A eulogy to ARPU

Rob Chimsky
Guavus
ARPU has long been the benchmark metric in the wireless industry, spelling the gain or loss of an operator’s fortunes. However, the rise of data traffic as the growth engine has made ARPU increasingly irrelevant as a measure.
 
Several forces are now coming to critical mass that will likely seal the fate of the ARPU metric and the philosophy of what constitutes the success that it embodies. 
 
In the US for example, the fourth quarter of 2013 marked a significant milestone in the transition from voice to data, when the mobile sector started to earn more from data than from voice. From now, data will be the growth driver for the industry.
 
The obvious changes that have occurred are the significant growth in data as the primary driver of operator revenue and the increasing prevalence of prepaid services, even in markets that were historically postpaid focused.
 
Perhaps an even more important trend related to revenue, though not quite as obvious, has been the extreme growth in embedded wireless. Mature markets today are seeing over 100% penetration, a clear indicator of the trend toward people carrying multiple wireless devices. Current road warriors are armed with at least three wireless devices - cell phones, tablets, and laptops.
 
This trend will progressively reach more mainstream consumers as everyday products are becoming wirelessly enabled, such as e-readers, MP3 players, GPS devices, and cameras, with more devices likely to be added to this category in the future. Each of these devices also comes with somewhat different wireless revenue plans and pricing models, representing different business relationships between the user and the operator.
 

Pages

Commentary

5G and data center-friendly network architectures

Matt Walker / MTN Consulting

Webscale and transmission network operators' interests are aligning as the 5G era dawns

Matt Walker / MTN Consulting

Webscale and transmission network operators' interests are aligning as the 5G era dawns

Rémy Pascal / Analysys Mason

The launch of 5G by South Korean operators serves as a first benchmark for other operators around the world