November 30, 2015

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SNL Kagan Releases New 10-Year Wireless Projections

In a just-released study, SNL Kagan estimates that 84% of the US population, including consumer, business and double users, will have mobile phones by the end of 2007, with this percentage surging past 100% by 2013.

SNL Kagan's research also shows that US cell phone subscriptions will grow at a rate of about 3% per year over the next decade versus total population growth of only 1%, despite decreasing net additions as 100% penetration is approached. These projections anticipate increased data use, including text, Web and video, which could be accelerated by new player business models where multimedia services get partially subsidized by advertising, similar to the approaches just starting to be tested by Google, YouTube and others.

SNL Kagan expects total industry average revenue per user (ARPU) to grow at an inflation-paced compound annual growth rate of 1.5% over the next 10 years, from $52.38 today to $61.09 by 2017. Industry hopes run much higher for data ARPU, which is already in the high single digits and grew a significant 45% from the first quarter of 2006 to the first quarter of 2007 from $5.92 to $8.58.

"If carriers can hold onto their position in the revenue chain, data is poised to give them a second growth spurt," says SNL Kagan senior analyst Sharon Armbrust. "While subscriber units and voice revenue will inch along, we expect data revenue to grow at a compound annual 14% rate over the next 10 years, rising to at least 22% of service revenue, compared to under 10% today."

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