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Monday, September 6, 2010

Mobile networks will lose market share if they don’t take content seriously, says report

Are services such as Vodafone 360 here to stay?

The answer, according to the latest research from Analysys Mason, is a resounding yes. It's calculated that mobile content and applications influence $80 billion (£52 billion) of mobile spending.

The telecoms strategy company has estimated that $27 billion in annual voice, SMS and data revenue will ‘follow’ customers who are likely to switch between mobile operators on the basis of the mobile content and apps they're offered. Their calculations show that a mobile network operator with 35% market share in a developed market would lose 4% of its market share over the following five years if it stopped investing in its mobile content & applications proposition. Worse still, the total revenue impact would be over nine times the loss of direct revenue from mobile content & apps because of the indirect effects of losing market share and corresponding voice, SMS and other data service revenue.

Analysis Mason advises operators to carefully balance the need to generate direct revenue from mobile content & applications against the competitive benefits of offering a compelling service to the maximum number of customers. Jim Morrish, the Principal Analyst who leads Analysys Mason's Mobile Content and Applications research programme, said "Some elements of an MCA [mobile content and applications] proposition should potentially be regarded as loss leaders – ‘super applications’ that are core to engaging the consumer."

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