The final tally for the third quarter of 2010 is in – and the news, if that will really be a surprise is that the demand for wireless data is on an upswing and seemingly endless, despite the new tiered pricing plans. According to Chetan Sharma, an analyst who tracks the wireless data industry, the US wireless data market grew 25 percent in third quarter 2010 versus third quarter of 2009. The market gained seven percent over second quarter of 2010 to hit about $ 14 billion.
And all that can be attributed to the brisk and seemingly unending demand for smartphones. In 2007, the year the iPhone was first brought to market, wireless data brought in about $ 25 billion for the mobile companies. Three years later, wireless data revenues would have doubled. The data ARPU at the time of the launch of iPhone was about $ 8 – now it has roughly doubled to about $ 16.7 a month. 
Sprint CEO Dan Hesse told me last month that by end of 2010, nearly half of Sprint’s subscriber base is going to using smartphones. T-Mobile CTO Neville Ray said that the new more powerful smartphones and faster networks are only going to push the wireless data consumption, perhaps to gigabyte-a-month levels relatively soon.
“By the end of 2010, we expect the average US consumption to be approximately 325 MB/mo up 112% from 2009,” Sharma predicts. According to his estimates, “the total US mobile data traffic will exceed 1 Exabyte for the first time by the end of 2010.” Exabyte, is a unit of information equal to 1000 petabytes or a billion gigabytes. In comparison, the global Internet traffic was estimated to be over 21 exabytes in March 2010.
Here are some wireless data highlights from the quarter:
- In Q3 2010, 47% of the devices sold in the US were smartphones compared to 24% globally.
- The US Wireless data service revenues grew 7% Q/Q to $ 14B in Q310.
- Verizon and AT&T accounted for 85% of the increase in data revenues in Q3 2010.
- Per month data (blended) ARPU – Sprint $ 18.7 (estimated), Verizon $ 18.61, AT&T $ 17.35, T-Mobile – $ 12 (estimated), average $ 16.7
- Nearly 21 percent of T-Mobile USA subscribers are on the smartphone.
- Data now accounts for about 33 percent of total ARPU for carriers in the US. Sharma predicts that in 2013, one should expect data and voice revenues to be roughly equal for the US carriers.
According to Sharma, the connected devices are going to be a major driver in the future. Already, devices such as the iPad are having a major impact. He predicts that in less than 5 years, “the connected devices category will generate more revenue for the operators than the entire prepaid segment in the US” which is a far cry from today when “connected devices represent only 3% of the quarterly data revenues.” No wonder folks like Hesse are all excited about the new Internet of things.
Related GigaOM Pro Content (sub req’d):
- Everybody Hertz: The Looming Spectrum Crisis
- The Internet of Things: What It Is, Why It Matters
- Mobile Broadband Pricing for Profits
- What Happens When Data Friendly Phones Come to Prepaid?
