Monday, August 18, 2008



In 2007, operators worldwide generated more than USD 800 billion in mobile revenues. This is expected to reach USD 1,094.9 billion by year-end 2012, growing at a compounded annual growth rate (CAGR) of approximately 6.4 percent. The USD 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 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 operators’ total mobile service revenues worldwide. However, with an ever increasing focus on non-voice mobile services, this figure is forecast to decline to a little over 74 percent by year-end 2012.

In 2007, revenue from mobile data services accounted for approximately 20 percent of total service revenue in Western and Northern Europe; 15 percent in Central and Eastern Europe; 24.5 percent in Asia Pacific; 18 percent in North America; 10.5 percent in Latin America; 7 percent in Africa; and 11 percent in the Middle East. The contribution of non-voice mobile services to total mobile services revenues is expected to increase significantly over the coming years, across all regions.

Rather unsurprisingly, SMS contributes the largest share to total non-voice revenues and in 2007, SMS accounted for approximately 49 percent of worldwide mobile data services revenues. However, as other data services such as mobile music, mobile games, mobile e-mail, mobile instant messaging (IM) and mobile video gain popularity, the percentage contribution of SMS is expected to decline in the future, even though SMS traffic volumes will continue to grow worldwide.

In 2012, SMS is expected to contribute approximately 37 percent to overall data services revenues. Worldwide mobile data revenue is expected to increase at a CAGR of 16.2 percent, reaching USD 251.9 billion by end-2012 from USD 102.4 billion at end-2006. Although revenue from all data services is expected to increase, the fastest rate of growth is forecast to come from mobile video services (CAGR of 68.2 percent), followed by mobile IM (CAGR of 58.3 percent).

Video is the new media for the music industry and one that will see new bundled content delivered. Blue Pie is at the forefront of video and has completed agreements with over 10 of the global leaders for our catalogue to be serviced via our digital systems. This will expose all of our artists and labels to a greater depth of license opportunities and develop new fans much faster than we have enjoyed to date.

If you want to know more about the impact of video and what this can mean for you and your content then email us at

Thanks for reading this blogg.

1 comment:

Jake Barnes said...

The mobile companies strike me as uncertain about what their next business model is. They seem afraid of openness like that provided by the web, because they feel they can't profit from it. That leaves them the option of setting up walled-gardens, like AOL and Prodigy used to be, back in the early 90s. But the mobile companies seem afraid of that too, as they would then have to become content companies. Their resistance suggests to me that they lack the management talent to become content companies. That only leaves them the option of striking deals with content companies. This hasn't yet happened on a large scale - there are no hit products that have yet emerged for cell phones. Apple/TMobile are the only ones to come close, with their app store.

Blackberry just announced an app store for their products, and Google has recently announced an app store for Android. It's possible that the lack of an app store is what kept Symbian from taking off the way it should have - its OS was ahead of its time and would have made a good platform for the kinds of applications that we now see emerging for the Apple iPhone. It seems likely that the "app store" content is the way cell phones will be organizing sales for the next few years.

It is curious that similar attempts to create music and video stores for cell phones haven't yet taken off. Perhaps the pricing has been wrong, or the bandwidth too limited, or the interface too crippled?

I expect that one day a significant amount of music and video, possibly even the majority, will be sold via cell phones. The company that figures out the right interface for this wil have the biggest breakthrough app of any that will emerge from these app stores.

-- Lawrence Krubner