SNL Kagan, a company that provides revenue projections for various communication outlets, predicts that in the next 10 years 84% of Americans will have a mobile phone. Mobile subscriptions are supposed to grow at a rate of 3% despite the fact that the American population is only projected to grow at a modest 1% rate. This growth rate is attributed to an increase in mobile data use, including Web, text and video services. Multimedia services partially or wholly paid for by advertising play a large part in the projected increase.
SNL Kagan projects total industry average revenue per user (ARPU) to grow at an inflation-paces compound annual growth rate of 1.5% over the next decade. This means the ARPU should increase from today’s $52.38 to $61.09 by 2017. Data ARPU is projected to be even stronger, with an increase from $5.92 to $8.58 by 2017.
“If carriers can hold onto their position in the revenue chain, data is poised to give them a second growth spurt,” says SNL Kagan senior analyst Sharton Armbrust. “While subscriber units and voice revenue will inch along, we expect data revenue to grow at a compound annual 14% rate over the next 10 years, rising to at least 22% of service revenue, compared to under 10% today.”
If data revenue is to grow, the American public is going to have to be sold the proposition that such mobile phone services are required. Mobile data is going to have to be sold as something practical, necessary and inexpensive. There will always be people who are interested in the latest gadget and application, but the majority of people want practicality. What is the advantage to me in watching video on my phone? Why do I want to text message someone when I can just call them? If I can use the Web on my PC, what is the point of doing so on my phone? If these and similar questions can be answered by manufactures and mobile service providers, SNL Kagan’s predictions may be on the mark. But projecting a rosy future based on what’s trendy today is bound to be disappointing.