CTIA: U.S. mobile data traffic increased 26% in 2014, but growth rate falls sharply from previous year

Americans continue to guzzle more wireless data, but data traffic is not increasing at the rapid rate it once was, according to a new report from CTIA. The report also found that wireless service revenue fell in the U.S. last year; service revenue had increased every year since 2000 before last year, the trade group's report said.  

In its annual report on the state of the industry, the lobbying group for U.S. carriers said that U.S. wireless providers handled more than 4.06 trillion megabytes of mobile data traffic, up around 26 percent from 3.23 trillion megabytes of data traffic in 2013. However, while data traffic is still growing, the growth is slowing, as CTIA has reported last year that data traffic increased 120 percent in 2013. In 2012, CTIA reported that participating wireless carriers reported handling 1.47 trillion MB of data, which was up 69.3 percent from 2011.

CTIA said that total reported service revenues fell 0.7 percent year-over-year in 2014 to $187.8 billion, down from $189.2 billion in 2013. Service revenues likely fell last year for several reasons.

There were more than 100 pricing changes in 2014, as carriers launched a flurry of promotions and cut prices in a bid to win market share. Further, carriers promoted and customers increasingly embraced equipment installment plans, which typically come with lower service pricing while customers pay off their devices in monthly installments and can upgrade earlier.

The drop in service revenue correlated to a drop in ARPU, CTIA found, with ARPU falling 4 percent year-over-year to $46.64 across the industry from $48.79 in 2013. However, when combining service and equipment revenues, total revenues jumped 4.3 percent to $224.1 billion.  

Interestingly, CTIA found that the total number of operational cell sites fell 2 percent to 298,055 in 2014, down from an all-time high of 304,360 in 2013. CTIA attributed the drop to industry consolidation and the retirement of older technologies. Indeed, T-Mobile US (NYSE:TMUS) spent a good chunk of last year shutting down most of its legacy CDMA network it acquired along with MetroPCS, and some smaller carriers went out of business, including  Plateau Wireless, which AT&T Mobility (NYSE: T) acquired.  

CTIA's Annual Wireless Industry Survey is completely voluntary and thus does not yield a 100 percent response rate from all carriers. However, the trade group said the survey has an excellent response rate. For the 2014 installment of the survey, CTIA aggregated data from companies serving more than 97 percent of all estimated wireless subscriber connections.

For more:
- see this CTIA post
- see this CTIA presentation (PDF)

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Verizon criticized for posting blog that suggests customers do not want or need unlimited data
Pew: 64% of American adults have a smartphone, and 10% rely on it for their broadband connection
Report: LTE drives up mobile data consumption
Ericsson: Facebook, YouTube, Netflix, Instagram and Snapchat make up 61% of U.S. mobile app traffic

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