By end-2005, mobile operators will derive more revenue from content than third-party service providers, according to Ovum Research, with a 61 per cent share of global revenue, or a total of USD 22.3 billion. Conversely, non-operators will earn just USD 15.5 million from mobile content at end-2005, as opposed to USD 4 billion in 2002, when operators took a USD 6.1 billion slice of the pie. Operators need to keep up momentum, however, with Ovum analyst, Eden Zoller, noting that their cautious approach to premium content “meant they missed the boat with the first wave, … notably ring-tones and adult entertainment”.
In short, “operators cannot make the same mistake going forward and are making serious efforts to drive premium content”, Zoller says, adding that “if they keep up the momentum and continue to create user-friendly services, they will remain the dominant player”. Given new operator-led initiatives such as O2 Active, Vodafone Live! and T-Zones, Ovum anticipates operators to see a four-fold increase in revenues from information and entertainment services from USD 16.7 billion in 2003, to USD 77.8 billion by 2007. Premium values will also reach USD 15.8 billion by 2007 due to increased rich-content images and video.
Mobile entertainment will benefit from premium value, which is tipped to rise from USD 4.8 billion in 2003, to USD 25.6 billion in 2007, as opposed to USD 16.3 billion for traffic. In June, research firm, Analysys, predicted revenue for mobile messaging, content and entertainment in western Europe to rise from €12.5 billion in 2002, to €35 billion in 2008. However, operators and MVNOs (mobile virtual network operators) could lose up to 16 per cent of revenue if a less-than optimal pricing plan is effected, which could hit the ARPU of western European operators, as messaging, content and entertainment accounts for 12 per cent of their revenues.