Mobile data spending tops voice for first time

U.S. consumers spent more on mobile data than on voice for the first time in 2012, according to a report released Monday, confirming that a shift in how Americans use their phones has reached a long-expected tipping point.

Consumers' increasing appetite for data is forcing debates over how regulators should allocate the country's wireless spectrum and how much consumers should pay for fast data service.

"What this report does is heighten the urgency that we need action," said Grant Seifert, president of the Telecommunications Industry Association (TIA), which represents companies such as Cisco, Ericsson and Nokia. "We need a clear understanding of what's going to happen."

Consumers spent $94.8 billion on data services for their phone and other mobile devices in 2012, up from $71.1 billion in 2011.

That eclipsed the $92.4 billion spent on voice services in 2012, which has been steadily declining since 2008.

Data's domination is expected to leap to $118.6 billion in 2013, while spending on voice services will fall to $86.4 billion.

These expectations are bolstered by consumers' rapid shift to smartphones. Global sales of smartphones will eclipse the sale of standard mobile phones that connect to the Internet but don't have data-gobbling features such as apps, according to the International Data Corporation study released Monday.

The rise in data consumption is also being fueled by the wide adoption of other Internet-connected devices, such as iPads, household appliance and even high-tech cars.

The TIA study noted that U.S. mobile connections also outnumber the country's adult population with many consumers owning more than one mobile device. That is expected to happen on a global scale later this year, according to GSMA, the cellphone industry group.

Wireless carriers must improve network efficiency to accommodate the growing demand for data services, said IDC mobile analyst Ramon Llamas. In response to increasing data demands, carriers already have begun upgrading their networks to implement new technologies such as 4G LTE.

But the industry must also keep up with the growing demand for immediate, dependable connections.

Young consumers, said Llamos, have come to expect their mobile phones to do more than simply make phone calls, and manufacturers are recognizing that shift.

"For a lot of the smartphones being released right now, the primary function is to handle data," he said.