Data driving increased ARPUs in saturated industry

The four national U.S. mobile operators added half as many postpaid customers during the second quarter of 2012 as they did one year earlier, indicating an overall industry slowdown, according to the Wall Street Journal. Total annual contract subscriber growth is now at a mere 1 percent, though, on the upside, U.S. mobile operators are expanding their margins and recording record profits. Data services have been key to higher average revenues per user, with ARPU gains coming not from price increases but instead from the shifting of postpaid customers away from feature phones to data-intensive smartphones, which are more lucrative and generally drive increased monthly bills, said Craig Moffett, an analyst with Sanford Bernstein, who was quoted by the Wall Street Journal.

New data-sharing plans introduced by AT&T and Verizon Wireless reflect operators' understanding that the saturated mobile market means they must grow their market shares, convince customers to add more devices to their accounts and raise prices in order to expand revenue growth. Verizon and AT&T have been winning on the market-share front, increasing their shares of contract customers to 41.8 percent and 32.8 percent in the most recently ended quarter, respectively, while Sprint Nextel and T-Mobile continue to lose ground. For more on the state of the U.S. wireless industry, see this article.

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