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Is the Mobile Data Gambit Finally Paying Off For Carriers?

According to a new study by Forrester Research, not really. Only 44% of wireless subscribers are using some type of data service. While this shows that mobile data usage is becoming more commonplace, the bad news is that the bulk of it comes from text messaging rather than ring tone downloads or mobile Internet surfing. In fact, a majority of consumers fail to see the value of
April 17, 2007
According to a new study by Forrester Research, not really. Only 44% of wireless subscribers are using some type of data service. While this shows that mobile data usage is becoming more commonplace, the bad news is that the bulk of it comes from text messaging rather than ring tone downloads or mobile Internet surfing. In fact, a majority of consumers fail to see the value of mobile data services.I can see the wireless company CEOs pulling their hair out over that one. The Forrester study goes on to say that most people think wireless data services are "nice to have" but certainly not necessary. Combined, the major wireless carriers in the U.S. have spent tens of billions of dollars installing and upgrading 3G wireless data networks. Has it all been for naught?

What's disconcerting here is that wireless data is not new. Text messaging and even the most rudimentary forms of the mobile Internet have been around for years and years. Even so, only 35% of consumers use text messaging, only 18% send or receive picture messages, and an abysmal 11% surf the mobile Web. The percentage of subscribers who've downloaded music or videos to their phones is even lower.

I am the first to admit that the mobile Web can be frustrating at times and certainly doesn't compare to the desktop experience. But I think a shift in thinking is necessary. We can't think of the mobile Web in the same way that we think about the standard Web. They are two different animals. Approaching the mobile Web with the expectation that it will be like browsing on a regular PC will only lead to disappointment.

So, how do we change peoples' thinking about the mobile Web and data usage?

Innovative companies, like Google, are working on it. As more and more offerings are designed specifically for mobile phones (and provide good services/experiences), general adoption will follow. But it's slow going.

In the mean time, wireless carriers have to worry about recouping their massive investments. Carriers hoped that mobile data usage would lead to an increase in ARPU. While there has been growth (e.g., Verizon Wireless's data revenue jumped 16% in 2006), the increases haven't offset the loss of voice revenue.

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