Wireless Growth Seen Shifting From Consumer To Business

With revenue growth from wireless voice traffic slowing, U.S. wireless providers will focus on wireless data services and businesses, reports say.

March 30, 2006

1 Min Read
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With revenue growth from wireless voice traffic slowing, U.S. wireless providers will focus on wireless data services and businesses, according to two reports released Wednesday by IDC.

Wireless service providers enjoyed a stellar 2005 year with some 200 million subscribers and a near market saturation of 70 percent, the market research firm said. But that is changing. The consumer voice business is likely to begin turning later this year, first with a leveling off of growth, then with total voice revenue expected to drop in the 2008-2009 timeframe, IDC said.

"Total voice service revenue declines (later) will jolt an industry accustomed to 25 years of voice revenue growth," said Scott Ellison, program director, IDC Wireless and Mobile Communications, in a statement. "Driving further adoption usage of data services will be critical to maintaining total ARPU (Average Revenue Per User)."

The solution, Ellison indicated, can be largely found in the business sector, which is expected to grow from $29 billion in 2005 to $52 billion in 2010.

Noting that wireless services are well suited for businesses, IDC predicted that wireless devices on master corporate contracts that manage costs will take off. He observed that such contracts will likely limit non-business usage like free night and weekend calling. He also cited data services like e-mail and laptop air card subscriptions as expected examples of business data usage.The report took note of the expected expanded role of mobile virtual network operators (MVNOs) in the marketplace, which will push many wireless service providers to adopt a retail market model.

(Correction: AIRCARD is a trademark owned by Sierra Wireless. A previous version of this article incorrectly identified it.)

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