First some housekeeping. In last week's column, I chided Verizon Wireless for not revealing any data revenue numbers. Well, I turned out to be completely wrong. Verizon Wireless, in fact, did reveal in their second-quarter results that it took in $438 million in data revenues for the second quarter, accounting for about 7% of their overall service revenues. In addition, their numbers are increasing. Data accounted for 6.3% of revenues the previous quarter and 4.2% the last quarter of 2004.

While I was obviously careless with some of the facts backing up my argument (thanks to Verizon's Jeff Nelson for pointing that out), the point I was making still holds water: the investment VW has made in its 3G networks and the market initiative VW has shown in wireless data hasn't produced many dividends--at least not yet. Verizon's closest competitors Cingular and Sprint posted data revenues of 8.2% and 10.4% of overall data revenues respectively. So, despite having the jump on 3G for more than a year, Verizon is still lagging the 2.5G competition, both of which will have their own 3G networks deployed by the end of the year.

In fairness, one year does not a radical transformation make. Vcast has only been up for six months, and the sheer size of the jump in data revenues in the first quarter, when the 3G consumer service was launched) is impressive. If Verizon keeps growing its data revenues quarter-over-quarter, it could have a fairly formidable data operation by the time Sprint and Cingular get their consumer 3G services launched this year and next.

The next six months will be a very interesting period for data in general. Not only is Sprint signaling it will have an EV-DO network launched to rival Verizon's, but Cingular is planning a radical shift in its approach to data. It's tearing down the garden wall surrounding its data services, using a new partnership with Bango to provide third-party billing services so consumers can access outside content. In part, Cingular is following the more open model of AT&T Wireless's mMode, which Cingular has seen in operation for the last month. But is also likely looking to overseas carriers that have similarly opened up their networks to see huge spikes in traffic over their networks.

The potential for third-party content is much bigger today than the debate over walled vs. unwalled gardens a few years ago. We're no longer talking about complicated WAP site URLs users have to punch in. Ring tones, wall papers and games can be sent from a Web site or through short codes. And there's also a lot more content out there that users want that a walled-garden carrier can't provide. Cingular may be the first, but the other carriers have to be seriously considering following in its footsteps.

Contact me at kfitchard@primediabusiness.com.