At the recent 3GSM Congress in Barcelona, it was possible to hear a whistling noise as the mobile operators scrambled past each other to reach mobile content providers, and it is not hard to find out why. Data-heavy mobile content services will be key to their future success.
ABI Research is releasing two Research Briefs, “Mobile Operator Performance Benchmarks, 4Q-2006” and “Global Wireless Subscriber Dynamics, 4Q-2006” that track the latest developments in the global mobile marketplace. “As of the end of 4Q-2006, there were over 100 million WCDMA subscribers around the world,” said Asia-Pacific research director Jake Saunders. “The WCDMA subscriber sector is moving particularly fast, growing 102% YoY and 16.6% QoQ.”
3G subscribers are providing a much-needed shot in the arm for mobile operators, because they deliver an average revenue per user (ARPU) that is 5% to 20% percent greater than the average. For many operators, the period 2Q-2004 to 2Q-2006 proved challenging, as competition pushed down on ARPU but the additional revenue streams from non-voice applications failed to compensate.
“Operators are now looking to YouTube Mobile, Jamster and Warner Music for content to excite and entertain consumers,” Saunders added. “Messaging platforms such as Research In Motion’s BlackBerry devices and enterprise solutions are driving up data traffic and non-voice revenue contributions.” Non-voice now represents between 15% and 29% of operator service revenue, depending on the market. Of that, mobile Internet downloads and data now contribute a very respectable 3% to 17% of total service revenue. Operators are striving to lock down entertainment content, including not only broadcast network syndicated shows, but also user-created material that enables an operator to differentiate itself and reduce churn.
Fixed mobile convergence (FMC) and substitution are also giving mobile operators a lift. Minutes of use (MoU) are growing across all markets, with the exception of Japan, where the high dependency on messaging applications has been absorbing some of those minutes. Overall, average MoU grew 1.8% YoY.
The amount of traffic an operator carries is about to explode, and within seven years the majority of the traffic carried will be data-orientated (music, video streaming, messages, enterprise applications and more). Handling that traffic efficiently will then become the new challenge for operators.