Wrong Data Pricing Could Hit Revenues - Report

Mobile operators and mobile virtual network operators (MVNOs) could miss out on a large chunk of revenue (up to 16%) if they do not choose the most appropriate pricing policies for messaging, content and entertainment (MCE) services, according to a new report released by Analysys. The report concludes that the pricing of MCE services could have a dramatic effect on overall mobile revenue and average revenue per user (ARPU).

"The pricing that operators adopt for MCE services could substantially affect not just their revenue from those services but also their overall service revenues. We estimate that there could be a difference in an operator's total mobile revenues of 16% between the most appropriate and least appropriate MCE pricing strategies," explains Eddie Murphy, author of the report. "Choosing the right strategy will be key, and the right strategy will vary from operator to operator according to their approach to content, their position in the market and the strength of their international alliances."

MCE services are already an important part of the Western European mobile market, with 12% of the region's total mobile revenues (US$13 billion in 2002) coming from such services as person-to-person messaging, mobile instant messaging, games, music and video clips, news and location services, ringtones, logos and content messaging. By 2008, revenue for these services is forecast to rise to US$35 billion (23% of total mobile revenues).

However, the report states that action is needed in the short term, to counter the recent dramatic slowdown in growth of mobile voice revenue. Mobile operators will need to focus their attention on growing MCE services as quickly as possible - and pricing is a critical factor.

"There is no scope for complacency," warns Murphy. "The strategic approach for MCE services needs to be clearly established for 2.5G platforms in advance of 3G service offerings. Waiting for 3G to determine the appropriate strategies will be too late."

Posted to the site on 1st July 2003