ARPUs continue to fall globally as mobile voice nears saturation

Mobile end user average revenue per user (ARPU) has dropped between 6% to 9% globally year on year in the third quarter of 2009, compared to the same quarter in 2008, according to ABI Research.

ABI Research said India, the world’s second largest market in terms of subscribers, saw ARPUs dropping more than 10% year on year in the same period, as new operators and the introduction of per-second billing put heavy downward pressure on voice revenues.

In Europe the ARPU contraction was in the range of -5% to -8%, with Austria seeing a contraction of more than 9%. However, ABI Research estimates that ARPU decline is likely to flatten out in developed markets in Europe and North America as mobile data revenue increasingly replaces falling voice revenue.

Globally, the growth in minutes of use has also peaked, and is expected to grow at a CAGR of only 1.4% between 2009 and 2015. Much of this growth is driven by developing markets in Africa, Asia, and the Middle East.

“With the decline in voice revenues, mobile operators must aim to increase the uptake of mobile Internet services and revenues to defend their ARPU,” said ABI Research analyst, Bhavya Khanna.

“Mobile data traffic has exploded in the past two years, and is expected to expand at a compound annual growth rate (CAGR) of over 40% from 2009-2015. Operators can cash in on this demand by enlarging their mobile broadband coverage, thus increasing their user base. This has started to happen in developed markets such as the UK and US, where mobile Internet service revenues have grown over 12% and 8% year on year, respectively.”