Juniper Research: Operator mobile content revenues could rise to $52 billion in 2013 if they move towards a smart pipe business model

A new study from Juniper Research titled “Mobile Content Strategies & Business Models: Scenarios & Forecasts 2008-2013″ has found that mobile operators need to fundamentally change their mobile content business models in order to avoid becoming “dumb pipes” in the future. Only if they can transform their businesses into “smart pipe,” can they significantly increase their income from mobile content estimated at $23 billion in 2008, rising to $52 billion by 2013.

The global mobile content market will be worth $167 billion by 2013, shared among players such as mobile operators, content providers and third parties like content aggregators and billing companies.

At the moment, mobile operators take a significant percentage of the revenues generated by content providers and this has resulted in high prices for end-users who are deterred from accessing mobile content on a wider scale. Some content providers have even attempted to bypass operators or exit the sector altogether.

The report author Andrew Kitson argues that there’s no single winning scenario 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,” he added.

The idea is push operators toward changing their ARPU-driven mindsets to focus on value creation and support for their partners.

Other findings include:

• Under the “Smart Pipe” model, operators 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 the operators.
• Third parties, especially aggregators and billing service providers, will come under pressure from larger players 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. More information is available on Juniper’s website.