Data ARPUs Finally Supplanting Voice
After years of talking about the "tremendous promise" of wireless data, it appears that U.S. wireless carriers are finally beginning to see their data ARPUs (average revenue per user) reach high-enough levels to make up for any erosion that occurs in voice ARPUs.
Witness today's fourth-quarter earnings news from Cingular Wireless. The company reported a data ARPU of $7.19 in the fourth quarter, an increase of 53 percent over fourth quarter 2005. In addition, data ARPU now makes up 14.6 percent of total service revenue, an increase from 9.6 percent in fourth quarter 2005. "Data revenue is instrumental in the stabilization of voice revenue," said Stan Sigman, Cingular's president and CEO, in this morning's earnings call.
Cingular says that it has more than 32 million active data users. The firm admits that one of the biggest contributors to its data ARPU is text messaging; in fact it says 12 billion text messages were sent during the fourth quarter and it delivered nearly 180 million MMS messages.
Analysts have long said that most of carriers' data revenues were being driven by text messaging, and not the sexier (and more hyped) data offerings such as ringtones, wallpaper or game downloads. However, this one stat from Cingular is promising on that front--the carrier reports that it had 60 million downloads in the fourth quarter.
Cingular is the first operator to report its fourth-quarter earnings and it will be interesting to see how the others stack up when it comes to data ARPU. Sprint has long been the leader in data (among the Tier 1 operators), but a recent analyst report from IDC said that Verizon Wireless has eclipsed Sprint and is now the market leader among national carriers. We'll soon see whether IDC's predictions prove correct. -Sue