Mobile Content Strategies & Business Models

Overview

This second edition strategic report investigates the current and future market opportunity for mobile content dissemination in three key scenarios; Smart Pipe, Dump Pipe and On-Portal and provides six year forecasts for eight key regions under each scenario.

For the Smart Pipe scenario it discusses how the network operators will benefit from increased levels of traffic and how third parties and billing service providers will have a much smaller part to play.  For the Dumb Pipe scenario the report considers the impact of effectively all retail revenue from mobile content going to the content provider.  For the On-Portal scenario, the report discusses the operators gaining all mobile content revenues, but also having to shoulder all costs for content acquisition, marketing/placement and billing.

Crucially, this report considers Apple's 'Apps store' model and sets this in context with the three scenarios discussing the various drivers and constraints as well as provides forecasting up until 2013 from the most recent ARPU figures available, split by voice and data.

Table of Contents

Executive Summary

1. Mobile Content Value Configurations

1.1 The Mobile Content Value Chain
1.1.1 Defining the Mobile Content Value Chain
Figure 1.1: The Mobile Content Value Chain
1.1.2 A Linear Approach to Delivery is Inadequate
i. Disaggregation Creates Value Networks
ii. From Value Networks to User-Centric Value Configurations
Figure 1.2: User-Centric Value Configuration Example
iii. Value Configurations will be Application-Centric
iv. Key Functions within Value Configuration
1.2 Key Success Elements for Value Configurations
1.2.1 Roles and Responsibilities
1.2.2 Partnership Management
1.2.3 Interoperability
1.3 Mobile Content Players
1.3.1 Types of Mobile Content Player
1.3.2 Customer Ownership
1.4 Value: Contradictory Views
Figure 1.3: The Reduced-Value Conundrum
1.5 MNOs Unable to Follow Consumption Patterns

2. Mobile Content Business Models

2.1 Business Model Fundamentals
2.1.1 A New Approach
2.2 Business Models: The Basics
2.2.1 Brokerage
2.2.2 Infomediary
2.2.3 Merchant
2.2.4 Direct-to-Consumer
2.2.5 Outsourcing
2.2.6 Advertising
2.3 Wholesale Business Models
2.3.1 Wholesale Helps Fixed Revenues Grow – What About Mobile?
2.3.2 Reversing Mobile Revenue Decline
2.3.3 Value-Added Wholesale Can Help
2.3.4 Three Types of Value-Added Wholesale Service

3. Mobile Content Revenue/Profit Models

3.1 Revenue Models
3.1.1 Usage-Based Charging is Inappropriate
i. Apple App Store Breaks The Mould
3.1.2 ARPU is an Inadequate Measure of Value
3.1.3 A New Revenue Model is Needed
3.1.4 The Operator-Push Revenue Model
Figure 3.1: Operator-Push Revenue Model
3.1.5 The Wholesale Pull Revenue Model
Figure 3.2: Wholesale-Pull Revenue Model (MNOs)
3.2 Profit Models: An Overview
3.2.1 AMPU Provides Better Margin Measurement
3.3 Retail Revenue/Profit Models
3.3.1 Multiple Approaches Can Work
3.3.2 Retail Mobile Content Charging Mechanisms
i. Flat-Rate Charging
ii. Event-Based Charging
Figure 3.3: Event-based Revenue Model
iii. On-Portal Charging
iv. Direct-to-Consumer Charging
3.4 Wholesale Revenue/Profit Models
3.4.1 The Role of Wholesale Mobile Content
3.4.2 New Wholesale Revenue Streams
i. Wholesale Mobile Content Service Layers
ii. The Wholesale Mobile Advertising Opportunity
iii. The Wholesale Mobile Search Opportunity
3.4.3 Wholesale Charging Mechanisms
3.4.4 Wholesale Revenue-Sharing
i. MNOs and Content Providers
ii. MNOs and Third Parties
iii. MNOs and End-Users
3.5 Apple, Nokia and Google Take a New Approach
3.5.1 Apple iPhone/Apple App Store
3.5.2 Nokia
i. N-Gage
ii. Nokia ‘Comes With Music’
3.5.3 Google/Android

4. Scenarios for Mobile Content Revenues

4.1 Future Scenarios and Player Types
4.1.1 Scenario 1: Dumb Pipe
Figure 4.1: Dumb Pipe Scenario Illustration, 2013
4.1.2 Scenario 2: Smart Pipe
Figure 4.2: Smart Pipe Scenario Illustration, 2013
4.1.3 Scenario 3: On-Portal
Figure 4.3: On-Portal Scenario Illustration, 2013

