Will Cell Phone Rates Start Rising in 2006?

by Todd Ogasawara

According to one report the average revenue per user (ARPU) for cellular voice services in the US dropped for the second quarter in a row. Data service revenue is not making up for the ARPU drop on the voice side.

Mobile Pipeline: Cellular Voice Revenues Fall, Data Doesn't Close Gap

How long will the wireless carriers let this go on before they consider raising rates?
They're certainly out there trying to stir up the revenue stream by introducing services like music downloads, ring tone rentals, and streaming video.

The rise in text messaging and increasing availability of WiFi hotspots (free or fee) for email and instant messaging has reduced the need for voice calls for many of us. My phone, for example, has GSM (voice), GPRS (slow carrier data), Bluetooth (for local data), and 802.11b WiFi in one relatively small box. Some carriers have apparently crippled various non-carrier communication like Bluetooth (headset only) or WiFi (turns off phone when WiFi in use). But, I'll guess that the more aware customers will vote with their feet and head over to a carrier that doesn't reduce their wireless options.

In the past few years we've seen cell phone use reduce wired phone revenue for the wireline phone companies.
Will WiFi, mesh networks, and WiMax do the same to the cellular phone companies?
Note to cell phone companies.
In the 19th century Western Union stuck with the telegraph and ignored the telephone.
Where's Western Union today in the scheme of things?

What do you think? Will cell phone firms raise voice rates in 2006? Are VoIP phone firms the future?


2005-12-16 04:12:54
Maybe carriers in the US ought to think more about what other useful things people could do with their mobile data terminals.

And maybe the rest of us ought to also be thinking about what we can develop applications that do those things.

I reckon there are a great many things that people would like to be able to do with the mobile handsets -- things they would be glad to have access to from their handsets, if it were provided.