Wireless Data Growing as the Landscape Shifts

[hari]

Pyramid Research's new report provides some interesting details on the overall growth and shifting dynamics in the wireless data sector.

Last year, the firm said, 19 percent of mobile service revenue was in the form of data. That number will reach 29 percent in 2012. The report, according to Cellular-News, says through 2012 more than 60 percent of revenue will come from the developed markets — even though they represent only 15 percent of world. The longer-term trend is toward under-developed areas, however, which will be able to serve huge segments of previously unserved population with WiMax and Long Term Evolution (LTE) 4G platforms. From last year through 2012, data revenue from emerging markets will grow more than 50 percent faster than the growth in developed markets.

The dynamic is changing within the developed world in a somewhat different manner. The big losers are the traditional carriers. BusinessWeek says that about 80 percent of mobile phone content now is bought through portals run by carriers, but that the portion will drop to 25 percent in five years, at least according to one analyst. The thesis of the piece fits in very well with the nature of the recent — and still contested — 700 MHz spectrum auction that mandates open access. The fact that they are losing control of content will lead carriers to more fully focus on their core business, which is access. The BusinessWeek piece quotes a Sprint Nextel executive to the effect that the company is comfortable with that outcome.

Analysts are fairly consistent on wireless data trends. WebProNews reports that Chetan Sharma Consulting said that India has passed the United States in number of subscribers, while the U.S. has passed Japan in service revenue. The overall numbers are interesting: Wireless revenue for the U.S. is $24.5 billion, nosing out Japan's $23.2 billion. China is third at a "measly" $12.5 billion. In total subscribers, China dominates with half a billion subscribers. India and the U.S. have about half as many.

This nicely done consumer feature in the Houston Chronicle discusses the increase in mobile data. Juxtaposed against the reality that carriers are slowly losing control of the category, figures in the piece — AT&T and Verizon experienced wireless data revenue jumps of 58 percent and 53 percent in 2007 over 2006, respectively — raise the question of whether these companies may have a false sense of security. The writer describes Wellness Wireless, a company that embeds a glucometer into a cell phone to track blood sugar levels of diabetics and transmit the results to trained professionals. It's an interesting niche application, and one that can be supported by many companies, not just carriers.