Operator mobile content revenues to rise to $52bn in 2013 - but only if they move towards a smart pipe business model, says research

25 November, 2008 09:43
Operator mobile content revenues to rise to $52bn in 2013 - but only if they move towards a smart pipe business model, says research
A new study from Juniper Research has found that Mobile Network Operators (MNOs) will need to fundamentally change their mobile content business models by emphasizing ‘shared value creation' in order to avoid becoming ‘dumb pipes' in the future. Only if they can transform their businesses into ‘smart pipe' service providers, can they significantly increase their income from mobile content - estimated at $23bn in 2008, rising to $52bn by 2013 according to Juniper.
The global mobile content market will be worth $167bn by 2013, shared among players such as MNOs, Content Providers and third parties such as content aggregators and billing companies.
Currently MNOs take a significant percentage of the revenues generated by Content Providers when they use their networks. This has resulted in high prices for end-users and consumers being deterred from accessing mobile content on a wider scale. This unattractive situation has become a disincentive for MNOs and Content Providers alike, with some Content Providers attempting to bypass the MNOs or exit the sector altogether. Clearly, the situation needs to change. But it will be down to the MNOs to make the first moves, says the report.
The new report examines the three main scenarios facing the operators and the sector as a whole - the ‘Dumb Pipe', ‘Smart Pipe', and ‘On-Portal' routes. Modelling the market in such a way is said to have enabled Juniper to create a detailed forecasting and modeling tool to examine how a future market may develop under different conditions.
According to report author Andrew Kitson, "One single scenario will not win out since different business and revenue models have to co-exist in the mobile content market. Players will adopt multiple approaches that best fit their markets. Crucially, if MNOs are to benefit financially, they need to move away from their Dumb Pipe roots to the Smart Pipe model, though they will clash with the content providers which already dominate the Smart Pipe. A compromise needs to be found."
If MNOs can change their ARPU-driven mindsets to focus on value creation and support for their partners, they can swiftly make the change.
Other findings include
Under the Smart Pipe model, MNOs will not see their share of the overall mobile content market rise appreciably, but revenue will rise in value by 125% over the 2008-2013 period.
Under the On-Portal scenario, content providers will see their share of the market rise from 54% in 2008 to 68% by 2013, providing they can secure more attractive terms from MNOs.
Third parties - especially aggregators and billing service providers - will come under pressure from larger players (such as MNOs) seeking to achieve horizontal integration and economies of scale.
The report provides coverage and forecasts from a global perspective as well as from a regional viewpoint by looking at how the market will grow or wane under the On-Portal, Dumb Pipe, and Smart Pipe scenarios around the world.

Mobile games market to reach US$10 billion by 2009, says Juniper Research

9 Nov, 2007

The increasing popularity of casual gaming, combined with a steadily increasing variety of gaming-friendly handsets offering high quality 3D graphics aimed at core gamers, will help to push end-user generated revenues from mobile games to nearly US$10 billion by 2009, according to a new report by Juniper Research.
In total, more than 460 million mobile users are expected to download games by 2009, representing more than a double increase on the current number. Much of this growth is expected in emerging markets such as the Indian sub-continent, where the number of users will rise from 10 million in 2007 to nearly 40 million in 2009, stated Juniper Research.
According to report author Dr Windsor Holden, "Game downloads have already overtaken those of ringtones in a number of Western European markets, while mobile handsets are now the de facto games console in many developing countries."
However, the Juniper Research report cautioned that the high cost of browsing and downloading services and content combined with opaque pricing structures were continuing to act as a disincentive to service adoption. It also welcomed the fact that there were an increasing number of products targeting female gamers, although added that more needed to be done to widen the mobile gaming demographic.
"Essentially, the proportion of leading titles focusing on action and adventure has not altered discernibly over the past two years," said Holden. "While these are popular within the traditional gaming demographic, there is a major opportunity to attract casual gamers by enhancing a portfolio mix with more titles from alternative genres."
China and the Far East will remain the largest regional market for mobile games throughout the period covered by the report, with revenues rising from nearly US$2.7 billion in 2007 to US$5.7 billion by 2012. Global revenues from in-game advertising will rise from just US$90 million in 2007 to more than US$1.2 billion in 2012. Operators and publishers should expand the number of games they offer on a free trial basis: with the entry price barrier removed, a greater number of consumers may play the game and ultimately convert to being paid customers, according to Juniper Research.

Mobile Dating Revenues to Reach $1bn by 2012

17 Sept, 2007

Revenues from mobile dating and chatroom services are expected to pass US$1 billion by 2010, according to a new report from Juniper Research. Globally, the number of users of such services is expected to rise from just over 40m in 2007 to 260m in 2012, driven by strong demand in both developed and emerging markets, including more than 60m users in the Indian sub-continent.
According to report author Dr Windsor Holden, "Major brands such as Match.com and Webdate have recognised that customers are willing to pay a mobility premium for 24/7 access to these services and are increasing deploying mobile applications to complement and enhance their existing offerings."
Holden added that the sector was also becoming increasingly attractive to start-ups seeking to launch cross-platform services from the outset.
"The increasing proliferation of 3G handsets and a mean that companies are increasing confident of introducing converged services at the outset. Furthermore, those companies which embrace such a strategy - such as Flirtomatic - are experiencing significantly higher levels of traffic from their WAP users than from their users on the fixed internet."
The report cautions, however, that usage was being retarded in many territories by excessive and confusing data pricing, stating that the high costs of data - particularly for prepaid customers - were continuing to act as a disincentive for regular usage and more widespread adoption.
Other findings from the report include:
At the present time, the largest mobile dating markets by user numbers are Japan and India.
The low level of fixed penetration in India, and the increasing tendency in the country to use mobile services directly as an aide not merely for dating, but for marriage, suggests that overall penetration here will be significantly higher than elsewhere in the world
Many customers will use mobile dating as an adjunct to, rather than instead of, their fixed internet dating services