2006

According to Informa, there are five major trends that will drive operator strategies in the coming year; changing business models, convergence and quadruple play, rise of the mobile virtual network operator concept (MVNO), VoIP driving the price of voice and growth of off-portal mobile entertainment.

High subscriber acquisition costs along with a decline in price per minute of mobile voice telephony is expected to place pressure on operators, with 60% expecting subsidies to decrease to remain the same in 2006. A large number of operators, 84% predict the price of voice services to drop by up to a quarter, while 49% forecast churn to increase.

The roll-out of internet protocol (IP) networks is expected to cut operating expenses, with converged fixed mobile TV broadband services allowing users to make ‘mobile’ calls at home.

MVNO is forecast to evolve in 2006, as operators realise that a wholesale strategy can, in some cases, be more profitable that a retail business, with the report predicting that in 2006 there will be more operators adopting a wholesale/MVNO model to find a way around the handset subsidy dilemma.

Mobile operators will also invest more in mobile content services in 2006, with mobile music and email technologies expected to generate most interest in 2006, followed by games and television.

Commenting on the future of the mobile industry, Mark Newman, chief research operator for Informa Telecoms and Media said: “Mobile operators need to keep their feet on the ground. The arrival of IP and services based on unlicensed wireless networks will fundamentally change the mobile landscape over the next five years.”

Newman continued: “Until now, spectrum ‘ownership’ has allowed mobile operators to control the marketplace. Over the next five years operators will lose this control. With the breaking down of the barriers to entry, price competition will inevitably follow. And if operators are to preserve profitability they will have to either cut costs, develop new revenue streams, or both.”

Informa asserts however, that although next year is forecast to be a healthy one for the mobile industry, service providers must continue to look for new revenue streams. Newman added: “New mobile entertainment services may be part of the mix but more coherent wholesale strategies and innovative pricing schemes designed to take more traffic away from the fixed network could ultimately provide greater rewards.”

Next year also looks positive for 3G mobile phones with earlier research from Informa Telecoms and Media revealing that 3G subscriber growth has outperformed first and second generation digital network subscriber growth in the four years since the launch of the world’s first 3G network in Japan (see 3G Mobile Phones Come Of Age).

According to Informa, Asia will see some of the first commercial 3G networks in the world, with South Korea’s KFT expecting to roll out HSDPA in 17 major metropolitan areas by end 2005 and aiming to expand coverage to 45 extra cities in April 2006.