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Dirty Little Secret about 3G Mobile Data ARPU

According to In-Stat's latest 3G deployment report, a total of 210 cellular carriers worldwide have either deployed 3G or will do so very shortly. In-Stat defined 3G as either CDMA2000 EVDO and above, or WCDMA and above.

Of these 210 cellular carriers, 68 are in Western Europe, 38 Eastern Europe, 19 in North America, 18 South America, 13 are in the Middle East and 54 are in the Asia Pacific.

When these 3G cellular carriers are taken together, it becomes very clear that 3G is available most places worldwide. So, 3G is definitely deployed, but is it really being used effectively? While the U.S. is not representative of many regions worldwide, it could be considered roughly middle-of-the-road in terms of technology usage.

Certainly the U.S. is way behind Korea or Japan, but ahead of many other regions. In the U.S., the major cellular carriers report that their ARPU is roughly $6-$7 per month for what they call "data applications."

However, carriers consider ring-tones and SMS messaging as data, but these services don't use or require 3G networks. So, if you divide out the ARPU from real "3G" data, such as videos and Internet access, the real total 3G ARPU drops to around $2 per month.

While 3G ARPU is higher in Western Europe, and Asia, it's also quite a bit lower in other regions like South America, India, and China, as examples. The point in discussing 3G ARPU is not to downplay the adoption of the technology, but rather to put things into perspective when talk starts to shift to 4G, WiMAX, and 802.20 technology.

For these new technologies to be used, there must be subscriber demand, and with the track-record of 3G as an indication, these subscribers might be hard to attain. Clearly, 3G has had great success in Asia, but even there, WiBRO, the Korean version of WiMAX, has struggled to gain subscribers.

In the U.S., 3G has had limited success with a few MVNOs who have promoted video content above all else. For example, Amp'd Mobile has a small following of young people that download and watch short video clips designed just for that audience on a mobile device-sized screen. But as an example of how niche-oriented this market can be, ESPN Mobile failed at its attempt to reach a very similar audience.

And what about 4G, WiMAX, and 802.20? How do they play into this? In-Stat believes that the numerous versions of this very question will be prevalent at the biggest mobile service provider trade show in the U.S., the CTIA Show in Orlando.

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