Interesting Numbers from the Top Ten U.S. Wireless Service Providers
Kristen Beckman from RCR Wireless News has posted a great table listing the top 10 U.S. wireless service providers. She includes a breakdown of total subscriber base, net additions and the % total churn. But the part that I found most interesting is the ARPU or average revenue per user for both standard users and for data users. This same data is available in these companies annual reports, but looking at the values side by side really makes you see the bigger picture. The numbers are really scary if you are a wireless provider. In general, the voice customer is paying 5x the amount the data user is (about $50 vs. $10). But as we all know, it all becomes digital data at some point. Services like Skype make that all too clear.
It is understandable looking at these numbers that the phone companies do not want to become “dumb pipes” for digital data. They own the networks and so far have been able to set their own rules that everyone else has to follow. Even giants like Apple and Google have to play by their rules when all is said and done. But what will the future bring?
Right now, most customers would prefer the 1x price with less customer service because they don’t feel like they are getting service that is as good as the 4x premium that they are paying. The real question is whether the phone companies could even afford to become dumb pipes and still maintain and improve their networks. For those you automatically say that they can and point to the current landline plant, you need to remember that much of the cost of installing that old plant was the higher prices people paid to the old AT&T while it was allowed to be a legal monopoly.
Also some cost that the wireless companies have to pay include the cost of billions of dollars for wireless spectrum, even before they can put up towers and sell phones and contracts to customers. Could they afford all of this by only charging their customers 1x or 2x per month? Wireless companies are doing OK, but their margins are nothing like those of Apple or Google.
Technorati tags: ARPU, dumb pipes, top ten US wireless service providers
Tags: ARPU, dumb pipes, top ten US wireless service providers
May 20th, 2008 at 2:17 pm
[...] I have to disagree with the assumption on what the carrier would be able to charge their customers. As I have discussed previously, the carriers make their money on charging lots of money for voice. They can’t charge much [...]