Cellular Voice Revenues Fall, Data Doesn't Close Gap

A new study shows that the average revenue per user for cellular voice service is declining in the U.S. and that cellular data service isn't bridging the gap.

December 15, 2005

1 Min Read
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A study by Strategy Analytics released Thursday says that the average revenue per user (ARPU) that U.S. cellular operators received for voice services fell eight percent in the third quarter and revenues from data services did not make up for the loss.

This was the second quarterly decline in voice ARPU, according to the study. Overall, ARPU from voice in the U.S. declined eight percent in the third quarter compared to the same quarter a year ago, the study said. The decline is due to competition and declining prices for cellular voice service, according to the study.

The trend is a dramatic shift for the U.S. cellular market, according to David Kerr, a Strategy Analytics' vice president.

"For a long time the U.S. was a shining example of how to increase wireless subscribers will still growing average revenues and margins," Kerr said. "That climate is now starting to change."

Cellular operators have launched 3G service and myriad services such as video and audio services, in the last year. However, the study found that revenues from those services have not made up for the losses the carriers are suffering in terms of revenue from users, even though the growth pattern for cellular data is up."Data just cannot make up this shortfall at present," Kerr said. "While most other regions are seeing data ARPUs struggle to grow, the US is at least posting annual growth here in excess of 50 percent. But even this growth rate is down significantly from recent quarters."

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