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Wireless Data Outlook Is Good

Mobile data will come to dominate the U.S. wireless industry.

So says SNL Kagan, which cites the Apple iPhone 3G and new smart-phone products coming to market from other suppliers.

As service revenue flattens, the company predicts, carriers will rely on their data offerings to grow.

The financial information company said it expects mobile data revenue “to increase by a compound annual growth rate of 16 percent from $24 billion in 2007 to over $100 billion in 2017, compared to barely a 5 percent CAGR for total service revenue over the same period.”

“SNL Kagan’s estimates show average data subscribers growing at a CAGR of 5.8 percent to 249.5 million by 2017, comprising 77 percent of total wireless subscribers. During the same period, total wireless subscriber growth will increase by only 2.9 percent per year on average.”

As the market nears saturation, it says, sales of new data services are becoming the primary driver of revenue growth. “The largest source of mobile data use continues to be messaging and mobile e-mail.” Mobile Web users will grow to 52 percent of wireless subscribers in 2017.

“Within the mobile content categories, SNL Kagan expects mobile video/TV to ramp the fastest,” it continued, even compared to games and music. “Between 2010 and 2012, mobile video/TV usage will get an extra boost as phones compatible with the ATSC-M/H mobile broadcast TV standard emerge. Gaming will increasingly infiltrate the mobile phone medium as younger users age.”

Though the “top line” outlook for wireless is “relatively modest” right now, its analysts said, “we think the open-endedness of wireless data options, especially related to location sensitive and personalized mobile commerce and advertising opportunities, could give wireless a second wind in the not-too-distant future.”

(Radio World)