U.S. mobile data revenues grow to $34B in 2008

The U.S. mobile data services market posted quarter-over-quarter revenue growth of 7.3 percent in Q4--a 38.7 percent increase over fourth-quarter 2007 figures--to generate total revenues of $9.4 billion, according to research firm Chetan Sharma Consulting. In all, the U.S. mobile data segment yielded revenues of $34 billion in 2008 despite growing concerns over the global economic meltdown. Chetan Sharma notes that while the economy is already negatively impacting the infrastructure and handsets segments, consumers have not yet begun cutting their overall mobile data spending, although some sub-segments like data card subscriptions and downloadables are starting the feel the squeeze.

AT&T experienced the most significant data revenue growth at 12 percent quarter-over-quarter and 52 percent year-over-year. Verizon Wireless enjoyed a 42 percent annual increase, and T-Mobile USA grew 30 percent year-over-year. Both AT&T and Verizon Wireless exceeded $10 billion in annual data revenues for the first time, joining Japan's NTT DoCoMo and China Mobile in that exclusive club. Together AT&T and Verizon now account for 62.5 percent of U.S. mobile data services revenues. In all, the average industry percentage contribution of data to overall ARPU reached 25 percent in 2008--a year earlier, the percentage contribution stood at approximately 19.3 percent. Chetan Sharma anticipates the U.S. market will exceed the 30 percent benchmark in 2009.

Chetan Sharma cites the confluence of 3G, superior devices and smartphones, and the evolving applications ecosystem as the catalysts behind the strides made by mobile data in 2008, adding that the market experienced quarter-over-quarter growth between 7 percent and 9 percent during each quarter last year. But given the bleak economic forecast, mobile data's immediate future is in grave doubt--Chetan Sharma contends that if consumer sentiment and market psychology improve or remain consistently positive over the next three to six months, the current recession will register as little more than a blip on the overall U.S. mobile data market, but if consumer confidence nosedives, subscribers are likely to begin slashing their discretionary mobile data spending and downgrading their wireless plans.

In the meantime, messaging volume continues to grow, increasing 15 percent in Q4 and translating to a 5.5 percent revenue increase over Q3 totals. Chetan Sharma adds that data access (excluding data card) including flat-rate data plan subscriptions also showed significant strength, thanks to increased mobile data activity amongst feature phone users as well as smartphone users. Still, Chetan Sharma forecasts that if unemployment continues to grow at the current rate, data revenues will flatten in the first quarter of 2009 and continue a gradual decline over the remainder of the year. The firm anticipates that the year ahead will likely see continued price and margin pressure on subscription plans, with data ARPU emerging as a more prominent element of overall ARPU as voice revenues continue to decline.

For more on the Chetan Sharma forecast:
- read this release

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