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Smartphones Drive Data Usage, Not Revenues

Mobile data usage continues to grow exponentially as 3G wireless network technology spreads globally, according the the latest market study by ABI Research.

From 2009 to 2015 data usage in Western Europe and North America is expected to increase at a compound annual growth rate (CAGR) of 42 percent and 55 percent respectively.

In 2010, the average North American user is expected to consume 159 megabytes of data -- that's up from 100 megabytes in 2009.

"Mobile voice has already been surpassed by mobile data traffic on some networks, and this trend will only accelerate, says ABI Research wireless analyst Bhavya Khanna. "This boom in usage is driven by the rapid adoption of smartphones in these markets."

However, the explosion in data traffic does not mean a corresponding rise in data revenues for mobile service providers, as the popularity of unlimited or fixed price plans caps revenue even as usage grows.

Mobile data revenues are expected to grow at a CAGR of about 18 percent in North America, in sharp contrast to the increase in usage. This presents a challenge for operators as they look to manage the demands on their networks without a corresponding increase in income.

The growth in data traffic comes at the cost of voice usage. Minutes of use are on the decline in developed markets in North America and Western Europe. However, in emerging markets there is still room for voice usage growth.

Increasing competition in Africa has reduced tariffs, resulting in minutes of use per user growing by 9 percent between 2009 and 2010. There is still much room for growth on the continent, as average usage per subscriber continues to be half of that of the Asia-Pacific region.

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