Consumer apps take over lead from BlackBerry in data revenue: Rogers

Consumer applications and services now make up the bulk of Rogers Wireless Inc.’s wireless data services revenue, company executives noted during its recent first-quarter 2005 financial results conference call. Previously dominated by revenue generated from BlackBerry users, Rogers Wireless said that consumer applications have begun to pick up steam, generating a greater share of wireless data revenue than that derived from BlackBerry usage. The BlackBerry continues to be a healthy business because the devices can be used around the world, but the trend of BlackBerry usage generating a greater share of data revenue is reversing. The overall wireless data portfolio continues to be strong and two years ago the BlackBerry would have been described as "the anchor of that portfolio," Rob Bruce, executive VP, chief marketing officer and president wireless data, said. That is no longer the case, he added. "I think what has happened is a fundamental shift of where we’ve moved from being about 60-40 business to actually 60-40 consumer as we’ve seen a massive growth in both SMS and wireless Internet – those two components now being much more sizable than the BlackBerry business and continuing to grow," he said. An inflection point seems to have been achieved where it will be the mass consumer market generating the lion’s share of wireless data revenue going forward. It’s too early to tell whether this is a trend that Bell Mobility and Telus Mobility are experiencing and more will become known when they release their financial results in the coming weeks. However, with approximately half of all new net additions coming from the youth category, it should come as no surprise that this will be the new trend in wireless data services revenue generation. The Canadian wireless operators have been criticized in the past for lagging behind their American, European and Asian counterparts in terms of wireless data adoption. European wireless operators routinely report data revenue in the "teens" in terms of a percentage of overall per subscriber revenue. Canadian carriers are catching up as the data percentage of the average revenue per user (ARPU) continues to increase for all operators. Rogers Wireless reported that wireless data made up about 7% of ARPU, coming primarily from BlackBerry usage, SMS, ringtones, games and other services and applications. This represents an 80% increase year-over-year in wireless data ARPU, which only accounted for about 4.9% in last year’s first quarter. The company expects to generate about 10% of wireless services revenue from data services by the end of this year. Despite the general increase in ARPU, there could be downward pressure on revenue per subscriber, noted president and CEO Nadir Mohamed. Offsetting strong ARPU growth could be the addition of lower-revenue generating subscribers as penetration increases and prepaid customers become a larger part of the subscriber mix. Overall, the future looks bright for wireless ARPU. The introduction of new services such as TV to the handset and inter-carrier Wi-Fi, combined with the ongoing increases in ringtone downloads, games usage, SMS and emerging multimedia messaging services (MMS) such as picture and video clip sharing should lead to higher per subscriber revenue in the future.

Consumer apps take over lead from BlackBerry in data revenue: Rogers

News | May 4, 2005

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