Report: U.S. Mobile Data Service Revenues Top $10 Billion in Q1

Supplying hard data to capture industry trends such as the rising popularity of smartphones and use of text-messaging as a mainstream means of communications, an Issaquah, Washington-based technology consulting firm is reporting that the market for U.S. wireless data grew 5 percent sequentially for the first quarter and 32 percent year-over-year, topping $10 billion in mobile data service revenues.

 

Officials at Chetan Sharma Consulting – including the company’s founder and president, for whom it’s named – say data revenues, especially among major carriers, signal the end of the worst for the mobile industry in this down economy.

 

“In summary, the recession has been all but a tiny blip (from the service revenue perspective) in its growth trend and the U.S. mobile market has weathered the downward spiral in economy better than its counterparts in other developing nations,” the firm reports.

 

The firm – led by Chetan Sharma himself (pictured below) – also reports that U.S. subscription penetration surpassed 90 percent, meaning that while the wireless infrastructure and handset segments have hurt, “consumers haven’t really pulled back on the mobile data overall spending.”

 

“Additionally, the CAPEX spending will stay strong in 2009 given the activity around 3G/4G deployments and trials,” the firm reports. “As expected, the data card subscriptions were hit the hardest and there was an increase of prepaid subscribers which dropped the overall revenues for some of the carriers.”

 

The comments mark the latest in a series of positive outlooks from analysts for the wireless industry in 2009.

 

For a few months, now, analysts have been calling for flexible open source platforms to fuel sales of smartphones, which some say will double their share of the entire cell phone market by 2013. That’s excellent news for companies such as Rogers Wireless (News - Alert), which last week became Canada’s exclusive carrier for two Google Android (News - Alert)-based devices.

 

Just this week, IT market research firm Strategy Analytics called for global Android smartphone shipments to grow 900 percent this year. Officials at that firm say support from developers, vendors and operators is driving adoption of the open source devices.

 

Chetan Sharma says the industry’s success is closely tied to the overall economy – a noteworthy fact but one that’s not surprising, given how heavily wireless relies on consumer spending.

 

“As the consumer sentiment improved over the last couple of months along with better than expected Q1 2009 earnings from corporations, the mobile industry seems to be back on track,” the firm reports. “While the structural flaws in various industry segments remain, and the economy is a crisis away from the double dip, the outlook for the remainder of 2009 remains bright and we are expecting the overall data revenues to now increase by 24 percent compared to 2008.”