Data services prop up wireless revenues

A decline in voice revenues means advanced data services will become crucial to the bottom line, according to a study

The number of mobile phone subscribers will grow to more than 1.75 billion worldwide by 2007, with data services playing an increasingly important role in the wireless economy, according to research firm The Yankee Group.

In a report released on Monday that looks at average revenues per user (ARPUs), the research firm said that services based upon data networks such as GPRS will be increasingly important to network operators' bottom lines, as voice revenues decrease in real terms.

The figures in the report Data ARPUs save the day for wireless operators underscore the growing significance of data services, which range from text and picture messaging to wireless Web browsing and video downloads. Mobile phone companies have been trying since the days of WAP to convince users of the benefits of mobile data, but newer camera-phones and smartphones have finally made the market a reality.

"(Average revenues) grow with penetration because 2.5G networks bring new applications to new markets," said Yankee Group analyst Wally Swain in a statement. "Not only will business use of wireless data for enterprise applications increase, but consumers also will find new sources of entertainment and information."

Generally, revenues for each voice user will decline in all regions, while increases in data revenues will prevent the total from showing a drastic decline, the company projected. Revenue growth will depend upon subscriber growth, which will be stronger in some regions than others, the company expects.

Globally, subscribers will increase nearly 9 percent from 2002 to 2007, with revenues growing 9 percent on average. The fastest-growth regions will be Asia Pacific and Latin America, with 10 percent projected growth, and nearly 20 percent growth for China, Yankee Group said.

Growth in the more mature North American and European markets will be slower. North American growth is projected at less than 5 percent and Europe, the Middle East and Africa will see 7 percent growth, The Yankee Group said.

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