mobile operators what growth for tomorrow ?

The mobile operators’ traditional services are declining and the pressure set by new players tends to modify the market structures.

The telecommunications market is experiencing fierce competition. On the one hand, the operators are subject to the decrease of “voice” revenues (-39% in Europe between 2006 and 2010 for switched voice, -5% for mobile voice) and the drop in the SMS tariffs (-50% in the SMS revenues in Europe by 2011). On the other hand, they must face competition from new entrants like Internet giants. Their ambition is to expand on a de-regulated basis in the communication services market. Google offers videoconferences to SMEs, Skype offers VoIP to large corporations… The media industry itself is breaking into this market on the content side, making the environment much more complex and tougher. These evolutions compel the operators to explore new concepts of products and services to secure their present sources of revenues and create new ones.

Open up to new geographical territories

Developed countries markets are mature. International operators now turn towards emerging markets that represent a strong growth potential. Almost 70 % of the revenue increase is generated in emerging markets (India, China, Africa, Middle-East, and Latin America).

Sub-Saharan Africa has experienced the strongest growth rate in mobile telephony worldwide (+34 million subscribers in 2005; 90% which are prepaid), but it also remains the area where fixed and mobile and Internet services penetration rates are the lowest.

Meet new niche specific requirements

Some market segments still are to be developed. Senior citizens or health disabled groups must compensate for their relative handicap and new mobile services are having a real potential value. Children also constitute a potential target: security, geolocation as many dedicated offers in Asia seem to be proving it. “Hyper urban” people, living in large cities and over-equipped with high-tech products, want personal communication innovative services, and easy access to mobile contents. Seniors citizens (55 years old and over) favour simple use. Operators now consider the necessity to tune their offers according to these new niches.

Highlight content monitoring over cell phone

Content provisioning generates important revenues for mobile operators: the contents market on mobile in Europe is estimated at 9 billion euros in 2010. Operators offer music, games, pictures or video. There are two possible positionings: contents broadcasting (management of catalogues of offers, aggregation within thematic portals) or contents production. Few operators are on this latter niche. It enables to strengthen the operator’s positioning on the contents value chain and to capture an important part of the contents market growth. In both cases, operators must have specific matching skills (e.g. DRM negotiation power, mobile web applications, mobile VOD and TVOD, podcast…).

Leverage from the “contactless” technology development

The contactless technology offers wide potential to operators. Worldwide revenues of contactless mobile services should quadruple within 5 years and reach 27.7 billion euros in 2011. This boom can be explained by the development of next-to-your-door services (e.g. shopping, home and personal services, m-payment). In addition, the development of these technologies in the distribution and transports industries should make them commonplace in our daily life. Advantages to operators: strong increase of mobile uses and revenue through 3G+ widespread networks, enhancement of customer loyalty, M2M and geolocalisation huge prospects in daily life (health, transport, shopping, security…).


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