Digital Lifescapes

Machine to machine (M2M) applications growth continues on an upward trajectory. Cellular M2M connections are set to reach over 450 million by 2018, according to the latest market study by ABI Research. Europe dragged down worldwide connection growth in 2011 and 2012 to the high teens, but with improving world economics connection growth will accelerate to a CAGR of 26 percent through 2018. However, recent connection growth has come in the face of declining connection ARPUs. "The market for M2M connections can be classified as very competitive to hyper-competitive depending on the country," said Dan Shey, practice director at ABI Research . As a result, connection ARPUs have declined dramatically over the last two years as operators fight for M2M business. Contributing to the pain of declining ARPUs has been slower than expected migration to 3G and 4G technologies which offer better margins per megabit of traffic. Over 70 percent of cellular M2M connections were on...

Mobile networking service providers are good at providing basic connectivity, but they typically fail to deliver value-added services (VAS) that their own subscribers need or want. According to the latest market study by Informa Telecoms & Media, mobile network operators will see their share of mobile content and commerce-related revenue drop from 44 percent in 2011 to 31 percent in 2016 globally. The telecom service provider market share will shrink in areas such as mobile music, mobile games, mobile TV or video, mobile messaging, location-based services and chat or social networking over the next five years. These new services will increasingly be provided over the top (OTT) by third parties that specialize in these creative offerings. According to Informa's assessment, this fall in market share would be more precipitous if it wasn't for the growing role that operators will play in mobile app payments. The app stores have unseated the operators from their former ...

Latin America outperformed other regions of the world in mobile revenue growth for the period between the first quarter of 2010 to 1Q 2011, according to the latest market study by ABI Research . In terms of total aggregate service revenue, Latin America grew at 17 percent -- while in comparison North America achieved just 8.9 percent growth. The primary ingredient in the region's revenue upside is largely attributable to increased mobile phone service subscriptions and average revenue per users (ARPU). Latin America witnessed an 11.9 percent increase in mobile service subscribers while attaining a 5.9 percent increase in ARPU -- holding 2nd in position behind Eastern Europe, for the same period. Most region's ARPU declined while North America and Western Europe only had meager gains. "Contrary to popular belief, Latin America is the rising star of the telecom market" says ABI research associate Lim Shiyang. "With increasing affluence in Sou...

Mobile penetration and rapid adoption of broadband access continue to boost total service revenue for wireless operators, but the dilution of Average Revenue Per User (ARPU) -- due to multi-SIMs -- is a cause for concern, according to the latest market study by ABI Research . Market data shows that 4Q-2010 has seen an increase of $1.4 billion quarter-on-quarter or 2.2 percent growth for Asia-Pacific total mobile service revenue. However, 4Q-2010 ARPU showed a decrease of 2.1 percent from 3Q. "The overall contraction of ARPU is largely caused by the continued expansion of the subscription base, where remarkably one in five is a newly-added subscription that was not around a year ago," said ABI Research practice director Neil Strother. More mobile network operators are looking for new ways to generate revenue, which include adding new interactive value-added service (VAS) applications such as mobile TV, mobile payments, mobile wallet, airtime transfer or even free music d...

Driven primarily by the needs of broadband service providers who seek ways to differentiate their Internet access offerings, the residential gateway market continues to gain in importance within the home networking infrastructure market. Telecom service providers have embraced the gateway concept, and gateway vendors have enjoyed success in shipping gateways. According to the latest market study by In-Stat , they forecast that residential gateway shipments will surpass 50 million units in 2011. "Many more telco service providers are supplying residential gateways instead of DSL broadband modems, not only for those customers requesting gateways, but also, at times, to create opportunities for future service add-ons and to better manage their customer networks," says Vahid Dejwakh, Industry Analyst at In-Stat. The residential gateway market continues its global dominance, due to telco provider's preference for multimedia gateways over basic modems -- because gateways ...

