Strategy Analytics: Mobile ARPU Declining Across Europe and US

Analyzing Components of Mobile ARPU

BOSTON--(EON: Enhanced Online News)--Mobile broadband service has become increasingly competitive in recent years. Simultaneously, mobile data traffic has grown dramatically, reaching over 25 percent of total ARPU for many operators. Some operators are actually seeing data’s share of total ARPU at over 30 percent.

“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.”

The Strategy Analytics Tariff and Revenue Strategies (TRS) Insight, “Why is Mobile ARPU Declining?” analyzes the impact of these trends in six countries, France, Germany, Italy, Spain, UK and USA, identifying key factors that drive the decline in ARPU. Between 2006 and 2010, for selected mobile operators, overall ARPU is going down because although data traffic is growing, voice ARPU is declining by 23% to 60%. 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 65%. By contrast data ARPU in Europe has increased only 10% to 43%. –And new entrants in some markets - 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, TRS. “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.”

Highlights of the full report are summarized in the complimentary Executive Summary.

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Strategy Analytics, Inc. provides timely and actionable market intelligence focused on opportunities and disruptive forces in Broadband, Mobile & Wireless Communications. Headquartered in Boston, MA, with offices in the UK, France, Germany, Japan, S. Korea and China, Strategy Analytics works with clients through annual multi-client services, management team workshops and custom consulting engagements. For more information, please visit http://www.strategyanalytics.com/