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Global mobile content, services market to top $150 billion by 2011

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MUMBAI: Research firm Informa Telecoms and Media predicts that the mobile web will herald dramatic growth in revenues in the mobile content and services market.

The global mobile content, services market is expected to top $150 billion by 2011

Despite falling average revenues per user (Arpu) for mobile operators, the mobile content and services market will continue to grow dramatically as services and applications reach maturity and new services begin to gain traction, according to Informa Telecoms and Media. The latest edition of Informa's Mobile Content and Services report reveals that the introduction of a whole host of new players into the value chain presents new opportunities for growth in the mobile content and services market, whilst simultaneously posing a threat to mobile operators who face losing control of the billing relationship with their customers.

The mobile web heralds a new age: Mobile handset and network technology has now evolved to a point where true mobile web access is possible. Informa anticipates that by 2011, just under half of all mobile subscribers worldwide will use mobile browsing, a trend it sees developing with new operator offerings such as T-Mobile's 'Web n Walk' service and 3's 'X-Series' services. Despite this, messaging, headed by SMS will continue to dominate the overall revenues for the market, generating over half the total revenue in 2011 (from 67% in 2006).

Informa Telecoms and Media senior analyst Daniel Winterbottom who wrote the report says, "Advanced mobile content and services have been slow to take off, but this should not be confused with the deepening relationship that we have with our mobile phones. We may not be buying as many games, full-track downloads or multimedia messages as operators would like, but we are spending a huge amount of time sending and reading text messages and organising our lives using the phone's address book, clock, alarm and calendar functions".

"Over time, users will warm to other data services as well. The mobile web is a prime example: Wap failed to take off when it was first launched, but five years on, more and more users have become comfortable with accessing news or other information on their mobile phones."

The mobile entertainment space will also see significant innovation and development. Several technologies, such as mobile music, have been available for a number of years but the increased availability of high-speed data networks (such as 3G and HSDPA) is giving further appeal to these services. Mobile music will be a major contributor to the revenues achieved in the mobile entertainment market in the next five years, although its overall share of the market will fall from 40 per cent in 2006 to 36 per cent in 2011 as new forms of entertainment such as mobile TV and video services begin to gain consumer interest. Games, gambling, personalisation and adult content will all see significant growth, as the overall mobile entertainment market grows from US$18.84 billion in 2006 to US$38.12 billion in 2011.

Evolving services: The report investigates a number of other areas which will see growth in the next five years:

User-Generated Content, the big story of the Internet in 2006, will continue to extend to the mobile space as new applications begin to extend communities to users on the move, and provide further means for mobile users to contribute content whilst on the move. Informa forecasts that the user-generated and communities will be worth US$13.17 billion by 2011.

M-Commerce faces a number of challenges and has already hit a few stumbling blocks. Whilst payments for digital content 'on-portal' continue to function, the growth in off-portal content and the migration to the mobile web will open up the market to other players. Google and eBay are both vying hungrily for this space. Using the mobile as a vector for physical payments, however, has proven more complex and whilst the technology, in terms of Near Field Communications chips embedded in handsets, is readily available, it has been a struggle to prove demand outside of the Far East. Informa estimates that the worldwide market for m-commerce was US$359 million in 2006, coming mostly from the Asia-Pacific region.

Mobile TV will continue to be the focus of much excitement from mobile operators as broadcast services using a range of different technologies are rolled out across Europe. It remains to be seen if consumers will be as excited about the services, and how operators will manage the issues of advertising and pricing which will be critical to the success of the service.

Operator strategies: The shape of the mobile content market is defining the evolution of the mobile operator as a business entity. The report investigates alternate approaches that are being taken by different operators, from those remaining 'pure play' mobile, diversifying into new vertical markets or business applications, to those converging into a one stop communications house. It gauges how these strategies will pan out and where each strategy is likely to take hold in different regions.

"The arrival of the mobile web on the mobile handset over in 2007 and beyond will see users embracing the same content they take for granted on their PCs. Operators need to ensure they are firmly locked into this value chain or risk missing out on what will be an enormous market by 2011," concluded Winterbottom.

 

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