Mobile Internet is one of the fastest growing revenue segments for mobile operators across the world, driven by access fees and data traffic, according to ABI Research. While the economy caused mobile end-user average revenue per user (ARPU) to take a global nosedive in the fourth quarter of 2008, the North American market was spared thanks to the growth in smartphones and resulting mobile data usage.
According to ABI’s latest report on mobile subscriber ARPU, voice, messaging and data traffic, global mobile end-user ARPUs dropped between 5% and 15% year-over-year in Q4, and North America was the only market where year-over-year ARPU remained relatively stable. In China, India and a number of other Asian markets, it dropped more than 10%. In Europe, the contraction caused a fall of between 5% and 8%, while South American markets were mixed – some declined and some, including Brazil, held strong.
The decline was most acutely felt in Japan and Europe, where the combination of messaging and mobile Internet make up 38% and 25% to 30% of operator’s ARPU, respectively. Voice traffic, on the other hand, grew between 2% and 10% depending on the market, but the revenue-to-minute ratio continued to decline.
At the same time, Internet-related revenues grew between 15% and 25% year-over-year in Q4, and ABI expects them to continue along this vein even as the economic downturn persists. According to vice president Jake Saunders, this will be driven by consumer’s interest in improvements in work, personal productivity and organization. Consumers are also embracing mobile data apps like messaging, web browsing and game downloads, he said.
“There is money to be made from these services,” Saunders said in the report, “but operators need to manage traffic loads carefully. A maxed-out base-station can equate to thousands of dollars in lost revenue.”
The need to manage traffic loads is more acute as the ramp-up in mobile network traffic has been exponential over the last year. ABI expects the growth to continue this year too as operators roll out their 4G networks. Global terabits transferred per month is expected to expand 155% between 2008 and 2009 from 81,670 terabits to 31,720.
Internet applications like VoIP, instant messaging and SMSes through internet are obviously a major factor in the decline of ARPU