A greater volume of IoT products in US operators’ device mix is putting added pressure on monthly customer revenues.
Chetan Sharma Consulting’s latest US Mobile Market update (covering Q3 2017) noted continued industry declines in average revenue per user (ARPU) are being driven primarily by “competitive intensity”. But the proliferation of IoT devices on operator networks is also proving to be a drag on ARPU figures.
The consultancy’s founder and CEO Chetan Sharma observed ARPU was down year-over-year at all four major US operators during the recent quarter.
“Overall ARPU continues to decline partly because of the device mix which is now including IoT [devices] that tend to be low ARPU albeit highly profitable subscriptions,” Sharma wrote.
While AT&T led the competition in Q3 connected car net additions, he noted Verizon “continued its steady march on the IoT/telematics front” and is pushing toward a $1 billion business in that space in 2018.
Data use takes a toll
As in his 2Q market update, Sharma reiterated mobile data consumption continues to rise in the US, with average monthly data use per consumer likely to cross the 6GB mark by the end of 2017.
The US already leads the world in total Zettabytes consumed on mobile networks, but is currently third – behind Finland and Korea – in terms of average monthly consumption per subscriber.
It appears the rapid increase in data usage is taking a toll on 4G networks across the globe.
In August, OpenSignal reported network speeds at Verizon and AT&T actually dipped following the reintroduction of unlimited tariffs. OpenSignal’s global State of LTE report released 1 November indicates the average download speed in the US is now 13.98Mb/s.
The latter report also notes speed gains have slowed worldwide.