Mobile data revenues are expected to triple between 2006 and 2011.
This is according to BMI-TechKnowledge's latest report "Enterprise & Consumer Mobile Data Applications Market" which shows that, despite the fact that mobile network operators still derive most of their revenues from voice calls, data will eat into the total revenue pie at an increasing rate as voice tariffs come under fire, and operators seek new revenue streams.
"The contribution to total operator revenue, excluding equipment, is forecast to grow from 6.4% in 2004 to 17.4% in 2011," says Tertia Smit, telecoms analyst and author of the report.
"Other than SMS, this will mainly be driven by multimedia content downloads and mobile broadband access over handsets and PCs," she adds.
While SMS messaging continues to be the leading-edge data application, early indications of pricing erosion are beginning to emerge with pressure increasing over the forecast period due to the growing adoption of MIM, MMS and "Push to Talk".
Mobile Instant Messaging has taken off in South Africa through providers like MXit and this will continue to have a cannibalising effect on SMS ARPUs.
The report highlights that broadband Internet growth is being precipitated by an unprecedented level of participation of the two larger mobile cellular operators in the market, including aggressive promotion of HSDPA typified by Vodacom's free data card upgrades, in 2006.
"At the current rate of adoption, Vodacom and MTN are expected to overtake ADSL in terms of the number of connections in 2007.This local anomaly is also due to slower than expected rollout of ADSL, the supply of which is falling behind the demand," adds Smit.
In addition enterprise customers are the biggest users of mobile Internet access on laptop PCs, a key 3G application. In future BMI-T expects that the market for consumer content and entertainment applications will be stimulated to a similar degree.
The growth of the 3G user base, together with the increased accessibility and a more seamless experience is expected to promote the uptake of more advanced non-voice services (including MMS, video/TV, gaming, music, and mobile data) to reach high double-digit growth rates, an extremely positive sign for adjacent growth opportunities when compared to the expectation of an imminent single-digit CAGR for the overall mobile user base.
Mobile TV/video is one of the applications that is less price sensitive as an influential factor to adoption. Given the range of content that can be mobilised – news, sport, entertainment, weather, and adult content – there is a breadth of categories that will appeal to a large audience across all age and population groups.
However, in order for this market segment to continue to gain momentum and grow, quality and flow of new content is fundamental. As with MMS and IM, user-generated content is another area of potential growth that will assist in driving video adoption.
"Mobile triple play and convergence will become a focus point for mobile operators that want to offer a full range of bundled services, including interactive multimedia experience on a mobile device. Operators will push bundling of these services to new heights to drive data ARPUs higher over the forecast period," concludes Smit.