2007 Global Mobile - Data and Content Markets

Mobile data is the answer to the declining revenues currently being experienced by the mobile industry. By 2015 it is expected that most mobile revenue will come from data. However, business models will need to change for this to occur – users will only want to access mobile data services if they are provided at low cost. For many mobile operators this is going to require significant changes to their current voice-centric business models.

One of the major areas where high-speed services are needed is in mobile data communications. To compete with fixed broadband, it is essential for reliable high-speed wireless technologies to be developed. Wireless broadband is much more suited for the delivery of mobile data than 3G, and the infrastructure also has more potential for the delivery of Voice over Internet Protocol (VoIP). These are two reasons why wireless broadband could start challenging 3G in the next decade.

While many countries are still considering the introduction of 3G, the industry has already developed 3¼G and beyond, with technologies such as High Speed Downlink Packet Access (HSDPA). Linking fixed and mobile together on IP Multimedia System (IMS) is another development, allowing for mobile TV and triple play models.

To try and stay ahead of developments in the fixed broadband market, the mobile industry is developing its own triple play models, where voice, data and video are bundled.

Consumer need for greater bandwidth will continue to push the evolution from 3G to 4G. Increasingly users will require high data rates, similar to those on fixed networks, and they will want superior services – good video and sound quality for example. More bandwidth would also allow for more sophistication in receiving and managing large quantities of information and improve personalisation services. Convergence with other network (enterprise, fixed) services will also come about through the high session data rates.

By 2015 the mobile content market could be worth well in excess of $1 trillion, with voice comprising only a 10% share of the market – if the industry gets it right. Currently mobile operators are still not opening up their networks for mobile content; one of the main reasons being that the current mobile technologies are not well-suited for the delivery of what the market calls ‘rich experience’ content (multimedia, video, etc). So for now mobile data traffic will continue to comprise mostly SMS, followed by ringtones and a small proportion of everything else. The focus of the mobile operators will also remain on protecting their lucrative voice business for the time being.

Developments in mobile commerce are continuing, with banks and merchants beginning to show an interest in collaborating with mobile operators. With the introduction of contactless cards using Near Field Communications (NFC); this industry sector is beginning to show some signs of revival.

Handset development is also forging ahead with the introduction of the mobile wallet using technologies such as NFC, Radio Frequency Identification (RFID), bar codes, and visual recognition.

This report provides analyses, statistics and trends on the mobile data and content markets, including a brief overview of regional developments. It provides information on the 3¼G technologies in development, including HSDPA and IMS, and also a discussion on the technologies that are being used to bridge the gap between the well established 2G and the much vaunted 3G, such as GPRS, EDGE, HSCSD and i-mode.

The report also includes an overview and statistics on the various mobile content services such as music, gambling, adult content and mobile TV. Other topics covered include the mobile commerce market, telemetry, Location-Based Services (LBS), Global Positioning Services (GPS), and Automatic Data Capture including RFID - which is predicted to gain popularity due to a growing awareness of its benefits to many industries.

Key highlights:

• In 2007 the worldwide mobile data market is worth over $100 billion.
• While voice still makes up the majority of mobile traffic, it is estimated that mobile data now contributes more than 10% of global ARPU.
• There are over 100 HSDPA networks either planned, in deployment or already commercially launched in more than 50 countries around the world.
• Around 40 mobile operators are trialling or deploying IP Multimedia systems.
• Entering 2007, South Korea leads the world in terms of mobile TV subscriber adoption, but Europe, Japan and the US are expected to become key markets in the future, due to their large mobile subscriber bases and popularity of TV viewing.
• SMS remains an attractive application, with around a trillion text messages sent every year. The mobile industry is now looking towards Instant Messaging (IM), with dozens of trials taking place around the world.
• Another extension of the immensely popular SMS service is the Multimedia Messaging Service (MMS); this provides the ability to send longer text messages, as well as music and pictures. However with each message costing on average around four times the cost of an SMS, price is hindering the take-up of this service.

Mobile data (non SMS) as an average % of operators’ revenue

• Asia Pacific currently dominates the mobile entertainment market, but North America will increasingly taker a larger share over the next five years.
• Also in the next five years, the introduction of mobile wallets will lead to mobile phones enabled with NFC representing around 30% of yearly handset shipments.
• While Location-Based Services (LBS) were over-hyped earlier this decade, hope has been rekindled following the emergence of handset-based GPS-enabled location services.
• Radio Frequency Identification (RFID) has also existed for more than a decade, and is only now gaining popularity due to emerging awareness of its many industry applications. North America is the biggest regional player in RFID, accounting for around 60% of regional market revenues.