Fewer US mobile users are paying a monthly bill

For the first time, postpaid subscriptions fell in the first quarter at the biggest U.S. carriers, Chetan Sharma Consulting said

Traditional mobile phone plans are now on the wane in the U.S., but the country's biggest carriers are still bringing in more money and leading the world in revenue, according to a report based on first-quarter results.

For the first time ever, U.S. mobile operators reported a net decline in postpaid subscribers, who sign up for ongoing service and pay a monthly bill, according to a report released Monday by Chetan Sharma Consulting. The seven major carriers together lost about 52,000 postpaid subscribers from 2011's fourth quarter to the first quarter of 2012, the report said.

The drop may have been partly seasonal because the first quarter is typically slow for postpaid subscriptions, said analyst Chetan Sharma, who wrote the report. But he cited two other reasons for the trend: Consumers have been shifting to prepaid, no-commitment deals because of economic hardships, and the carriers may have tapped out the supply of new mobile subscribers who can commit to a monthly bill. Sharma defines postpaid services broadly, as any plan in which a user pays monthly rather than buying a certain amount of service and "topping up" that supply when it's used up. Former postpaid subscribers may or may not come back when their fortunes improve, Sharma said.

Carriers have spent the past two decades bringing more U.S. consumers into the mobile world and competing among themselves for those new mobile users. But the U.S. market now has mobile penetration of 110 percent, if connections to non-phone devices such as tablets and industrial equipment are included. Most growth is now coming from non-traditional devices and revenue sources, Sharma said. Key among those are connected devices, which include tablets, laptops and personal hotspots, as well as industrial gear such as electric meters.

The U.S. mobile operators had no trouble racking up revenue gains in the quarter. For the top seven carriers, revenue grew 6 percent from the previous quarter and 21 percent from a year earlier, reaching US$18.7 billion, Sharma reported. Verizon and AT&T achieved the highest mobile carrier revenue in the world as AT&T jumped ahead of Japan's NTT DoCoMo to enter second place, according to the report.

Connected devices led year-over-year growth in the first quarter, rising 23 percent. Revenue from the major carriers' own prepaid services rose 15 percent, while money coming in from wholesale deals, primarily third-party prepaid carriers, increased 10 percent. Postpaid revenue growth was just 1 percent, Sharma reported. Many postpaid customers have left for prepaid plans, which don't require a long-term commitment, and they may never return, he said. To keep making more money from their postpaid users, which still make up about 66 percent of all customers, the operators are selling phone and service upgrades and getting non-data users to adopt mobile data plans.

Another big change is probably coming soon, with "family" data plans that allow multiple devices and users to share one monthly allotment of data. Sharma expects the major carriers to announce such plans in the next few weeks or months. Pooled data plans could make it easier and, in some cases, less expensive to use mobile data.

Data services will remain the driver of mobile growth, as data traffic in bytes has doubled annually for eight years and should double again in 2012, according to Sharma. An average subscriber's data use is approaching 1 gigabyte per month for some carriers. That growth has led to data making up more than 85 percent of all mobile traffic in the U.S., Sharma said. Data also drives revenue: Data plans surpassed 40 percent of the carriers' revenue in the first quarter and are likely to represent the majority of revenue next year, he said.

Meanwhile, the ongoing adoption of mobile is also eating into landline voice subscriptions. One-third of U.S. consumers, more than 100 million mobile subscribers in the first quarter, don't have landline phones, according to the report.

Stephen Lawson covers mobile, storage and networking technologies for The IDG News Service. Follow Stephen on Twitter at @sdlawsonmedia. Stephen's e-mail address is stephen_lawson@idg.com

Join the newsletter!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Stephen Lawson

IDG News Service
Show Comments

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Ben Ramsden

Sharp PN-40TC1 Huddle Board

Brainstorming, innovation, problem solving, and negotiation have all become much more productive and valuable if people can easily collaborate in real time with minimal friction.

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Ratchada Dunn

Sharp PN-40TC1 Huddle Board

The Huddle Board’s built in program; Sharp Touch Viewing software allows us to easily manipulate and edit our documents (jpegs and PDFs) all at the same time on the dashboard.

George Khoury

Sharp PN-40TC1 Huddle Board

The biggest perks for me would be that it comes with easy to use and comprehensive programs that make the collaboration process a whole lot more intuitive and organic

David Coyle

Brother PocketJet PJ-773 A4 Portable Thermal Printer

I rate the printer as a 5 out of 5 stars as it has been able to fit seamlessly into my busy and mobile lifestyle.

Kurt Hegetschweiler

Brother PocketJet PJ-773 A4 Portable Thermal Printer

It’s perfect for mobile workers. Just take it out — it’s small enough to sit anywhere — turn it on, load a sheet of paper, and start printing.

Featured Content

Product Launch Showcase

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?