Torrid Wireless Growth To Cool, Study Predicts

An IDC study notes that the rapid rate of growth experienced by the wireless industry inevitably will cool, forcing operators to increase revenues from data services.

April 14, 2005

1 Min Read
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The cellular industry in the U.S. experienced growth that was so steep growth in 2004 that a slowdown is inevitable, according to a study released Thursday by IDC.

That doesn't mean that profits will shrivel, however, the study noted. It says that wireless carriers in the U.S. haven't yet started to profit from data services. As that happens, its average revenue per user (ARPU) will increase to $48 for consumers and $74 for business users by 2009, the study predicted. However, the increase will come from higher usage of cellular data services as revenue from voice continues to decline, the study said.

The challenge to operators will be to create brand loyalty for data, according to the study.

"What this means for wireless carriers is that they need to focus on aggressively diversifying their base of service revenue and creating a 'brand' experience to drive data ARPU higher," Scott Ellison, program director for wireless and mobile communications at IDC, said in a statement.

By contrast, with the nearly 75 percent of Americans having cellular voice service, there isn't as much revenue to be had in those avenues, the study said.

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