Data will save mobile operators – report

Revenue hike

Mobile operators around the world will be spared from declining revenues thanks to increased use of data services, says the Yankee Group.

Over the next four years, the number of mobile phone subscribers globally will grow almost nine per cent, exceeding 1.75 billion, the analyst firm estimates.

But since the new customers are likely to use their phones far less than existing subscribers, ARPU (average revenue per user) will fall, argues Yankee analyst Wally Swain.

In fact, overall voice revenues could plunge as well, despite the increased number of users, partly due to competitive pressures that will force the cost of calls down, he says.

But revenues from data services -- such as SMS, MMS, e-mail, remote corporate access, Internet access and games --will buoy ARPU and overall mobile operator revenues, the Yankee Group says in its report, Data ARPUs Save the Day for Wireless Operators.

Global wireless service revenue will grow nine per cent, on average, to 2007. However, growth will vary from region to region and will be lowest in North America, where revenues will climb only five per cent. In the EMEA region there will be a mere seven per cent lift over the next four years.

Latin American growth should be over 10 per cent, however, behind the Asia Pacific region, which will record near 15 per cent growth in mobile operator service revenues. That region's growth will be fuelled by China, which should see a 20 per cent hike in revenues over the period.

Such assertions are sure to warm the hearts of the CEOs running mobile telecoms, who for years have insisted that data services are the big growth area as voice revenues stagnate.

In Ireland, for example, such trends are already afoot, with mobile operator O2 Ireland claiming to derive more tha 16 per cent of its service revenue from data. Group-wide, the company brings in about 19 per cent of revenue from data, only slightly behind its target of 25 per cent by the end of 2004.

The higher data spend is credited with boosting O2 Ireland's ARPU in its most recent quarter to €545 per year, up from €537 in the same quarter a year earlier. Vodafone Ireland, which is somewhat more tight-lipped about where its revenues come from, said that its ARPU is now at €565, up from €523 last year.

Swain said that the popularity of data services tends to grow with the launch of 2.5G (GPRS) networks, which often come with new applications for all types of subscribers. "Not only will business use of wireless data for enterprise applications increase, but consumers also will find new sources of entertainment and information," Swain said. In Ireland, O2 and Vodafone launched their GPRS services in early 2002.

© ENN

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