Publication Overview
For those needing high level strategic analysis and forecasts of Australia’s mobile data and content markets, as the market moves towards wireless broadband, this report identifies business opportunities, points out the hype and the pitfalls, and will be of assistance in making the right business decisions. It provides essential reading and gives in-depth information on:
- Competitive information on the market, the industry and the players;
- Overview of the real innovators in this market and what are they offering;
- Mobile data revenues, forecasts and analyses;
- SMS statistics and forecasts; and Premium Rate SMS;
- Examination of HSDPA and LTE technologies;
- Overview of mobile TV and m-commerce;
- Telemetry, location services and RFID;
- Mobile radio market;
- Wireless mobility market;
- Mobile media – products and services analyses.
Researchers:- Phil Harpur, Paul Budde
Current publication date:- August 2008 (8th Edition)
Next publication date - August 2009
Executive Summary
Market shift from voice to data
Mobile data traffic is soaring. This is due to the capped mobile data services now on offer in the market by Optus (Virgin Mobile), Vodafone and Hutchison ‘3’. By far the largest growth market will be in mobile email. With the benefit of uncapped prices customers will check their web mail more frequently and this will begin to effect SMS usage. Slowly but surely prices are coming down and opening up new mass markets.
In 2009 mobile broadband revenues could start to challenge SMS revenues and could reach the $1.5 billion threshold (this includes the hardware such as data cards, etc). Within this figure, we do include mobile media services such as ringtones, music, games, etc. The value of that segment has been growing very slowly over the last decade and within a year, the operators are already generating more revenue from basic mobile wireless access than they are from their mobile media portals.
Currently this is predominately complementary revenue for the mobile operators; however it is expected that over time this will balance out when the mass market starts to kick in. By that time this revenue will change from complimentary to substitution. Also broadband is less developed in Australia than in other developed countries. Thus there is a relatively better business case for mobile broadband in Australia than in other countries.
However, wireless mobile is still a very small proportion of this mobile data. BuddeComm estimated that in 2008 this was around 5% of this market. We also remain sceptical about predictions that wireless broadband could take over from fixed broadband over the next one to two years. Although prices have fallen over the last two years, this service still remains too expensive for the majority of the residential market. It certainly is taking off amongst the business market and the top-end of the residential market, particularly among professional people.
Also, it won’t be until IP-based Next Generation Mobile, based on more spectrum, becomes available, before we start seeing the development of mass market wireless broadband. While some relief is expected when Long-term evolution technologies become available, 4G which would have the bandwidth and the IP efficiencies is not expected until 2012-2015.
'Off deck' models developing
Portals are rapidly proving to be a far too crude tool to play any role of significance in the rapidly emerging digital media market. Instead there is room for what we call value added infrastructure services, facilities and tools that allow customers to better manage their emails and transactions, as well as the management of other interactive services that are increasingly going to take place over the mobile networks.
Rather than operating their own portals, mobile content will move ‘off deck’ and the mobile operators will offer mobile payment facilities. They have a unique infrastructure in place that allows for micro payments, through Premium SMS, which is a key element that is still missing in the digital economy.
In the end, structural changes will also be needed in the mobile industry in order to engage true content providers and media companies to independently offer their services over open mobile networks.
Value-added markets
Activity in the mobile value-added market is kept artificially low because of the high charges that apply for such services. At this point in time, there is not sufficient spectrum available to allow for a more mass market development. Furthermore the current technologies are not optimised for data. End-to-end IP based technologies are required for that.
What this means is that for the time being the mobile data services will revenue wise stay rather static. Also portal based services will decline as customers will move more and more towards off deck services.
Business models for content providers remain shaky, with operators still charging a hefty 30-50% of revenues.
Key highlights:
- BuddeComm remains puzzled and bewildered about the hype surrounding the iPhone, although it is currently no mass market product, nor is it likely to be in the foreseeable future. However, what Apple is teaching the industry, is that more marketing is needed to get this market moving.
- The question remains as to whether HSDPA will ever reach its true mass market potential, or will LTE and later on 4G take that position in 2010-2012 and beyond. A rapid deployment of low cost data access packages will propel HSDPA right in front the debate. HSUPA+ and LTE have already started to arrive on the horizon.
- The mobile radio market is set to boom. Motorola is making good progress with the rollout of its Zeon Digital based network in NSW, Queensland and Victoria, which is based on the TETRA standard.
- Telstra’s Next G network is certainly one of the global mobile success stories. Not only has its rapid rollout been incredible, but also the way that it has serviced the market has been very successful.
- The new market of broadband ‘mobility’ will further develop in an all-IP network infrastructure, linked to fixed and mobile personal devices, with high storage capacity and parallel processing. Data will move freely around this wireless grid, which of course, will also be linked into the fixed network.
- A big growth market for mobile broadband will be IP Telemetry. One of the reasons for the request for more spectrum is the rapid growth in wireless machine-to-machine communications. This is seen as the fastest growing industry over the next decade. It is also fuelling the IPV6 debate as all these billions of devices will need an IP address. It is expected that WiMAX will play a significant role in this market.
- There has been an enormous amount of hype about mobile TV but the reality is that very few people are prepared to pay the prices that the operators are charging for the service. The current technology, and more importantly its business models, don’t yet stack up.
- As we have been predicting for some time, the PSMS market has begun to falter. The high cost of access has been a constant limiting factor for their further development. With capped mobile data prices we see a very rapid changeover from PSMS to off-deck services.
- Key companies in the mobile advertising market are Blue Freeway, destra, Hyro, belong, Photon and Premium TV.
Data in this report is the latest available at the time of preparation and may not be for the current year.