Data packages bring in billions for telecoms - Snapchat, Instagram drive subscriptions among
Published:Tuesday | June 7, 2016 | 12:00 AMSteven Jackson
Mobile applications led by Instagram and Snapchat are fuelling local Internet revenues, which rose beyond $4 billion in the review quarter, or 153 per cent higher year on year, according to newly released regulatory data.
Internet revenue, which includes mobile and fixed broadband, is growing the fastest of all business segments at telecom providers, according to data released on Monday by the Office of Utilities Regulation (OUR).
Teenagers and young adults - millennials - use these apps daily, and telecoms are monetising their habits. The growth has offset slowing revenues from mobile and fixed line calls.
"We are looking for the explosion of Snapchat now because that is a data driver," Cable & Wireless Jamaica Garfield Sinclair told Wednesday Business even before the release of the OUR report.
"But even without Snapchat, the growth of mobile data adoption by the average Jamaican is phenomenal," he said.
It means that Internet revenues now officially account for the second-highest earning service for telecom providers, according to the Telecommunications Market Information Report released on Monday for the period ending June 2015.
Telecoms earned $19.9 billion in total revenues split across voice mobile, fixed and internet segments for the 2015 second quarter, or one-third higher year on year.
GOOD FOR BUSINESS
The revenues can be disaggregated with voice mobile at $13.3 billion, up 14 per cent year on year; IUnternet at $4.2 billion, up 153 per cent year on year; and fixed line at $2.4 billion or 12 per cent higher year on year.
"Instagram is the most popular app and it's getting caught up by Snapchat. Millennials are all into Snapchat, which is another data driver. All of these data drivers are good for business," said Sinclair.
"Snapchat is where they are all going. It's no longer a picture anymore or a little video. Now you can create running vignettes now to showcase a week of activity."
Snapchat an image and video messaging app was created four years ago by then Stanford University students Evan Spiegel, Bobby Murphy, and Reggie Brown. Other apps like Twitter, Whatsapp and even Facebook are mainly text-driven. That translates to far less mobile data use and consequently fewer data plan purchases. While Snapchat and other apps that encourage 'selfies', such as Instagram and Tumblr, drive heavy photo and video usage.
C&WJ recently increased its data bundles which resulted in the cheapest plans increasing from $50 to $75 with an equivalent increase in data. The core product increased from $100 to $150. Sinclair explained that the telecom increased the plans to keep up with the pace at which people consumed data.
"We are finding that people want more data per purchase. They are doing more with data and engaging more with social media," he said, adding that the internal numbers suggest that the increased price has not constrained demand for the service.
"We are finding that people are keeping up from the $100 to $150, fairly straightforwardly," Sinclair said.
Digicel Jamaica did not respond to a request for comment up to press time.
The latest Economic and Social Survey Jamaica reports that Jamaicans with Internet access increased to 1.46 million in 2015 up 34 per cent year on year. That figure includes 1.3 million mobile internet users, up 40 per cent; 161,000 broadband subscribers, up 3.5 per cent; and a flat 966 narrowband subscribers.
High-speed Internet jumped by 641 per cent from 120,000 in 2012/13 to roughly 920,000 in 2013/14. The main cause relates to mobile broadband, which jumped to 786,000 in 2013/14, as it was the first year that such data was collected in that category.