Chris Lennartz, VP of Product Marketing at Airwide Solutions, offers his predictions for the mobile business in 2009
A wise man once said that predicting the future is the art of seeing the present logically extended. As December draws in and the end of 2008 approaches, its time again to be thinking about what the New Year will bring. Theres no doubt that for many, things are going to be tough in 2009, especially given the difficult economic crisis we find ourselves in. However, for the mobile messaging industry, things may not be quite so bad. Here are my top predictions for 2009.
1. Mobile messaging to defy the economic downturn
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 be seen as the lifeline to the mobile
industry, especially as mobile youth 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 state that the number of
people using SMS has increased 3.3% 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 $127 billion (86 billion) in 2008, to $212
billion by 2013. Whilst these figures are good news for the industry,
they also underline the need to ensure that an operators underlying
infrastructure is efficient, and equipped to support the increase in
traffic volumes over the years ahead.
2. 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 a low 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, the number of messaging users will grow with a rate of over 10% per year in countries in Asia, South America and Africa
3. 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 $16 billion in 2009. For this to happen, however, mobile operators must ensure that their infrastructure and marketing is equipped to target MMS. According to ZTE, the application-to-person MMS traffic in China makes up for 70% of all MMS traffic.
4. 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 Goods (FMCG) market that telecoms has become, differentiating on user experience is key. Customers will demand more from their operators, in terms of ease of use, convenience, status, fashion, security, safety, privacy and control, so differentiating the services an operator can offer through added features such as productivity and security-based SMS applications, like 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.
5. Mobile marketing and advertising surges ahead
Operators will continue to generate revenues through mobile marketing and advertising a development which, 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 something that consumers want to engage with. The new business model that this enables will help consumers keep up their SMS habits in economically-challenging times, by opting for ad-funded discounts.
6. 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% of consumers would substitute their PC-based Internet connection for their mobile. As the majority of new 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% of data ARPU already is attributable to the mobile Internet, due to partnerships with Google, YouTube and MySpace, and using widgets.
7. Focus on mobile security increases as mobile commerce comes of age
As mobile phones increase in sophistication, the value of the data they carry will mean that greater attention will 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.
At the moment. buying travel tickets and basic consumables via the mobile Internet has provced popular in Japan and Korea, but the trend is now moving to Europe and the US. An independent survey commissioned by Airwide Solutions found that 5.6 million people in the EU already access financial information from their mobile phones - a 24% jump from the same time last year. Although this is encouraging for the mobile industry, consumers must be aware of potentially dangerous fraudulent scams, such as phishing.
8. The digital youth drives changes in communication
The rise of social networks will continue, and this will impact upon 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 what the behaviour of the digital youth will lead to, as they have proved that they prefer social networking, blogging and text messaging, over voice. Will this lead to the end of the voicemail as we know it? According to Nielsen Mobile, the 13-17 age group in the US sends around 1800 texts per month, equivalent to 60 every day.
9. Mobiles go green
As more emphasis is placed on environmentally-friendly technologies, will greater attention be paid to handset recycling initiatives? Currently, only 1% of mobile handsets are recycled globally each year, even though 65 to 85% could be re-used. For recycling to be successful, however, mobile operators must have comprehensive EIR (Environmental Information Regulation) systems in place, to ensure that all mobile equipment is tracked and logged, and that any invalid handsets are blocked from operating on mobile networks.
Will I be right or wrong? Only time will tell. While it is very difficult to predict what the future holds, however, 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 a future-proof one that is prepared for the future.