicts 6.9 percent compound annual revenue growth to 2017.
Post a Comment

Popular posts from this blog

Voice Usage and Texting Trends Headed in Opposite Directions

Who Are the Key Telco Competitors?

Jio is Succeeding at "Destroying" the India Mobile Market