Wireless Data Revenue to Increase at 16% Annual Rate Over the Next Decade
Published on: 31st Jul 2008
Note -- this news article is more than a year old.
According to SNL Kagan s latest wireless projections the recent launch of Apple s iPhone 3G along with new smart phone offerings from other providers is setting the stage for mobile data to dominate the U S wireless industry SNL Kagan expects mobile data revenue to increase by a compound annual growth rate of 16 from 24 billion in 2007 to over 100 billion in 2017 compared to barely a 5 CAGR for total service revenue over the same period
SNL Kagan's estimates show average data subscribers growing at a CAGR of 5.8% to 249.5 million by 2017, comprising 77% of total wireless subscribers. During the same period, total wireless subscriber growth will increase by only 2.9% per year on average.
SNL Kagan predicts that by 2017, wireless subscribers will reach 90% per capita penetration. As the market nears saturation, 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 email, with 62% of wireless subscribers utilizing these services by 2017. Mobile web users, growing from 18% of wireless subscribers in 2007 to 52% in 2017, will comprise the second-largest category.
Within the mobile content categories, SNL Kagan expects mobile video/TV to ramp the fastest, with a 10-year CAGR of 22.5% versus 12.7% for games and 13.1% for music. Between 2010 and 2012, mobile video/TV usage will get an extra boost as phones compatible with the ATSC-MH mobile broadcast TV standard emerge. Gaming will increasingly infiltrate the mobile phone medium as younger users age.
"Right now the visible top line growth outlook in wireless is relatively modest, with declining sub gains and so much pressure on voice revenue countering the surge in data," said SNL Kagan analysts John Fletcher and Sharon Armbrust. "But 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. The wireless industry's biggest growth opportunities may well be the services we haven't even seen yet."