Mobile Data Can Stabilize Operator Revenues by End of 2010
Published on: 13th Apr 2010
Note -- this news article is more than a year old.
The accelerated uptake of mobile data services will stabilize European operators' revenues according to a report from management consultancy Arthur D. Little and equity broker Exane BNP Paribas.
The report says that while voice revenues shrink, mobile data usage will continue to grow by 25% pa up to 2015, corresponding to a revenue opportunity of EUR27 billion. This growth is being driven by the increased penetration of smartphones, with 60% of mobile customers predicted to own a smartphone by 2015 and market penetration of dongles expected to be 25% by 2015.
While demands on mobile infrastructure need to be monitored, the report forecasts that this growth can be managed without massive investment in new mobile networks until at least 2013, thanks largely to the availability of HSPA+ technology and offloading solutions (Wi-Fi and femtocells).
With subsidies on smartphone sales necessary to drive the market, it is important that operators aggressively promote data plan subscriptions and generate more competition in smartphones.
With the walled garden model bypassed by device vendors, operators should concentrate on selling data plans and value-added features such as billing and authentication, and collaborate actively with media players. For larger players, app stores are also a good opportunity to stay close to customers and generate incremental revenues.
"The mobile internet is finally ready to go primetime and fulfill its potential as the next big money-spinner for operators," said Didier Levy in Arthur D. Little's Telecommunication, Information, Media and Electronics (TIME) Practice. "While the iPhone handset and app store has undoubtedly kick-started the mobile internet, it is the mass market proliferation of smartphones and other connected devices over the next few years that will really drive uptake and increase ARPU - as such, it is vital that operators develop comprehensive pricing strategies based on data bundles and market them strongly."
"Mobile data traffic is set to surge, but solutions exist to keep investment under control, which is good news for operators' financial profiles. We also expect more network sharing, which will allow challengers to compete head-to-head with larger telcos in mobile data," said Antoine Pradayrol, Exane BNP Paribas.