Mobile Messaging Revenues to Defy Economic Downturn
Published on: 26th Jan 2009
Note -- this news article is more than a year old.
2009 will undoubtedly be a tough year for many global economies. However, despite uncertain forecasts, messaging company, Acision believes that the changing economic landscape will present many revenue opportunities for service providers. Based on the 2008 2009 New Year SMS figures alone, Acision predicts messaging and its associated revenues will continue to soar globally despite the economic downturn.
Acision has compiled its mobile predictions for 2009 around its core business domains (messaging, mobile broadband, mobile marketing and charging), highlighting ways in which service providers can capture potential revenues and charge for services effectively.
According to Acision's figures, global SMS traffic increased by 30 percent over the New Year period compared to the same period last year. Revellers sent a mind blowing number of more than 55 billion text messages with 31 billion of these being processed successfully and without interruption through Acision's systems. Impressive SMS growth was seen in North America, where 6 billion New Year messages were sent, as well as other markets such as Latin America, Asia and Africa. However, the Philippines retains its leading position as a text messaging powerhouse, with over 3 billion messages sent over New Year by a subscriber base of just 66 million.
These figures demonstrate that SMS is still the preferred choice for communicating and is set to remain the most dominant data revenue driver for service providers in 2009.
Steven van Zanen, VP of product marketing at Acision, says, "Most networks are equipped to cope with the surge in messaging during New Year peaks but on an average day these networks only use about half of this capacity. In mature and saturated markets such as North America, Europe and parts of Asia-Pac, Acision believes that ‘sweating' underutilized network assets will be instrumental in driving more messaging revenue. By offering value added enhancements to messaging that are already proving to be effective in the online community, such as automated replies and out-of-office, service providers can offer more convenience and productivity to end users, while increasing revenue streams," continues van Zanen.
"Additionally, in all markets, messaging will increasingly be a key way to interact with personal blogs and online services such as Facebook, Twitter and MySpace. This approach was very successful in the US where the operators have marketed multimedia messaging as a channel in their social networking offerings. As a result, MMS traffic per user in the US is twice the global average.. In emerging markets, such as Africa and parts of Asia, where fixed-line infrastructure is limited, basic mobile messaging services will also remain a cost effective form of communicating for users," says van Zanen
Mobile broadband turned a corner in 2008, particularly in mature markets. Substantial growth levels were fuelled by the growing availability of high speed access networks, flat fee pricing models, increased smart phone usage and ‘plug and play' laptop dongles.
Acision predicts that by 2012 a nine-fold increase in global mobile broadband revenues is expected but only if operators put the right solutions in place to control traffic volumes over the network. At present network backhaul costs are already one of the largest cost items in the operator's financial sheet and with mobile broadband traffic levels expected to quickly grow to well over 20 times today's volumes, this poses a serious threat to profitability. If left unchecked, operators will be confronted with network upgrades or backhaul outsourcing contracts running to billions of USD - a hard pill to swallow in a tougher climate.
Acision believes that long term profitability will only be secured if operators acknowledge this challenge and embrace a firm and clear agenda to tackle the issues. Providers need to embrace an Average Revenue Per MegaByte (ARMB) paradigm where the main focus lies on raising the profitability per delivered MB instead of the traditional ARPU model only.
Steven van Zanen states, "Maximizing Revenue Per Megabyte will require operators to evolve beyond today's monthly quota limitations and introduce sophisticated traffic optimisation and policy management capabilities which allow better control over traffic and user access during peak times. This will allow operators to increase the traffic travelling over current networks while bringing down the projected billions of additional backhaul investments mobile broadband providers may be forced to make.
"In addition, mobile broadband providers need to build truly compelling offers leveraging their unique mobile capabilities. Examples include home packages with dongles for all the family and roaming packages. Rich, distinctive service offerings will provide up and cross selling opportunities that will help develop offerings beyond a bland access model, expanding the customer base and raising ARMB levels."
In emerging markets such as Latin America, Acision believes service providers will be watching whether recent 3G roll out in these regions will encourage the uptake of mobile broadband where, to date, voice and SMS services are still the most popular services and look to remain so in 2009.
Acision predicts that in 2009 mobile marketing will remain in its early stages, with mobile operators continuing to experiment with predominately single channel solutions. However, to significantly increase revenue, service providers will need to leverage more from the mobile marketing value chain they already have in place.
Steven van Zanen says: "Budgets are shrinking however the mobile's direct route to the consumer is increasing its appeal as a marketing mechanism. To fully kick off mobile marketing, service providers need to monetise mobile messaging as a vehicle for advertising, work with the brands to enable advert insertion as part of the existing communications streams, provide end user control so subscribers can opt-in or receive some level of reward and increase advertising relevance based on a customer's identity and full context such as location, usage and device capabilities. In this economic climate, it is essential that operators select a mobile advertising platform that is scalable and fully extendable to all channels allowing them to easily expand their mobile advertising activities to maximise their return on investment."
In some regions such as Asia-Pac, Acision can see location-based directory search likely to take off during 2009, with the launch of services like Rednano's Proximity search in Singapore (click here for more details). And while mobile broadband pushes forward in other regions, the foundations for further mobile marketing opportunities will be created later in 2009.
In 2009, Acision predicts that the prepaid charging model will continue to dominate across the globe as more users opt for prepaid phones as the global recession hits and credit is limited. Prepaid demand looks set to increase in regions such as India and China as well as the US, where a credit check is no longer required to buy a prepaid sim card. Therefore, for operators to reduce prepaid user churn, Acision believes they will need to ensure their charging technology converges voice and data within one system, is in ‘real-time' and keeps up with marketing ideas for creating new and innovative offers for all users.
Simon Dallyn, SVP of charging at Acision, says, "By taking an evolutionary approach to charging, operators can install clever, highly flexible models that reduce OPEX and allow them to sweat their existing assets through customer loyalty schemes, family bundles, homezone charging and local number provision - which breaks the customer relationship with the fixed-line telephony providers. Operators can also provide discounted offers for customers in locations with low usage, thereby increasing traffic on underused networks. These are highly popular charging and billing models which are used in parts of Asia and should be replicated across the world as they provide unique ways for operators to add value to customers while driving up revenues."$page_length='long'; ?>
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