Monday, April 03, 2006

IDC: U.S. Wireless Providers to Focus On Business Subscribers as Total Voice Revenue Declines in 2008-2009

According to new research from IDC, "with the consumer wireless market approaching saturation, service providers will focus on the business market and its attractively high voice average revenue per user (ARPU) and still early-stage adoption of data as primary growth drivers. Business revenue is expected to grow from $29 billion in 2005 to $52 billion in 2010."

The report predicts "the wireless industry will be impacted by numerous trends, including slowing subscriber growth, increased competition from MVNOs in the consumer space, evolution to a retail market model, voice ARPU erosion in both the business and consumer markets, and data pricing declines offset by growing data usage, especially in the business market."

IDC found that "wireless services are ideally suited to the business environment. Growth will be higher for businesses than for the overall market due to stronger subscriber growth rates within this segment. However, revenue growth rates will slow from 19% in 2006 to 3% in 2010 as subscriber growth rates slow and pricing erosions impact ARPU and revenue growth. As all industries become increasingly competitive and as companies look to differentiate themselves, incorporating wireless services into their communications and connectivity strategies provides businesses with numerous benefits."

Scott Ellison at IDC said, "Continued business subscriber growth will come from three strong trends: businesses finding new ways to use wireless to meet their communications and connectivity needs; business usage policies, such as wireless devices on master corporate contracts, that better manage wireless costs and for which non-business usage is explicitly forbidden or implicitly discouraged (such as no free night and weekend calling); and the growth of data services, such as email and laptop AirCard subscriptions."