Consider this U.S. retailer scenario. A customer calls a store about product availability. The product isn't in stock, so the in-store salesperson enters the consumer's mobile phone number into an automated alert system -- whereby an SMS message is sent to the consumer when the product is re-stocked. The consumer replies by SMS, and the product is put aside -- awaiting pick-up. If you live in the United States, when has a retailer offered this simple value-added service to you? Yes, it's a rhetorical question. I've been asking similar questions since I wrote a related editorial for Telephony magazine -- way back in 2004. Fast-forward to today. eMarketer reports that tech-savvy shoppers place great demands on multichannel retailers. A majority expect to be able to track, modify, complete and order from any channel -- according to a July 2010 survey from Sterling Commerce. Busy consumers expect "smart-shopping" options: from product research to purchase...

The arrival of innovative high-powered multimedia consumer devices -- such as the Apple iPad tablet -- is raising consumer UI expectations and driving cable network operators to demand more sophisticated set-top boxes (STBs) from equipment suppliers. This emerging trend will have a significant impact on the legacy STB sector over the next several years, according to the latest market study by Heavy Reading . "The STB, the primary cable component inside millions of U.S. homes, is morphing, expanding, and extending itself with new features and functionality," notes Craig Leddy, research analyst at Heavy Reading. "By utilizing the best capabilities of each device platform, a cable MSO can tailor its services to meet individual customer interests." The new range of options is stretching and redefining the traditional meaning of the set-top box, Leddy says. "Emerging devices are helping cable to serve multiple screens and add more interactive and on-demand fea...

Worldwide cellular wireless M2M (machine-to-machine) connections are growing steadily, and are expected to exceed 297 million in 2015. According to ABI Research , their prior forecast of about 225 million connections by 2014 has now been raised to 232.5 million. However, there are many regional differences in the growth pattern. Europe continues to account for the largest regional share with 110 million connections in 2015; North America will rank second with 79 million and the Asia-Pacific region third with almost 66 million. "The major world regions show different drivers for cellular M2M markets. The European market is the most diversified and has the most mature deployments. The EU benefits from regulatory mandates surrounding eCall and smart energy," said Sam Lucero, practice director at ABI. In North America the focus has traditionally been more on telematics, although M2M is now growing strongly in other areas including smart energy. Both telematics and energy ar...

The wireless hotspot market continues to experience strong growth in deployed venues and usage, driven by broadband service providers embracing Wi-Fi both as a competitive differentiator and an enhancement to their core access services. Despite the continued growth, the underlying hotspot business model has been in a continuous state of definition and development over the past decade, and remains a primary uncertainty in the future, according to the latest market study by In-Stat . "We are a decade into the introduction of hotspot services and the market is still working out the revenue model," says Amy Cravens, Market Analyst at In-Stat. Initially the market was based on pay-as-you-go revenues, with providers hoping it would evolve into ongoing subscriptions and corporate accounts. However, there has always been a free access component -- as branded hotspot venues like McDonald's and Starbucks have made free access pervasive -- it's now uncertain if this acti...

The U.S. will add more mobile users -- about 80 million subscribers -- than any other developed nation. As a result, mobile revenue will surpass all wireline services by end of 2015, according to the latest market study by Pyramid Research . With an estimated $362 billion in service revenue in 2010, the U.S. will continue to be more than twice as large as the next most sizable markets -- Japan and China -- throughout the forecast period. Over the next five years, Pyramid expects total communications service revenue to grow at a CAGR of 2.53 percent to reach $410.2 billion in 2015. By 2015, mobile broadband computing will comprise about 40 percent of total mobile subscription net adds. "We believe embedded 3G, WiMax, and LTE devices, including M2M communications, e-readers, and telematics, will continue to drive adoption after the market exceeds 100 percent penetration," says Ozgur Aytar, Research Director at Pyramid Research. All of the major broadband service provi...

