Consulting firm Chetan Sharma recently released its U.S. Mobile Market Update covering the fourth quarter of 2013 and the past year overall. Analysts found a number of disruptive factors that left a significant impact on the development of the wireless industry during that period, including the growing popularity of mobile data services and T-Mobile's innovative pricing structures. All told, Chetan's findings reflect an industry in a state of flux, with emerging developments threatening to completely change the nature of the wireless game.
Mobile data service revenue nears $100B
Considering the large variety of features offered by today's smartphones, it's no wonder that mobile data service revenues are on the rise in the United States. According to the study, these figures rose 5 percent in the fourth quarter when compared with results from the same timeframe in 2012. Over the course of 2013, mobile data service revenues increased 20 percent year-over-year, reaching a total of approximately $90 billion. Chetan Sharma analysts predicted that this figure will surpass $100 billion by the end of 2014, making the U.S. the first country to pass that benchmark.
Untraditional mobile devices such as tablets were credited with helping to spur this growth, as they accounted for a majority of the more than 12 million new subscriptions tallied in 2013. Mobile data's impact on the U.S. wireless sector has risen significantly over the years, becoming a major driving force for market growth and accounting for more than half of all revenue in the industry. The reported noted that in 2004, mobile data contributed a mere 4 percent of all mobile service-based revenue.
T-Mobile leads a pricing shake-up
Customer complaints regarding pricing plans has been a hallmark of the telecom industry, but new approaches to rate structures have had a domino effect across the sector. T-Mobile has widely been credited with launching the first salvo, offering new pricing plans to distinguish the carrier from its competition. However, analysts cautioned that these moves will likely be limited to short-term gains as other carriers follow suit.
"Right now customers are primarily switching to T-Mobile based on pricing, meaning once other operators (of course a big IF) get close to their pricing, other factors start to matter again like network quality and coverage," the report stated. "In 1-2 years, all four operators are likely to have similar LTE coverage and reliability."
Larger carriers have already begun to offer more competitive pricing plans in response to T-Mobile's recent success. In December 2013, RCR Wireless reported that AT&T Mobility updated its Mobile Share plan to feature lower and more dynamic subscription rates. Many analysts viewed these moves as a direct attempt to draw away T-Mobile's clientele.
Service revenue, subscriber leaders
Across the telecom industry, service revenues and subscriber rates were generally on the rise in 2013. Some carriers managed to stand out from the crowd in this regard, however. Verizon and AT&T continued their domination of the U.S. mobile market, together accounting for 68 percent of mobile data services revenue and 67 percent of subscribers in the country.
Regarding total number of added subscribers, Verizon and T-Mobile jointly held the lead, each bringing in more than 1.6 million new customers during the reviewed time frame. Sprint did not experience the same level of good fortune, however, continuing its losing trend in the postpaid segment.
Handset market continues robust performance
Smartphones remain widely popular in the United States, featuring a penetration rate of 66 percent and accounting for nearly 92 percent of all mobile devices sold during the fourth quarter of 2013. Overall, however, sales of smartphones declined year-over-year, reportedly due to policy shifts. The market continues to be dominated by iOS and Android, with the former platform accounting for nearly half of all smartphones sold in the reviewed quarter.
