Wireless operators have built huge businesses selling cellular voice service for a hefty monthly fee. Fees are based on a fixed monthly charges regardless of whether you use the minutes / data or not. But now that cellular voice calls are a commodity, consumers are spending much less money than they used to for voice services. Add VoIP and cheap prepaid wireless service into the competition, and this will only continue to erode in the future as long as it remains based on fees and not adverting. Facebook, Google & Skype all have disruptive platforms that are disinter-mediating the dumb pipes making them almost irrelevant. The only question remains when will be the tipping point?
The dumb pipe industry is hoping that data revenue from text messages, Internet access, multiple mobile Internet devices per person, like the iPad and Kindle -- will make up for the difference. And so far, it's coming close. But monthly bills will likely continue to shrink and these operators don't have a clue how to monetize their services via adverting yet for fear of cannibalizing their cash cows.
Here are three charts below which are quietly forecasting the demise of predictable subscription based ARPU related business models (Voice & Data) and the rise of advertising. Its all about leverage and clearly AT&T and Verizon are losing it and Facebook and Google are gaining. I think we are closers than everyone thinks to free subsidized data and voice services from Facebook and Google. I can't wait because I think as effective CPM's are on the rise publishers stand to actually make more money than the dumb pipes who are focused on fixed subscription models.