Wireless Data Revenues Top $4 Billion in 2004

The Yankee Group projects the market will reach $14 billion by 2008.


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Posted December 29, 2004

Rob McGann

By the end of Q2, 2004, the number of wireless data users in the U.S. totaled almost 47 million, over a quarter of the total number of wireless subscribers, according to carrier reporting and the Yankee Group's "2004 Mobile User Survey."

The figure represents a 58 percent increase over the 29 million wireless data users at the end of the same period in 2003.

"We finally have left the realm of hope, and encountered the certainty that wireless data is growing significantly," said Roger Entner, Yankee Group's director of wireless mobile U.S. "The growth metrics paint a compelling picture."

The study found in Q2 2004, the average wireless user spent $2/month on wireless data services, compared to an average $1/month in the same period a year earlier. For their part, average wireless data customers spent $5/month on such services in the second quarter of 2004, compared to the $4/month figure measured midway through 2003.

Wireless data revenues, meanwhile, approached $1 billion in the second quarter of 2004, a 160 percent increase over the $367 million measured in the second quarter of 2003. For the year, Yankee Group expects a third of wireless subscribers will be wireless data users, and overall wireless data revenue for the year will surpass $4 billion.

In addition to those hard growth figures, the number of wireless users likely to become wireless data customers also appears to be on the rise. Nearly 75 percent of respondents to the 2004 wireless survey said if they had an additional $5 - $10 in disposable income to spend on wireless data, they'd be willing to spend it.

The researchers calculate the wireless data services market will grow to approximately $14 billion by 2008.

While that growth is significant, total wireless data revenues this year constitute a mere 4 percent of total wireless service revenues, or "virtually a rounding error for most carriers," according to the report.

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