Wireless data worth more than $5B in Q1

The U.S. wireless data market generated more than $5 billion in revenue during the first quarter of 2007, according to Chetan Sharma Consulting, and data may make up as much as 20% of carriers’ service revenues by the end of the year.
Sharma, founder and president of the consulting and research company, predicts that Sprint Nextel Corp.’s longstanding leadership in data ARPU figures will be overtaken by Verizon Wireless by the third quarter.
“Verizon is clearly doing better than the rest of the pack,” Sharma said. Verizon Wireless saw its data revenues jump 80% year-over-year to $1.6 billion in the first quarter of 2007, and data revenues now make up 17.4% of its total service revenues. AT&T Mobility, he noted, has been lagging because of the limited reach of its 3G network, but now is rebounding. The company said in its most recent quarterly report that it saw a 30% jump year-over-year in the number of active data users among its 62.2 million customers-but that still only brought the total number of data subscribers to 33.4 million.
Meanwhile, T-Mobile USA Inc. has continued its focus on messaging and been successful to the point that its 26 million subscribers sent 16 billion text and multimedia messages during the first quarter-more than the 14.2 billion messages sent by AT&T Mobility’s subscribers. The number is especially notable since T-Mobile USA commands less than half the subscriber base of AT&T.
Although text messaging is widely recognized as the most popular data service, Sharma calculated that when business and consumer data use is combined, non-SMS use actually made up about 60% of data revenues in Q1.
“People are actually starting to use the data cards now,” he said. “Because of the slow data connections, they used to use it very occasionally.” Also, he said, businesses are buying unlimited data plans for their employees, which contributes to the revenue growth.
Part of the growth is due to a shift in carrier advertising from emphasizing voice plans to promoting applications and services beyond voice, Sharma said. And, he added, “It’s not only the carriers, but also the big brands like Yahoo, Microsoft and Google saying, ‘Download this, download that.'”
Sharma said that data has plenty of room to grow. He pointed out that only about 35% to 40% of U.S. wireless subscribers use text messaging, while the percentage of wireless subscribers who use the wireless Web hovers between 10% and 15%.