PwC's 2011 North American wireless industry survey provides an understanding of current and emerging trends in the communications sector and addresses general financial accounting and reporting policies and practices of wireless telecommunications service providers. It will help your business identify and shape changes in the wireless marketplace.
Smartphone device sales, users, and revenues are accelerating across the board. The sale of smartphone devices to new postpaid subscribers continues to grow, representing 48% of device sales as compared with 30% in the 2010 survey. The number of total postpaid subscribers using a smartphone also grew to 37%, up 15% from the prior year. Given the data service component for smartphone plans, the average service revenue per user remains significantly higher than the average revenue per user for postpaid customers, at $83 in the 2011 survey.
Prepaid plans continue to represent a significant and growing portion of carrier revenues as consumers opt for less expensive, no-commitment wireless plans. Prepaid services now represent an average of 29.2% of total service revenues, up from 22.5% in the 2010 survey. The significant growth in the prepaid subscriber base is thought to be attributable to the combination of a maturing market, with mobile subscriber penetration recently nearing 100%, and recessionary consumer purchasing behaviors, which have evolved toward mobile services that allow more careful control of spending.
As the demand of subscribers continues the shift toward data-intensive services and the speed of data delivery becomes even more important, wireless operators are investing in significant capital improvements. Capital expenditures averaged approximately 24% of service revenue, an increase over the 20% of the 2010 survey. The year also saw accelerated depreciation and impairments believed to be the result in part of ongoing network upgrades to 4G technologies, accelerating the retirement of legacy 2G and 3G network assets.