While sales of smartphones are increasing for wireless carriers, the revenue derived from postpaid customers is not keeping up, according to a new report from PricewaterhouseCoopers.

The results point to the growing importance of alternative sources of revenue for wireless carriers, such as prepaid customers. The company?s 15th annual wireless industry survey also underscores the importance of investing in broadband services for carriers so they can drive revenue from the use of mobile broadband data.

?The results seen for 2011 are representative of a significant, ongoing paradigm shift for the North American wireless industry,? the report said. ?As the industry continues to mature, prepaid and mobile broadband services represent increasingly-important revenue opportunities for operators.

?Prepaid plans, including prepaid plans with data service components, represent a significant and growing portion of revenue as consumers continue to trend towards less expensive, no-commitment wireless plans,? it said.

?In addition, the expanded use of smartphones, which offer higher revenues per user as compared to non-smartphone plans has required wireless companies to change the metrics for which they compete to emphasize data speed and available bandwidth.?

Paradigm shift
The report reflects an ongoing paradigm shift for the North American wireless industry as the industry matures.

While sales of smartphones to new postpaid customers and upgrades for existing customers continue to grow, consumers are also trending toward less-expensive, no-commitment wireless plans, according to the report No wires attached: Changes and trends in the North American wireless industry.

As subscriber growth slows, the challenge for wireless carriers will be to balance pricing pressures while still funding much-needed network improvements to support the growing demand for data intensive services and speedier data.

The report reveals the impact that the growth in smartphones is having on wireless carriers, with the sale of smartphone devices to new postpaid subscribers representing 48 percent of device sales in 2011 compared with 30 percent in the company?s 2010 survey. The percentage of sales related to customers upgrading to a postpaid smartphone was 51 percent compared with 36 percent in 2010.

Additionally, the number of total postpaid subscribers using a smartphone increased to 37 percent compared with 23 percent in 2010.

The percentage of prepaid subscribers using smartphones was 8 percent in the 2011 survey.

However, while sales of smarpthones to postpaid customers are growing, the average revenue per user for postpaid customers remains consistent and was $56 in 2011 compared with $55 in 2010.

The average revenue per user for smartphone plans remained significantly higher than the average revenue per user for postpaid customers and was $86 and $83 in the 2010 and 2011 surveys.

Prepaid revenue grows
Prepaid plans are already beginning to account for a larger percentage of carriers? revenues.

On average, 29.2 percent of total service revenue was generated by prepaid plans as compared to 22.5 percent in the prior year survey for all responding companies, according to the report.

However, prepaid revenues from SMS text data significantly decreased as a percentage of total prepaid data revenue to 36 percent from 54 percent in the 2010 survey.

Wireless carriers saw significant increases in the revenue derived from smartphone based email and Internet access from handsets, premium SMS data, laptop cards, Wi-Fi services and mobile computing revenue streams.

Other findings include that seven of the companies surveyed were using 4G technology in the 2011 survey compared with only three in 2010 as carriers continue to transition to the more powerful networks to support the increasing demand for video chat, mobile TV and other data-heavy services.

Eight United States and four Canadian wireless companies participated in the survey. The U.S. companies included Sprint Nextel, T-Mobile USA, US Cellular and Verizon Wireless.

?While the move to higher-priced, data-centric pricing plans is benefitting carriers, the challenge for the future will be balancing slowing subscriber growth and pricing pressure while funding much-needed network improvements required to enable the broader move to smartphones,? the report said.