Diversify or die
Mobile operators should not expect 3G uptake to pass 50% penetration until 2010, when JupiterResearch forecasts there will be 184 million subscribers with 3G multimedia handsets in Europe in 2010, up from 5.1 million in 2004.
A JupiterResearch report warns that SMS revenues will decline from Eur5.1 billion in 2004 to Eur12.7 billion in 2010. Consequently, mobile operators must reduce their dependence on SMS for data revenues and seek to increase ARPU with content services if they want to improve return on 3G investments.
Despite the decline, mobile messaging will remain the dominant data service, accounting for 68% of data revenues by 2010, driven by new mobile messaging services such as MMS, e-mail and instant messaging. JupiterResearch projects MMS revenues alone will increase from Eur253 million in 2004 to Eur721 million in 2005, an increase of over Eur450 million.
Growth in personalisation and informational content will also grow respectively from 10% and 4% of data revenues in 2004 to 13% and 19% in 2010. Alongside the substitution of polyphonic ring tones by real tones, revenues from ring-back tones are expected to be the lead performer in the personalisation category during this period growing from Eur6 million to Eur717 million.
"Mass market adoption of multimedia 3G services, the next stage of the mobile revolution, has yet to take off at the same rate [as overall mobile phone adoption], hampered by the limited availability of small phones, lack of appeal around existing 3G services, incomplete network coverage and expensive, non-consumer oriented data tariffs," Thomas Husson, lead author of the report and mobile analyst at JupiterResearch, said.
"Whilst the 3G market matures, operators will not be able to rely on SMS revenues alone. Given their significant investment in 3G networks and licenses, mobile operators must look to diversify and grow their revenues by harnessing new services and offering compelling content for an increasingly sophisticated consumer," added Husson.
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