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Back to Basics and the 3GSM World Congress

The mobile communications industry's frenzied efforts to reinvent itself as a mobile entertainment business will continue on at the 3GSM World Congress event in Barcelona, Spain.

This effort is despite the fact that the vast majority of global revenue growth -- both for the operator and vendor communities -- is coming out of developing markets where mobile is fulfilling a basic need for voice and text-based communications. It's essentially fueling a move back to the mobile phone business basics.

"The big story for the industry in 2007 is the continued growth of the global mobile population" says Mark Newman, Chief Research Officer at Informa Telecoms & Media. By the way, Informa is now forecasting 480 million net additions in 2007 with four out of every five new subscribers coming from a developing market. It's truly amazing.

"The mobile phone is driving social and economic development throughout the developing world," Newman adds. "Market growth is creating economies of scale which, in turn, is bringing mobile communications within reach of new, lower-income market segments."

Ironically this topic will not feature prominently at Barcelona. In the mature markets of Europe, North America and south-east Asia the search continues for the new mobile applications and revenue streams that will compensate for the stagnating voice business. This has been the main focus of the 3GSM World Congress over the last five to ten years and will continue to be so in 2007.

This year sees the Sundance Film Festival make its appearance at the 3GSM World Congress. With mobile TV also figuring prominently, the focus of this year's event will finally move away from 'devices and technology' to the content and images displayed over mobile phones.

Mobile television was already the hottest topic at Barcelona in 2006, but this year visitors will be expecting to see fully operational trials and compelling content -- rather than the slew of announcements and commitments that dominated last year's event.

"Mobile TV services over 3G networks have rolled out in a number of European countries over the last year" notes Nick Lane, principal analyst at Informa, "but none of them have really taken the market by storm," he adds. "There are still big questions that need to be answered about the viability of different technology platforms and -- more importantly -- the business models for mobile TV. People are going to want to see compelling content that consumers will be willing to pay for," adds Lane.

Mobile phone delivered advertising is a concept that has been explored within the mobile industry for a number of years but which finally appears to be gaining some traction. Informa forecasts that the mobile advertising market will be worth $11.3 billion by 2011.

"The sooner the mobile industry understands this emerging business model and its role within the advertising ecosystem, the sooner it can tap into that additional revenue stream," comments Lane.

"Operators have to generate user profiling that can be highly-targeted for the brands, and truly personalized for the consumer. Until this happens, mobile advertising will remain largely experimental." Frankly, I couldn't agree more, since it's apparent that the legacy 'push' model of irrelevant advertising on TV is the last thing that mobile subscribers want to see on their device screen.

As the mobile phone morphs into a device that can capture both TV and Internet content, interest is starting to grow in the user-generated content and social networking space. Last month UK magazine publisher Emap acquired YoSpace, owner of the SeeMe TV service which has successfully taken the user-generated content concept into the domain of mobile communications and devices.

On the technology side the rival mobile TV platforms will all figure prominently at Barcelona. In 2006 DVB-H emerged as the clear front-runner but this year we expect to see a lot of activity around other technologies because of the delay in releasing DVB-H spectrum across Europe.

These include the French-backed satellite platform DVB-SSP, Multimedia Broadcast Multicast Service (MBMS) and MediaFlo solution. Currently only a UK phenomenon, "BT's DAB-IP mobile TV solution is also expected to feature at this year’s event" according to David McQueen Informa principal analyst covering the handset space.

Although last year witnessed the launch of a number of TV-capable handsets by vendors covering the main broadcast technologies, Informa expects to see them put to better use this year through the broadcast of 'live' TV, thereby fully showcasing the user experience.

Many of the new devices unveiled at 3GSM this year will incorporate new high-speed 3G technology HSDPA. Mobile operators are hoping that HSDPA will bring to life some of the comatose value-added services that are already available over 3G.

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