Emerging markets will be the key driver in the growth of global mobile value-added service (VAS) revenues from $200 billion in 2009 to $340 billion in 2014, according to the latest market study by Informa Telecoms & Media . China, India, Indonesia, South Africa, Nigeria, Egypt, Turkey, Israel, Saudi Arabia, Brazil, Mexico, Argentina, Russia, Poland and the Ukraine are expected to account for 36 percent of the global mobile data revenues in 2014. “Compared to the developed world, there are very different economic, social, demographic and cultural challenges in the emerging markets. In many countries, 3G services are still not available, or are limited to mobile subscribers in larger cities," according to Shailendra Pandey, senior analyst at Informa. Therefore, operators have to depend on 2G services such as SMS, USSD (Unstructured Supplementary Service Data) and IVR (Interactive Voice Response) systems, to be able to drive mass market adoption of their mobile VAS, and to ...

Both the fixed and mobile broadband service provider markets will continue to grow in revenues -- up to $416 billion in 2020 -- according to the latest market study published by the Telco 2.0 Initiative at STL Partners . Their report finds that broadband service providers will benefit from both new types of broadband wholesale and more sophisticated direct-to-consumer retail propositions and service tariffs. They believe that recent introductions of new tiered and capped wireless Internet data plans are early evidence of this trend. Key findings from the Telco 2.0 report include: - Global broadband access is forecast to increase from $274 billion in 2010, to $416 billion in 2020, an increase of 52 percent in revenue terms. - More than half the revenue growth will come from wholesale and two-sided fees for improved access capacity and quality. - By 2020, mobile broadband will be worth $138 billion, or 32 percent of the total broadband industry revenues. - Three new revenue s...

More service providers are evolving their business model to include "Smart Pipe" offerings. The market for consumer Broadband Value-Added Services (BVAS) grew by 30 percent during 2009 based on revenue gains and by 13 percent in subscribers, according to the latest market study by Point Topic . The run rate for consumer BVAS revenues went from $39.6 billion to $48.9 billion during 2009. This was a greater rate of increase than that for consumer broadband lines which grew 14 percent -- from 366 million to 417 million from Q408 to Q409. For comparison plain broadband access subscription revenues increased from a run rate of $113 billion at the end of 2008 to $129 billion at the end of 2009. In that context, BVAS revenues contributed an extra 37.9 percent to standard access revenues by the end of 2009. "Value added services, like VOIP, security and IPTV grew more quickly than the number of broadband lines in 2009. The operators and ISPs are starting to increase the pr...

In the last twenty years, few industries have grown as fast as the worldwide market for mobile phone services. Having recorded a staggering 3.9 billion subscriber additions between 2000 and 2009 -- a compound annual growth rate (CAGR) of 23.3 percent -- the worldwide mobile subscriber base is forecast to increase from 4.6 billion in 2009 to 7.5 billion by 2020, according to the latest market study by Portio Research . This subscriber growth has propelled worldwide mobile penetration from 11.5 percent in 2000 to pass 64 percent by 2009 -- and by 2020 it is forecast reach 94 percent. Up until 2000, Europe dominated the worldwide mobile market -- in terms of subscriber numbers -- but shortly thereafter Asia Pacific replaced Europe as the world leader and has continued to remain so in terms of subscriber base. However, now Africa and Middle East are adding mobile phone subscribers to the worldwide base much faster than any other region. Since their 1992 launch, mobile value added...

The iPhone, from Apple, increased the market awareness of value-added service (VAS) mobile applications. These applications and associated "app stores" are becoming the next mobile sector market development opportunity. However, most new mobile applications require smartphone capabilities, limiting their potential market. Moreover, a new architecture that applies a cloud-based model could drastically change the way mobile applications are developed, acquired, and consumed. According to the market study from ABI Research, mobile cloud-based services will be disruptive and could eclipse the current mobile application model by 2014, delivering revenue of nearly $20 billion annually. "Mobile application developers today face the challenge of multiple mobile operating systems," says ABI senior analyst Mark Beccue. "Either they must write for just one OS, or create many versions of the same application." More sophisticated apps require significant processing pow...

