Wireless Data Is Increasingly Important to Carriers

Growing adoption of smartphones and tablets along with ever-increasing wireless data speeds have led to a surge in mobile data traffic in the past few years. According to Cisco, wireless data traffic will continue to grow at an average rate of 78 percent until 2016.

While consumers are happy to use free services such as Skype, Facetime and iMessage on the go, carriers see their lucrative voice and messaging services disrupted and are forced to adjust their pricing models. AT&T and Verizon, America’s largest wireless carriers, have already abandoned unlimited data plans claiming their networks could no longer handle the demand of users on unlimited data plans.

The above chart shows Verizon’s wireless data revenue as a percentage of total wireless service revenue. In Q2 2012, wireless data accounted for 44 percent of Verizon’s wireless service revenue, up from 21 percent five years ago. We expect this number to grow even further in the near future, as wireless data is gradually replacing pricey voice and text message services.