A new study shows Average Revenue Per User (ARPU) does not reflect the true extent of consumer spending on cellular services. The true figure is considerably higher, particularly in North America. Standard industry metrics such as ARPU and penetration levels are being distorted by consumers spreading their spending across multiple SIMs and devices. According to the Wireless Intelligence study, although ‘revenue per real user' has increased in North America, in Western Europe consumer spending on cellular services is in decline and operators are failing to capitalise on opportunities such as mobile broadband.
The ‘real' mobile penetration in North America was found to be 71 per cent in 3Q09 compared to the reported penetration of 92 per cent whilst Western Europe had a ‘real' penetration of 87 per cent compared to a reported 128 per cent. The multiple penetrations issue has also confused the ARPU picture. This had been considered to be falling or flat in most markets but, says the study, when multiple connections per user are taken into account, consumer spending on mobile is shown to be rising in some regions. For example, according to Wireless Intelligence, reported ARPU in North America has been flat at around US$51 since 2006, but the new study reveals that revenue per real user has increased from US$60 to almost US$64 over the same period.
In Western Europe, revenue per connection has been falling by 5.4 per cent (CAAG) over the last three years, while revenue per real user is also declining, though by a smaller margin, by 2 per cent a year over the same period. The study found that revenue per connection in Western Europe will fall to 23 euros this year compared to 24.7 euros in 2008, while revenue per real user will fall to 33 euros this year from 34.2 euros in 2008.
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