www.idate.org
The European way to think the Digital World
Mobile Services
Vincent Poulbère
IDATE - Head of mobile service team
New stakes for mature mobile markets
www.idate.org
 Low net growth of customer bases in mature markets : the retention of existing
customers is the key – rather than gaining new ones
 The market for mobile voice telephony is now growing slowly due to a still decrasing
voice ARPU…
 … however revenues from mobile data services (mostly SMS) now manage to
stabilize ARPU in several European markets
Western Europe mobile revenues (Billion EUR)
160
137 Billion EUR
140
120
100
119 Billion EUR
112 Billion EUR
26%
17%
14%
Growth
60
Data: +27%
Voice +3%
40
20
Data
Voice
0
2002
2003
Source: IDATE
80
2007
 From now on, mobile market growth in Europe is almost entirely based on data
service growth
20 Nov. 2003
IDATE © 2003
Winning Services 3: Mobile Services
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Mobile data service market:
preparing the "after SMS"…
www.idate.org
 2002 revenues from the Western Europe mobile data service market reached
15.6 billion EUR…
 … with 87% of revenues coming from SMS services
"TOP-FIVE" revenue-generating services in Western Europe
Rank
1
2
3
4
5
Services
Revenues 2002
 Person-to-person text messaging (SMS)
 3.4 EUR/month per subscriber
 Turnover 2002: 12 billion EUR
 Handset customisation services
 Ringtones, logos, …
 Leading mobile content service
 Turnover 2002: from 0.5 to 1 billion EUR
 Mobile communities services
 Turnover 2002: from 50 to 100 million EUR
 Chats, forums, FriendFinder, …
 SMS Premium voting services during « real
TV » shows
 Interactive SMS games
 Turnover 2002: 50 million EUR
 Turnover 2002: several tens million EUR
 Examples: "Trivial Pursuit", "who wants to be a millionaire?"
Source: IDATE
- The growth of the SMS market is now slowing down and the future potential is expected in
GPRS-based applications
- First positive signs in 2003 of the penetration of GPRS multimedia handsets and services
20 Nov. 2003
IDATE © 2003
Winning Services 3: Mobile Services
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… to tap in the potential mobile
multimedia revenues
www.idate.org
Revenues generated by mobile data services, in Western Europe (2000-2007)
Billion EUR
40
35.4
35
31.2
30
27.4
23.4
25
19.8
20
15.6
15
11.2
10
5.5
5
0
2000
2001
2002
P2P SMS
Java downloads
Mobile email
P2P: Person to person - A2P: Application to person
2003
2004
A2P SMS
P2P MMS
Modem / Mobile office
2005
2006
2007
Portals (except Java)
A2P MMS
Indirect revenues
Source: IDATE
 Mobile portals, MMS and corporate mobile services could constitute the growth
relays beyond the success of SMS services.
20 Nov. 2003
IDATE © 2003
Winning Services 3: Mobile Services
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Is the European mobile industry at a crossroad
between a messaging-based industry and a content-based industry?
www.idate.org
 Europe is still largely dominated by interpersonal messaging revenues, due to the
huge success of SMS…
 … while Japan is now largely dominated by revenues generated from browsing and
content services, 4 years after the launch of i-mode
 As the European mobile market matures, will it get progressively dominated by
content-based services?
Europe mobile data revenues (2002)
NTT DoCoMo: structure of i-mode revenues
(Q1 2003)
Interpersonal
Contentbased
service
revenues
24%
Source: IDATE estimates
messaging
revenues
(email)
12%
Interpersonal
messaging
revenues
76%
20 Nov. 2003
IDATE © 2003
Other
revenues
(access,
brow sing,
content)
88%
Winning Services 3: Mobile Services
Source: IDATE
2006/2007 evolution?
5
4 key areas driving the development of future
mobile services … with different challenges for the industry
www.idate.org
Main challenges
Examples

Person-to-person
(P2P) messaging





Content services




M-payments


SMS
MMS
Instant messaging
Email
push-to-talk

Premium SMS
WAP/i-mode portals
Content-based MMS
Java application downloads

Micro-payments: parking,
logos/ringtones, transport tickets
Macro-payments
Prepay top-ups

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



Corporate
services




20 Nov. 2003
Mobile office
Field/Sales Force Automation
Mobile CRM,
Fleet management
M2M
IDATE © 2003


Manage the diversification of interpersonal
messaging applications: what impacts of
new IP-based messaging services on
SMS and voice revenues?
Achieve interoperability !
Define attractive content payment models,
in addition to traffic, which will foster the
creation of services by third parties
Push customers to buy the right handsets
for rich-content services
Overcome the complexity of the value chain
by establishing key partnerships between
telecoms players and finance players
Legal constraints, still to be accurately defined
Build interoperable payment applications
Underexploited market for corporate mobile
data solutions, compared to voice
Difficulties to meet corporate customers’
requirements in terms of tariff plans, security,
application reliability, data rates, ROI
Winning Services 3: Mobile Services
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Key questions to feed the debate
www.idate.org
 Question mark on photo messaging prospects: photo cameras boost the sales of
mobile handsets but does it boost in the same proportion traffic revenues for
operators ?
 SMS revenues are jeopardized by the introduction of other messaging services (e.g.
email or instant messaging). How will operators manage the diversification of
messaging services?
 Various Premium content access services based on reverse billing have been
introduced: from the “supermarket” to the “commercial gallery”, which will be the
winning models ?
 Wi-Fi: what is the size of the Wi-Fi hot spots niche market ? and what is the impact
of the implementation of Wi-Fi hot spot networks on the 3G business model ?
 What service migration strategies should be implemented for 3G ?
 Strong control of the value chain by mobile operators, with the development of
kiosks… but with which durability ?
20 Nov. 2003
IDATE © 2003
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