While mobile data average revenue per user is up in Europe and particularly the US, overall operators in both regions are realising that the growth in mobile data ARPU is contributing to the overall decline of total ARPU as users use data to circumvent call costs, for example.
Mobile broadband service has become increasingly competitive in recent years, according to a report by Strategy Analytics. Simultaneously, mobile data traffic has grown dramatically, reaching more than 25pc of total ARPU for many operators.
Some operators are actually seeing data’s share of total ARPU at more than 30pc.
Between 2006 and 2010, for selected mobile operators, overall ARPU is going down because although data traffic is growing, voice ARPU is declining by 23pc to 60pc.
Data is hurting total ARPU
Although total voice minutes have generally not declined, revenue per minute has dropped significantly – due in part to lower mobile termination rates.
“In the US, data ARPU has increased approximately 65pc. By contrast, data ARPU in Europe has increased only 10pc to 43pc. O2 Germany and Vodafone Spain have actually stimulated lower data ARPU to gain market share."
Despite the general increase, actual data prices per month are between one-quarter and two-thirds the value of voice service. As a result, the rapid growth in data traffic has contributed significantly to the decline in total ARPU,” commented Sue Rudd, director of Tariff and Revenue Strategies at Strategy Analytics.
“The change from voice and messaging to data and internet access has significantly diluted the monthly price per user. Marginal subscriber penetration and ‘trading down’ during the recession have further accelerated the decline in overall ARPU,” Rudd added.