Is ARPU Really Good For Business Users Or The Wireless Industry?

According to the latest findings from Analysys, carriers in Western Europe have seen their overall ARPU (average revenue per user) drop because of decreasing revenue from voice. Is it time for the carriers and Wall Street to abandon this model?Analysys claims that carriers might be able to eventually stop the decline in ARPU by 2011, if they can manage to grow their data revenues as well:

While I am a big fan of fixed-mobile convergence, I don't know if it will be enough to save the carriers and their current business model.

ARPU as a model has been a big reason wireless carriers have not embraced change. It's the primary reason carriers love to trap their customers with long contracts and ARPU is the reason carriers have tried to control all aspects of the mobile market, from devices to content to the mobile Web. While carriers in Europe and Asia have been more flexible than their American counterparts, the end result of this model has been a market that has failed to really innovate.

Look at the iPhone. Apple managed to create more change in the U.S. wireless market in just nine months than the rest of the industry has in three years. Americans are genuinely interested in smartphones as a result of the iPhone. If the carriers were willing to open themselves to more devices and services -- and leave these devices and services to the people who actually know how to build and market them -- we might actually see the real potential of 3G.

Let's face it, most of the developed wireless markets in North America, Europe, and parts of Asia are now saturated. The ARPU model as it is currently structured has taken the carriers in these markets as far as it can.

The current ARPU model has, either directly or indirectly, contributed to the carriers' policy of closed networks. This insistence on closed network architecture has been bad for the wireless industry and it has been bad for enterprises and smaller businesses looking to leverage mobility in their organizations.

Google and other leading technologists want to end this system and open up the wireless industry. In order for open network access to work, though, the carriers and Wall Street need to abandon their ARPU model. Unless they do this, the carriers will be forced to do two things at once. They'll have to fight to slow down the trend to openness while desperately trying to control newer IP-based technologies like fixed-mobile convergence. The whole appeal of FMC, however, is that it promises to reduce telecom expenses for business users and consumers. If the carriers keep their hands on it, though, it will never take off.

It's time the carriers face this and learn how to disrupt themselves. Otherwise, they could stand around and watch while Google buys spectrum and starts to use it to pry open those networks.

What do you think? Is ARPU killing the wireless industry? Can fixed-mobile convergence really save the carriers? Or do they need to face the music?