Mobility Now Drives Service Provider Global Financial Results

By Gary Kim May 01, 2012

One reason why mobile services are so important for global service provider executives is that mobile revenue now represents the revenue growth driver for the global telecom services business. Quite simply, fixed line voice revenue is declining, while mobile revenue, fixed line broadband access and video entertainment revenues are growing.

Of those sources, mobile revenues are the largest drivers of industry performance. Consider that U.S. wireless revenue in 2012 will be about $335 billion, while fixed network voice revenue will be about $132 billion, with an additional $38 billion in broadband access revenue and $6 billion in television revenue.

Income totals about $176 billion in fixed network revenue, according to the Telecommunications Industry Association.

Wireless is already the biggest revenue contributor, and though broadband access and video entertainment are growing revenue sources for telcos, neither compared in revenue magnitude to wireless revenues.

Wireless also is leading global industry growth. The global mobile industry will earn about $1.5 trillion in 2012, with mobile data representing 28 percent of total revenue, according to analyst Chetan Sharma.

Global mobile data revenues eclipsed $300 billion for the first time in 2011, the first year in which non-messaging data revenues comprised the majority of the overall global data revenues at 53 percent.

At the end of 2011, global mobile subscriptions exceeded six billion. Primary growth drivers are India and China, which collectively add 75 million new subscribers every quarter.

Globally, about 63 percent of all revenue, from all sources, is driven by wireless. About 25 percent of total revenue is produced by fixed line voice services. Fixed network broadband produces about 10 percent of total revenue, and IPTV is about one percent of total revenue.

Matters are not so different in the U.S. market, in which wireless revenue in 2012 will be about $335 billion, while fixed network voice revenue will be about $132 billion, with an additional $38 billion in broadband access revenue and $6 billion in television revenue. Total reaches about $176 billion in fixed network revenue.

So in the U.S. market, wireless now is 66 percent of total revenue; all fixed network services just a third. The point is that no revenue source other than mobile has the potential to dramatically affect industry earnings, either globally or in the United States.

The latest study by Chetan Sharma shows impressive mobile growth, and also shows why mobility is the single most-important determinant of industry growth over the near term. For U.S. consumers, nearly half of all household spending on recurring communications services goes for wireless services. 

Broadband access is approaching about 35 percent of spending. Entertainment video spending is approaching 25 percent of total, while residential voice continues to drop, heading for a level representing about 25 percent of total spending.

Edited by Braden Becker

Contributing Editor

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