|Issue:||Europe I 2009|
Timo Ahomäki is the Chief Scientist at Airwide Solutions. Prior to joining Airwide Solutions, he held several mobile value added service related executive roles at TeliaSonera, Finland’s largest operator. Before TeliaSonera, he worked at Nokia in product management for mobile data
The growth of mobile messaging (MM) – driven mostly by ‘mobile youth’ and less developed regions – seems likely to continue at a healthy pace. Multimedia Messaging Service (MMS) will lead the growth in China, but operators must increasingly personalise offerings to hold mature markets. Mobile advertising will boost operator revenues as will mobile broadband Internet access. The growth of mobile commerce will increase the need for security measures, and environmental issues will drive green initiatives such as handset reuse and recycling.
A wise man once said, “Predicting the future is the art of seeing the present logically extended.” As 2009 begins, there is no doubt it will be a tough year for many, especially given the current economic crisis. However, for the mobile messaging industry things remain positive. Recent research conducted by comScore M:Metrics revealed that the number of people sending text messages across the EU is growing 3.3 per cent year on year, a figure only beaten by MMS, which is growing by 9.2 per cent. Indeed, this reflects the theme for the Mobile World Congress 2009. Under the banner of ‘think forward’, leaders in mobile messaging will explore the challenges facing the industry and how these can be leveraged to create new opportunities and drive productivity and prosperity going forward. As we all prepare for Mobile World Congress, here are my predictions for 2009… Mobile messaging to defy economic downturn Mobile messaging will continue to grow despite the current downturn in the global economy. As mobile data revenues increase and voice revenues are under pressure, mobile messaging will become the lifeline of the mobile industry, since mobile youth, especially, regards it as cheap, fast, private, easy and silent. It will fuel the growth in mobile data services and will in turn steer mobile operators, device OEMs and content providers through the tricky times ahead. Our predictions support recent figures from M:Metrics, which show that the number of people using SMS has increased 3.3 per cent year on year across mature markets like the UK, Germany, France, Italy and Spain. This supports recent figures from ABI research which state that revenues from mobile messaging will grow from US$127 billion in 2008 to US$212 billion by 2013. Whilst these figures are good news for the industry, they also underline the need to ensure that an operator’s underlying infrastructure is efficient and equipped to support the increase in traffic volumes over the years ahead. Less developed regions to fuel peaks in SMS activity Most new subscribers to mobile services will come from less economically developed and newly industrialised regions, many of whom have little disposable income. Most of the phones shipped to these markets have little more than voice and text capabilities, so the growth potential for SMS in these markets will be significant. According to ABI Research the number of messaging users will grow at a rate of over ten per cent per year in Asian, South American and African countries. China fuels MMS uptake The use of MMS will continue to grow especially in China where MMS is booming. Its growth will be helped by ever improving handsets and the demand for user-generated content, blogging, social networking and mobile marketing. Juniper Research predicts revenues from MMS to top US$16 billion in 2009. However, for this to happen, mobile operators must ensure that their infrastructure and marketing is equipped to target MMS. The application-to-person MMS traffic in China, according to ZTE, amounts to 70 per cent of all MMS traffic. Personalisation comes of age In the Western world, we expect much of the growth in mobile messaging to come from personalised services, as in the Fast Moving Consumer Good (FMCG) market that telecoms have become, differentiating the use’s experience is of primary importance. Customers will demand more from their operators in terms of ease of use, convenience, status, fashion, security, safety, privacy and control. Differentiating the services an operator can offer through added features such productivity and security-based SMS applications as out-of-office, auto-forward, storage/back-up capabilities and messaging firewalls will be key to not only enhancing the mobile experience, but also increasing messaging ARPU and offsetting generic price decline on SMS and MMS. Mobile marketing and advertising surge ahead Operators will also continue to generate revenues through mobile marketing and advertising – a development that in 2009 will see the introduction of location-based mobile advertising. The key to success will be to incorporate a multimedia and multi-platform approach to ensure that it becomes a natural and valuable extension of the consumer. The new business model that this enables will help consumers keep up their SMS habits during economically challenging times by opting for advertisement-funded discounts. Mobile Internet overtakes PC based Internet use The use of the mobile Internet will increase significantly by the end of 2009. According to IBM, more than 50 per cent of consumers would substitute their PC based Internet connection for their mobile. As the majority of new mobile phones come with Internet access as standard, we predict that more people will access the Internet from their mobile than their PC by the end of 2009. According to T-Mobile Germany, browsing on iPhones was 30 times more than on other handsets, and at Vodafone Germany 45 per cent of data, average revenue per user, already comes from mobile Internet due to partnerships with Google, YouTube and MySpace and using widgets. Focus on mobile security increases as mobile commerce comes of age As mobile phones, especially smartphones, increase in sophistication, the value of the data they carry will require greater attention be paid to mobile security. Subscribers will expect mobile operators to take greater security measures to protect their personal data such as social security numbers, PIN codes, passwords, company financial data and other proprietary data – and this emphasis on security will become more important as mobile commerce takes off. At the moment, buying travel tickets and basic consumables via the mobile Internet is popular in Japan and Korea, and the trend is moving to Europe and the US. An independent survey found that 5.6 million people in the EU already access financial information from their mobile phones – a 23.6 per cent jump from the same time last year. Although this is encouraging for the mobile industry, consumers must be aware that this growth attracts potentially dangerous frauds and scams such as phishing. The digital youth drives changes in communication The rise of social networks will continue and will influence mobile messaging traffic as more and more people use their mobile phones to update their profiles remotely and blog on the move. It will be interesting to see where the behaviour of digital youth will lead, as they have proven that they prefer social networking, blogging and text messaging to voice. Will this lead to the end of voicemail as we know it? According to Nielsen Mobile, the 13-17 age group in the US sends around 1,800 SMS per month, that is 60 SMS per day… Mobiles go green As emphasis on environmentally friendly technologies grows, will greater attention be paid to handset recycling initiatives? Although only one per cent of mobile handsets are recycled globally each year, 65 to 85 per cent could be re-used. However, for this to be successful, mobile operators must have comprehensive EIR (Equipment Information Register) systems in place to ensure that all mobile equipment is tracked and logged, and any invalid handsets blocked from operating on mobile networks. Will I be right or wrong? Only time will tell. However, while it is very difficult to predict what the future holds, it benefits mobile operators to prepare by ensuring that their infrastructure is flexible and scalable. By breaking down traditional messaging infrastructure silos into separate, scalable tiers, operators can respond to market conditions and launch new services as and when they need to, to meet customer demand. They can take advantage of all the revenue benefits of rolling out new messaging types while mitigating the risk of building a dedicated infrastructure for an unproven messaging type. Many operators are already taking these steps and will find that they have transformed their legacy infrastructure into one that is prepared for the future.