U.S. wireless revenue is up 7.6 percent for the year led by data messaging.  It isn’t news that the wireless industry has been growing or that data has been off-setting a slowdown in voice. What is striking is that data’s contribution to growth has been accelerating through the recession, while the voice slowdown has been steepening. 

This has surprised some analysts who expected people to tighten their budgets on “discretionary” data services such as text messaging while holding on to a core service such as phone voice services.  But the opposite has happened. What’s going on here?

1. Rapid technological advancements (better devices, applicatiions and networks) are powerful drivers of growth. Growth would be even stronger without the recession.
2.  To some degree, data messaging is substituting for voice services.
3. Voice markets are maturing.
4. Alternatives like Skype has some impact on voice
5. Price competition has been severe for voice while high-end data services are still commanding a premium price.

By the way this is a U.S. trend only.  Data show messaging growth much slower in Europe, Latin America and developing countries, while voice is still growing in places such as Asia, Latin America and Eastern Europe.

If you make the leap (and I think you can) that trends in wireless data growth would also correspond to growth in social media usage, this is how the world stacks up, by approximate two-year data usage growth trends:

• U.S.              12.7%
• Asia-Pacific        10.2%
• Latin America         8.2%
• Emerging Europe     8.7%
• Emerging Asia     7.9%
• Developed Europe    5.1%

Why is Europe lagging so significantly in wireless data usage?  Wouldn’t you think the same trends would apply? Any opinions?

*Illustration: Bank of America Securities-Merrill Lynch Global Wireless Matrix database

4 Comments

• 

  By Steve Dodd, December 15, 2009 @ 8:24 am

  @Mark – do you have any stats on Canada specifically?
  Regarding this conclusion, I’m not sure it’s all Social Media that is driving increased North American data usage. There are reports that suggest the largest consumers of wireless data are iPhone users. A lot of the iPhone data is music and other non text based applications. That being said, there is no question the usage of phone service is declining (especially in business) in the US. People do not answer phones the way they respond to other forms of electronic communications. I really don’t understand the significantly lower numbers in Europe and am looking forward to the comments from the other followers of {Grow}. As far as voice growth in Asia etc, I think it’s more of a cultural issue than an “either / or” discussion. Voice communications is still very important in some cultures.
• 

  By Joseph Fiore, December 15, 2009 @ 9:56 am

  On the voice side, there might still be more play on the statistics with the arrival of Google Talk on Droid and Android-based cell phones.

  Call me antiquarian, but I still prefer talking to people over the phone a lot more than exchanging emails. Text and tweets would come last, only after messages in a bottle or depending on the sun-glare of broken glass for basic communication survival.

  Joseph
  @RepuTrack
• 

  By Mark, December 15, 2009 @ 10:03 am

  @steve do not have Canada broken out.
• 

  By Neicole Crepeau, December 16, 2009 @ 1:16 pm

  While we older folks may prefer voice, the data shows that younger people defintely prefer texting. In fact, studies say they won’t listen to voice messages! The attitude is, if it’s important text me. They only move to voice when the conversation gets too complicated for texting.

  I am surprised regarding the international use, though. Could it be differences in the way sms is priced in other countries?

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