Voice ARPU down for Big Three, but Bell and Telus perform better on wireless data

The erosion of wireless voice revenue is now touching all of Canada's big three national wireless operators with Bell Mobility, Rogers Wireless and Telus Mobility all reporting declines in the voice portion of average revenue per user (ARPU). Bell reported a $1 decrease in post paid ARPU in the quarter compared to a year ago, attributing the decrease to voice APRU erosion as a result of competitive pricing from rivals as well as decreased usage. Telus also laid blame at increased pricing competition, but pointed to increased penetration at its discount brand Koodo and a slight decrease in roaming for its 2% slide in ARPU. For Rogers, lower roaming revenue, a decrease in out-of-bucket minute usage and a softening of long distance minutes lead to the 2% voice ARPU decline. The decreases in voice revenue is partially being offset by increases in revenue from data services, such as text messaging, email, downloads and mobile browsing. And while the increase in data revenue hasn't yet reached a level to make up for the shortfall in voice ARPU, the Big Three are all pushing hard on the data front. But as the fourth quarter and year-end results indicate, Bell and Telus were much better than Rogers. Reporting wireless data revenue as a percentage of overall ARPU for the first time, Bell said it grew 54% year over year to reach 15% of per subscriber revenue. Facing analysts publicly for the first time in about two years, George Cope, president and CEO said last week that over the past two years the company worked hard to reinvigorate its handset lineup which helped to close the gap with its rivals on the wireless data front. There is more to do, he said, pointing to the benefits of the HSPA network that the company's plans to roll out before the 2010 Vancouver Winter Olympics. For Telus, wireless data as a percentage of overall ARPU jumped from 12.5% at the end of 2007 to 18% at the end of last year, an increase of 55% year over year. Growth in wireless data is going to be driven primarily by increased penetration of 3G devices, the introduction of higher-bandwidth applications and the migration of users to smartphones. Rogers didn't perform as well as its rivals on the wireless data front with Q4 wireless data revenue growth reaching 36%. At the end of fiscal 2008, wireless data revenue represented 18% of overall ARPU up from 14% at the end of 2007. Rob Bruce, president of Rogers Wireless told analysts that the lower wireless data revenue growth can be attributed to the company's decision to reprice its data packages in advance of the iPhone launch in the third quarter. "We completely revolutionized our pricing on wireless data and while we experienced an acceleration in growth , we also saw significant reprice from our existing smartphone subscriber base," he said. Fourth Quarter and Year-End Subscriber Results Bell Mobility Fourth Quarter - 117,000 Year-End - 351,000 Rogers Wireless Fourth Quarter - 199,000 Year-End - 651,000 Telus Mobility Fourth Quarter - 148,000 Year-End - 589,000

Voice ARPU down for Big Three, but Bell and Telus perform better on wireless data

News | 02/19/2009 8:21 pm EST

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