A new iSuppli report details the strategies carriers need to adopt to benefit from soaring wireless data revenues
A new report from researcher iSuppli suggests that the now-prickly relationship between Apple and Google is directly related to the continued rise of wireless data revenues and the desires of all major parties to grab as large a portion of this as possible.
iSuppli estimates that global revenue for wireless data services, not including messaging, will reach $87.7 billion (£53bn) by the end of this year, representing a growth of 26.2 percent. Continuing to climb, revenues are expected to reach $127.1 billion in 2011 and $188 billion by 2013.
Revenue for services offered by wireless carriers, however, is expected to remain flat, at approximately $866 billion this year.
“The explosive growth in wireless data service revenues, mobile applications and smartphone device unit shipments during the past two years is spurring a dramatic shift for the global cell phone industry,” said iSuppli’s Jagdish Rebello, in a statement.
“Companies including Apple, Google, RIM, Nokia and Microsoft are trying to muscle in on the wireless carriers for a share of the lucrative and growing mobile premium content, service and application pies. Regardless of who wins, this battle will alter the balance of power in the mobile value chain.”
Apple recently rejected Google Voice — a software offering no-fee calling in the United States along with features such as short messaging service (SMS) and voicemail with transcriptions — from its App Store. Apple offered no reason for the rejection, leaving many to speculate that the move was a result of pressure from AT&T, currently the exclusive provider of the iPhone, which may have feared that the app could cut into profits.
According to Rebello, Apple’s rejection of the app illustrates the new fight going on over data revenues.
“Clearly, mobile data revenue is key to the continued health of wireless carriers and the cell phone value chain in the future. In this battle, ownership of customers and who can monetise data services and applications are up for grabs,” said Rebello in the statement.
Applications and services that enable consumers to cut out the operator when they make calls or send messages, offer little incentive for operators to upgrade their networks, and explains why some carriers are delaying upgrades until 2010 or 2011, instead of this year or next, Rebello explains.
The report, “Mobile Operator Data Revenue Models,” details how, in order to sustain growing revenues, operators will need to develop a strategy around four central tenets that Rebello identifies as: monetising broadband access; working with the mobile value chain to offer compelling apps and content; offering revenue-generating services that take advantage of mobility; and developing next-generation apps through a leveraging of mature billing capabilities and customer trust.
Optimising revenue opportunities around mobile broadband access, service offerings and content and applications marketing are critical, Rebello warns, stating, “Failure to do so will result in contraction in data and total revenues, excessive subscriber churn and a slowdown in market development.”