Telecom Lead America: Data revenue is expected to
contribute 65 percent of total U.S. wireless service revenue as voice declines
to 35 percent in 2016.
Multi-device rate plans will play an important role in
the expansion of U.S. data revenue from $81.4 billion in 2011 to $151.9 billion
in 2016.
Mobile operators should adopt multi-device plans to
benefit from the significant expansion of cellular connectivity.
Connected CE devices include media tablets and mobile PCs
that have embedded or removable cellular modems to access the CSP’s cellular
network.
“Data rate plan uptake in the U.S has grown
dramatically in the past seven years due to the runaway success of the
smartphone market and has become a key revenue source for U.S.-based
communications service providers (CSPs),” said Hugues de la Vergne,
principal research analyst at Gartner.
“Historically, CSPs have strictly been focused
on individual data plans. Now the U.S. data plan market is set to begin its
first real transformation, with data plans poised to evolve from plans tied to
an individual device to plans that share a specified amount of data between
multiple devices,” Vergne added.
Lowering churn is one of the most critical metrics for an
operator. By having multiple devices with different replacement cycles
tied to a CSP’s network, the end user is less likely to churn away from that
CSP as opposed to a subscriber with just a mobile phone.
Device producers should embed cellular connectivity into
more CE devices to obtain higher margins, or try to obtain CSP subsidies and
use seamless integration between devices as a competitive differentiator.
The launch of multi-device data plans by CSPs will be a
key cause of the increase in sales of cellular-enabled devices, including
smartphones, which Gartner estimates will reach 311.7 million units in
2016. Device vendors, which have had a growing threat of commoditization,
need to continue to innovate to avoid the high level of competition that has
engulfed the market.
Billing system customization will be expensive and CSPs’
current data revenue streams could decline.
Data revenue is expected to expand to become 65 percent
of total U.S. wireless service revenue as voice declines to 35 percent in 2106.
Driving the explosion of mobile data will be the increase
in demand for mobile video content, which will drive sales of larger-screen
devices, such as media tablets.