Wireless Revenue Slowdown?

Both AT&T and Verizon's postpaid average revenue per user growth in the third quarter was slightly lower than consensus estimates.

These trends are prompting analysts to ask whether wireless service, traditionally the telecom industry's most dynamic sector, is headed for a slump. A delay in launching the iPhone 4S probably was a factor.

Nomura Securities analyst Mike McCormack says he is "concerned about the outlook for the economics of the wireless business." McCormack notes that Verizon's wireless service revenues grew 6.1 percent in the third quarter, compared to 6.6 percent in the second quarter.

"We remain concerned about consistent industry deceleration in total service revenue," he added.

Macquarie Capital analyst Kevin Smithen also speculates about whether "some adverse macroeconomic effects [are] beginning to creep through to the carriers."

Wireless Revenue Slowdown?

The Voice Revenue Problem

Only 70 percent of households in Marshall County, Indiana have landlines in 2011, a figure that is expected to decrease to 50 percent in the next two years. That statistic is one important facet of the voice services business: people simply are starting to use their mobile devices as their primary “phones.”

The other important angle is less usage of voice communications overall, on both mobile and fixed connections. According to Nielsen, the average number of mobile phone calls we make is dropping every year, after hitting a peak in 2007. And our calls are getting shorter: In 2005 they averaged three minutes in length; now they’re almost half that.

Also, in part because of the prevalence of VoIP services, unit prices are under pressure. Servive provider executives are no dummies. They know all that, and already are moving ahead with initiatives that will replace lost revenue and still provide a growth path.

But there are lots of thorny, practical issues. Consider investment. How much should a rational executive invest in a declining business? How much should it try to innovate? What is the balance between support for growing businesses and networks, and declining businesses? When does network investment become stranded? What should executives do about all that?

The Voice Revenue Problem

AT&T Mobile Revenue Grows: It Has To

AT&T wireless data revenues, driven by messaging, Internet access, access to applications and related services, increased nearly $1 billion, or 23.9 percent, in the first quarter of 2011.

AT&T had its "best-ever first-quarter increase in total wireless subscribers," up two million to reach 97.5 million subscribers in service, with gains in every category, AT&T says.

AT&T also reported best-ever first-quarter smartphone sales of more than 5.5 million.

Those sorts of results ultimately will be important for many global mobile operators, given the gradual decline of voice revenues, and the importance of the voice revenue stream to total revenues, as this Yankee Group graphic indicates.

read more here

Mobile Service Revenue in 2014: $870 Billion or More

Mobile services revenue will grow to $870 billion in 2014 based on mobile broadband and messaging, Infonetics Research now forecasts. Some think mobile revenues will be even more substantial, surpassing
$1 trillion and accounting for more than half of all global telecom service provider revenue. See http://ipcarrier.blogspot.com/2010/01/how-will-global-telecom-revenue-sources.html

Mobile broadband and mobile messaging service revenues are growing rapidly and will help operators offset declining voice revenues, says Stephane Teral, principal analyst.

but voice service isn’t going away anytime soon; in fact, voice will still account for almost 60% of the mobile pie in 2014. Operators need to continue selling smarter phones and upselling data plans to keep pace with falling voice usage,” says Stéphane Téral, Infonetics Research’s principal analyst for mobile and FMC infrastructure.

Mobile services to hit $870 billion in 2014

Mobile Growth Shifts to Content

Mobile revenue growth now is shifting to mobile broadband and data, as you would expect, with the saturation of basic voice connections.

The next wave of growth will come from commerce and content sales, PricewaterhouseCoopers now predicts.