Informa: Mobile operators can look forward to a period of growth
By Dusan Belic on Tuesday, May 20th, 2008 at 4:48 AM PST In Research
According to the new report from Informa Telecoms & Media titled “Future Mobile Operator Business Models: Broadband, Partnerships, Wholesale and Mobile 2.0,” mobile operators in mature markets will need to adopt radical new business models over the next five years if they are to protect their profit margins.
On the other hand, emerging market mobile operators will continue to enjoy strong revenue growth in the short to medium term as they fulfil strong demand for basic connectivity. But even they will have to embrace new ways of running their businesses when growth inevitably slows.
Informa’s Chief Research Officer and author of the report Mark Newman suggests that mobile operators are hoping to compensate for the decline in voice revenues with new service offerings built during the last ten years. “But it’s been tough going and non-SMS data revenues have been disappointing”, he added.
The situation has improved over the last year or two with many operators reporting year-on-year revenue growth of 30-40% or more in non-SMS data services. However, the problem is in the paradigm shift that would see mobile operators basically becoming dumb pipes — moving away from a limited number of carrier-controlled services to Internet access.
That being said, mobile operators can look forward to a period of growth in mobile broadband connectivity. But to capitalize on this opportunity, operators need to invest heavily in new high-capacity networks only to become ISPs.
To avoid the fate of fixed-network ISPs, mobile operators will either need to partner with Internet companies and share revenues and/or develop the so called smart-pipe strategy, which involves “exposing” different parts of their networks to third party service providers and monetising access to them.
Advertising is touted as a lucrative new revenue stream which would complement an Internet access strategy. However, Informa does not believe that it will translate into a significant operator revenue stream within the next five years.
