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8/10/2009
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Mobile Data Revenue Hits $10.6 Billion

Growth in mobile data service indicates the worst of the recession may be over for U.S. wireless carriers.

The U.S. wireless data market hit $10.6 billion in service revenue for the second quarter, according to a report by Chetan Sharma.

The report, "U.S. Wireless Data Market Update," said the revenue represents 30% year-over-year growth, and it is the second straight quarter where revenue exceeded $10 billion. While the global economic recession is expected to hurt the sales of cell phones this year, the report said the growth trends in mobile data indicate the worst may be over for U.S. wireless carriers.

"In summary, the recession has been all but a tiny blip in its growth trend and the U.S. mobile market has weathered the downward spiral in economy better than its counterparts in other developed nations," the report said. "Of course, recession doesn't treat all players equally, so some have had a negative impact and will need more resources and effective strategies to claw back to their previous market position."

AT&T and Verizon Wireless both had mobile data growth rates of over 8%. T-Mobile had a 6% growth rate thanks to its growing 3G network and handsets like the T-Mobile G1 and myTouch 3G. AT&T has a strong portfolio of smartphones including the BlackBerry Bold and the popular iPhone 3GS, and the carrier has twice as many smartphone users as its rivals.

Sprint Nextel is not attracting as many high-end smartphone users as its rivals, but the third-largest U.S. carrier is seeing strong uptake of its mobile data cards, and devices like the MiFi that use a 3G connection to create a portable Wi-Fi cloud. Additionally, the mobile operator is seeing success renting excess network capacity for devices like the Kindle electronic book reader.

The report also said the increased use of smartphones and data cards is putting more pressure on wireless operators to accelerate their strategies to deploy the next generation of mobile data networks. Sprint and Clearwire are already rolling out WiMax networks in multiple markets, and Verizon has laid out an aggressive deployment schedule for its 4G network based on Long-Term Evolution technology.


LTE Vs. WiMax won't be the typical winner-take-all showdown. Learn what each brings to the race (registration required).

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