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Mar. 8, 2010

Overall, worldwide wireless end-user ARPUs (average revenue per user) actually decreased to between six percent to nine percent year-over-year in the third quarter of last year, according to new numbers published by ABI Research.

ABI actually suggests that as voice revenues decline, mobile operators will have to increase the uptake of wireless Internet services and revenues to compensate for their declining ARPU.

India, the world's second-largest market in terms of mobile subscribers just after China, saw ARPUs drop more about 11.2 percent year-over-year in the same period, as new mobile operators and the introduction of per-second billing placed heavy downward pressure on wireless voice revenues.

In Europe, weaker ARPUs were in the range of about five percent to eight percent, with Austria seeing a drop of almost ten percent.

But ABI Research estimates that ARPU drop is likely to flatten out in some developed markets in Europe and North America as mobile data revenue increasingly replaces falling voice revenue in 2010.

But overall, wireless data traffic has increased considerably since mid-2008 and is expected to expand at a compound annual growth rate of about 42.5 percent from now until about 2015.

"Mobile service operators can cash in on this growth in demand by enlarging their mobile broadband coverage. This has started to happen in developed markets such as the U.K. and U.S., where mobile Web service revenues have grown about 13 percent and 9 percent year-over-year, respectively," said ABI analyst Bhavya Khanna.

Worldwide, the growth in minutes of use has also peaked and is expected to grow at a compound annual growth rate of only about 1.3 percent between last year and 2015.

Much of this growth is driven by developing markets in Asia, the Middle East and even Africa, says ABI.

Last month, Cisco's Visual Networking Index Global Mobile Data Forecast revealed that global mobile data traffic could hit a rate of over 40 exabytes in less than four years from now.

This is about 3.6 exabytes a month, the equivalent of approximately 134 times of all the data traffic that has ever gone over mobile networks from their beginning in the mid-80s up until today.

Cisco's most recent study suggests that mobile video will represent 66 percent all mobile data traffic by 2014, increasing 67-fold from just last year to 2014 – the highest growth rate of any mobile data application tracked in the company's forecast.

"Overall, wireless data traffic is growing faster than most people ever expected just five years ago," said Cisco Senior Director of Service Provider Marketing Doug Webster in the report.

"The rapid consumer adoption of smartphones, netbooks, MIDs (mobile Internet devices) eReaders and Internet-ready video cameras as well as machine-to-machine applications like eHealth monitoring and asset tracking systems, are all continuing to place unprecedented demands on mobile networks, and the inherently large traffic increases they will cause."

For example, take just one country: India. Just that single nation is expected to have the highest mobile data traffic growth rate of any other country, with a staggering compound annual growth rate of well over 220 percent for the forecast period, closely followed by China with over a 170 percent rate and South Africa with a 156 percent growth rate.

Cisco's newest report also suggests that worldwide mobile data traffic has increased by about 160 percent over the past year to 90 petabytes per month, or the equivalent of 23 million DVDs.

In less than four years from now, Cisco also predicts that about 405 million of the world's Web users will access the Internet solely through a mobile connection more than a typical desktop computer.

Cisco's newest report relied upon various independent analyst forecasts as well as real-world mobile data usage studies, among other factors.

In an effort to better respond to this important growth in mobile data traffic, for its part, Juniper Networks said it will soon unveil three mobility solutions under its Project Falcon initiative designed to allow wireless carriers to better optimize network traffic on their current infrastructure and to provide a smoother path for efficiently migrating from 3G to 4G technology.

It will be interesting to see how the next six months pan out. We will keep you posted on these and other wireless news.

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Source: ABI Research.