What are must-have features on mobiles? Digital camera functionality, bluetooth connectivity, and music or radio playback are the top three features that consumers consider essential for their next mobile phone, according to the latest market study by ABI Research. The camera phones with 2+ megapixels leads the most desired list, with 47 percent of consumers listing this feature as a must-have, followed by bluetooth at 34 percent and music or FM radio functionality at 32 percent. The survey results identified some surprising differences between markets. Camera phones, for example, were more than twice as important for consumers in Taiwan versus those in the U.S. Similarly, bluetooth is considered essential by mobile subscribers in Western Europe and Taiwan, but penetration of this feature is very low in Japan and South Korea, so it's of little importance to consumers in those countries. Regardless of all the interest in advanced features, consumers across all mature markets still c...

ComScore released the latest figures from the M:Metrics Benchmark Study which reports that photo messaging from mobile phones has grown 60 percent in the United States over the past year and 16 percent in Europe, where photo messaging got an earlier start. "Summer vacations provide the perfect context for photo messaging, as the utility of instantly sharing a holiday moment with loved ones is undeniably compelling," commented Mark Donovan, senior vice president,comScore Mobile Products. "The cameraphone could replace the postcard as the preferred mode to say wish you were here, as even parents and grandparents are snapping and sending photos from their mobile devices." In Europe, where photo messaging is more mature, usage rates are more consistent throughout the year, rising only slightly in summer. From 2006 to 2007, the rate of photo messaging use in Europe during the month of July was average and in August, 7 percent higher than average. Instead, usage spikes du...

In 2007, North America generated 81 percent of the world's Location Based Services (LBS) revenue. In 2013, that percentage will be just 32 percent. In the same period, Western and Eastern Europe's combined LBS revenues will jump from just 5 percent to 31 percent. The Asia-Pacific region, meanwhile, will see a rise from a 2007 share of 11 percent, to 27 percent. "Location based services are not a zero-sum game," says ABI Research principal analyst Dominique Bonte. "It's not that Americans will lose enthusiasm for LBS. These changing shares of global LBS revenue just reflect the fact that a market which for technical reasons has been largely restricted to North America, will finally grow strongly in other world regions." LBS's slow uptake outside North America has had everything to do with the fact that unlike the CDMA phones so prevalent there, which have utilized GPS to comply with the United States E911 regulatory mandate, the GSM handsets owned by ...

The worldwide shipment growth of personal navigation devices (PNDs) was higher than anticipated last year, with shipments reaching 30.7 million in 2007, up from 13.3 million in 2006, according to the latest market study by In-Stat. The main drivers for this growth were price declines, efficient volume availability through the retail channels during the holiday season, enhanced functionality, and stronger consumer demand for navigation overall. "However, the PND market faces strong competition from both mobile phone handset navigation and embedded automotive navigation systems," says Stephanie Ethier, In-Stat analyst. "In particular, vendors in handset navigation are starting to offer a number of value-added services, such as pedestrian navigation, offline navigation, and searches for local points of interest." Their research covers the worldwide market for personal navigation devices. It offers a revised PND forecast that takes into account market developments that ...

According to Portio Research, in 2007 wireless operators worldwide generated more than $800 billion in mobile revenues. This is expected to reach $1,094.9 billion by year-end 2012, growing at a compounded annual growth rate (CAGR) of approximately 6.4 percent. The $1-trillion mark is expected to be reached by year-end 2011. Although a rapidly growing subscriber base has led to growth in revenue for the mobile phone services industry, operator margins have shrunk over the years. Operators worldwide, faced with declining average revenue per user (ARPU) due to falling voice tariffs, are now looking at ways to counter smaller margins by building alternative revenue streams through mobile data services. Voice services still make up the lion's share of mobile services revenues -- in 2007, voice services accounted for approximately 81 percent of operator's total mobile service revenues worldwide. However, with an ever increasing focus on non-voice mobile services, this figure is fore...