European mobile operators need to overhaul their pricing strategies to kick-start the lagging mobile content market for third-party services such as ringtones, logos, games, music and videos, according to a new report from Analysys Research.
The mobile content market in Western Europe has taken off more slowly than expected, generating revenues of just US$3 billion in 2003. While it currently lags behind markets such as Japan and South Korea, there is plenty of scope for it to catch up, provided that operators and other industry players urgently address the barriers presented by current pricing structures and billing capabilities.
"A key short-term priority is addressing the inadequacy of pricing structures," insists Alex Zadvorny, report author. "The prevailing approaches to pricing are far too complex and difficult for the customer to understand. In some cases a subscriber incurs three types of charge in order to access one piece of mobile content. Western European operators should either follow the Japanese operators' approach or strive to develop affordable flat-rate content packages similar to those in the satellite TV industry."
The choice of pricing philosophy will also depend on the relative strength that an individual operator has in the overall content value chain. As large content owners increasingly realise the potential for distributing content via mobile networks and try to play a greater role in this market, operators will face the choice of either becoming integrated content 'broadcasters' or focusing primarily on the provision of network capacity. Moreover, this decision is increasingly interrelated with factors such as pricing, billing and customer segmentation.
New services such as mobile music and video have recently captured the imagination of mobile operators, according to Analysys: "South Korean operators have provided evidence of the growth potential in mobile TV and video
Posted to the site on 20th December 2004
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