Consumer use of mobile phones for the transfer of data will generate revenues of $71 billion worldwide by 2007, according to a new report from analyst and consulting group Ovum.
This year, traffic and subscription revenues generated by consumers sending data via their phones will account for 93% of operators’ data revenues; this will fall to 78% in 2007, according to the report. These figures do not include the value of premium content and other transaction revenues, which will further boost operator income.
The much-heralded multimedia messaging services (MMS) will bring mobile gaming, picture messaging and instant messaging to the telecoms operators’ arsenal (see Will Europeans Respond To MMS Marketing?). These services, some of which will be premium pay-systems, are expected to boost telcos’ revenues. Ovum says that operators must put their mobile consumer strategy in place now if they are to capture a share of the $71 billion revenues expected by 2007.
“With the take off of MMS and the increasing availability of Java phones, 2003 is the crunch year to prepare for consumer mobile applications,” says Michele Mackenzie, senior analyst with Ovum.
Messaging brings in the money Ovum’s forecasts also show that messaging – including SMS, MMS picture messaging, instant messaging and mobile email – represents 85% of total consumer mobile data spend. Information and entertainment account for 10% and 5% respectively. The balance will shift slightly by 2007, but the uptake of messaging applications will still drive most of network traffic with 80% of total consumer spend, says the report.
“This is good news for operators as messaging is currently an ‘operator keeps all’ application: [as it] it mainly depends on the network and therefore requires few or no third party partnerships, operators do not have to share the revenues it generates,” says Mackenzie.
Nevertheless, Ovum says that the potential of the information and entertainment categories should not be ignored. “While traffic revenues from these groups are significantly lower than messaging, operators will boost their revenues through premium content and transaction value from revenue sharing agreements with third parties, such as content developers,” adds Mackenzie.
Ovum’s research shows that Western European markets take the majority share of total consumer data revenues worldwide, at around 46% in 2003. In second place, Asia Pacific accounts for 32% of the global revenues, including more than half generated by the Japanese and Korean markets where wireless data is already established and continues to enjoy accelerated growth.
By 2007 the distribution will become more even, with Europe’s share diminishing to 31%, Asia Pacific’s to 25% and North America and China/India taking 18% and 13% respectively.
