Technology | Media | Telecommunications

Friday, October 18, 2013

Total Mobile Internet Revenue will Reach $400 Billion

Mobile internet access is the fastest growing offering for global network service providers. In all regions of the world there's typically one operator that pushes others to become more creative with there tariff pricing and related marketing efforts.

In its latest Mobile Internet Tariff Survey, ABI Research compares the data tariff of the least expensive 20 markets between the third quarter 2013 and the third quarter 2012, and has found that the average mobile Internet price has dropped by 17.7 percent.

"The decrease of data price was mainly driven by fierce competition and increased network capacity 4G roll-outs," said Marina Lu, research associate at ABI Research.

ABI estimates that 38 percent of the lowest priced data plans worldwide are 4G tariffs compared to 21 percent a year ago.

While mobile data subscriber pricing is on the decline, service provider data revenue has showed considerable growth due to continued strong adoption and usage of smartphones and increased data applications.

The total data revenue will reach $400 billion in 2013 with a Year-over-Year increase of 13.4 percent, and is forecast to grow to $527 billion, accounting for 47 percent of total service revenue in 2018.

In many markets, the access and the mobile data quota has become the principle unit of value for the customer. For example, in August 2013, TELUS, based in Canada, launched out new two-year SharePlus data plans—1GB/2GB/3GB of data for US$ 28.6/42.8/47.6 that can be shared among the residents of a household.

National calls to mobile and fixed-line numbers are free as is text messaging. While the tariff is a shared plan and voice calls and text are free, TELUS has been able to boost ARPU and overall service revenues in 2Q-2013. Operator AT&T, Rogers, and LG Telecom also benefit from similar tariff strategies.

Multi-device Shared Plans represented just 6 percent of tariff plans, but its share jumped 20 percent Quarter-over-Quarter. Service providers have been steering their customers away from Unlimited tariffs, which shrank QoQ to 12 percent of offerings.

Multiple Tiered Data Tariffs, where pricing varies on the amount of traffic sent, is still the most common model mobile network service providers offer to their customers (66 percent).