Data services revenue to exceed $330 bn by 2013

Value Added Services(VAS), especially data services will play a crucial role in the mobile services revenue in the next 3 years. According to a latest forecast from Informa Telecoms & Media, total mobile service revenues will exceed $1 trillion in 2013, despite a projected fall in voice revenues.

The growth will be driven by VAS, primary data services rising to over $330 bn during that period, up from an estimated $208 bn in 2008. The growth is the result of telecos growing focus on VAS worldwide, to bridge the divide created by the fall in voice revenue following cheap call rates. In India VAS contributes around 10% to the overall revenue of telecom operators. Lately, the Indian telecom operators started focusing on VAS.

Illustrating the significance of data services to mobile operators, Informa predicts that data revenues and data ARPU in Japan will actually surpass voice revenues and ARPU in 2014. Informa projects that data revenues in Japan will reach $39.7 bn in 2014, and that monthly data ARPU will be $24.56, the highest in the world. Japan's NTT DOCOMO is the biggest and largest 3G operator wordwide. VAS revenue contributes 43-44% to the overall revenue of NTT DOCOMO.

Second-generation mobile technologies will account for 90% of the world's subscriptions, but by the end of 2012, this figure will fall to 70%, and by the end of 2014, over half of the world's 6.7 billion mobile subscriptions will be 3G and 3.5G+ technologies. Furthermore, Informa projects that by the end of 2014, 3.5G+ technologies will represent over a third of the total number of subscriptions.

“The backdrop to this transition in the industry is the fact that the Internet has started to dominate the landscape for new services and applications, and telecom operators are under increasing pressure to remain valuable and relevant in the eyes of their end-users,” says Mark Newman, Chief Research Officer at Informa Telecoms & Media.

These figures indicate that the quality and coverage of a mobile operator's network remains an important differentiator. The explosion of mobile broadband has renewed the significance of the network itself as operators market their mobile broadband services around the speed and geographical range of their network.

With global subscription penetration set to reach 92% in 2014, according to Informa's forecasts, and meaningful new growth only still available in rural parts of Africa and Asia Pacific, data service strategies are central to mobile operator strategies, both as a way to generate new revenues and to minimise the impact of churn at a time of intense competition between mobile network operators.

akhileshs@cybermedia.co.in