Poor Demand for Mobile Video Could Slow Wireless Advancements

This could be bad news for enterprise cellular data customers because low demand discourages carriers from improving system performance and capacity, and inhibits the development of more sophisticated mobile devices. Although enterprise customers represent a significant slice of carrier revenue, consumer demand drives industry profits and capital investments. Carriers view video services as an important element in their efforts to increase ARPU (average revenue per user), a financial metric that gains importance as the cellular market approaches saturation. Large consumer markets also drive innovation among mobile device manufacturers.

Despite the disappointing figures on usage and demand, In-Stat estimates that more than 30 million U.S. subscribers will buy mobile video content by 2010. That could be enough to stimulate needed investment among service and equipment providers--and make broadband wireless services more affordable for both consumers and enterprises.