5. Cellular Market Growth

5.1 Introduction
5.2 Growth of the Cellular Market
5.2.1 Global Cellular Subscriber Market
Figure 5.1: Cellular Subscriber Growth (m) by Region, 2006-2013
Table 5.1: Cellular Subscriber Growth (m) by Region, 2006-2013
Figure 5.2: Cellular Subscriber Base, Market Share (%) by Region 2006-2013
Figure 5.3: Cellular Subscribers Penetration (%) by Region 2006-2013
5.2.2 Leading Mobile Operator Groups by Subscriber Base
Table 5.2: Leading Mobile Operator Groups by Subscriber Base (m) Q2 2008
5.2.3 Growth of 3G
Table 5.3: Global Cellular Subscriber Forecasts (m) by Technology (2G, 2.5G, 3G, 3.5G/3.9G) 2008-2013
Figure 5.4: Global Cellular Subscriber Forecasts (m) by Technology (2G, 2.5G, 3G, 3.5G/3.9G) 2008-2013
5.3 Regional Cellular Market Growth
5.3.1 North America
i. Mobile Phone Penetration
ii. US Market Structure
iii. 3G Adoption
Figure 5.5: North American Cellular Subscriber Forecasts (m) by Technology (2G, 2.5G, 3G, 3.5G/3.9G) 2008-2013
Table 5.4: North American Cellular Subscriber Forecasts (m) by Technology (2G, 2.5G, 3G, 3.5G/3.9G) 2008-2013
5.3.2 South America
i. Diverse Region
ii. Mobile Penetration Rates
iii. Dominant Technology
iv. Players in Region
Figure 5.6: South American Cellular Subscriber Forecasts (m) by Technology (2G, 2.5G, 3G, 3.5G/3.9G) 2008-2013
v. 3G Deployments
Table 5.5: South American Cellular Subscriber Forecasts (m) by Technology (2G, 2.5G, 3G, 3.5G/3.9G) 2008-2013
5.3.3 Western Europe
i. Mobile Penetration
Figure 5.7: Western Europe Cellular Subscriber Forecasts (m) by Technology (2G, 2.5G, 3G, 3.5G/3.9G) 2008-2013
ii. Market Structure
iii. 3G Penetration
Table 5.6: Western Europe Cellular Subscriber Forecasts (m) by Technology (2G, 2.5G, 3G, 3.5G/3.9G) 2008-2013
5.3.4 Eastern Europe
i. Mobile Penetration
Figure 5.8: Eastern Europe Cellular Subscriber Forecasts (m) by Technology (2G, 2.5G, 3G, 3.5G/3.9G) 2008-2013
Table 5.7: Eastern Europe Cellular Subscriber Forecasts (m) by Technology (2G, 2.5G, 3G, 3.5G/3.9G) 2008-2013
ii. 3G Penetration
5.3.5 Far East & China
i. Mobile Penetration
ii. 3G Services
Figure 5.9: Far East & China Cellular Subscriber Forecasts (m) by Technology (2G, 2.5G, 3G, 3.5G/3.9G) 2008-2013
Table 5.8: Far East & China Cellular Subscriber Forecasts (m) by Technology (2G, 2.5G, 3G, 3.5G/3.9G) 2008-2013
5.3.6 Indian Sub Continent
i. Mobile Penetration
Figure 5.10: Indian Sub Continent Cellular Subscriber Forecasts (m) by Technology (2G, 2.5G, 3G, 3.5G/3.9G) 2008-2013
ii. 3G Services
Table 5.9: Indian Sub Continent Cellular Subscriber Forecasts (m) by Technology (2G, 2.5G, 3G, 3.5G/3.9G) 2008-2013
5.3.7 Rest of Asia Pacific
i. Mobile Penetration
Figure 5.11: Rest of Asia Pacific Cellular Subscriber Forecasts (m) by Technology (2G, 2.5G, 3G, 3.5G/3.9G) 2008-2013
ii. 3G Adoption
Table 5.10: Rest of Asia Pacific Cellular Subscriber Forecasts (m) by Technology (2G, 2.5G, 3G, 3.5G/3.9G) 2008-2013
5.3.8 Africa & Middle East
i. Market Background
ii. Mobile Penetration
Figure 5.12: Africa & Middle East Cellular Subscriber Forecasts (m) by Technology (2G, 2.5G, 3G, 3.5G/3.9G) 2008-2013
iii. Players
iv. ARPU
Table 5.11: Africa & Middle East Cellular Subscriber Forecasts (m) by Technology (2G, 2.5G, 3G, 3.5G/3.9G) 2008-2013
v. 3G Adoption

6. Forecasts

6.1 Forecast Approach
6.1.1. What is Included?
6.1.2. What is Excluded?
i. Assumption
6.1.3 Methodology
6.1.4 Retail Revenue vs. Retained Revenue
6.2 Forecast Highlights
6.2.1 Mobile Content will not be Significant to MNOs
6.2.2 The Real Battleground will be Smart Pipe vs. On-Portal
6.2.3 The On-Portal Model is not Dead - Yet
6.2.4 Content Providers will Continue to try to Bypass MNOs
6.2.5 Third Parties may be at Risk
6.2.6 Roles and Responsibilities are Poorly Understood
6.3 Mobile Content Subscriber Forecasts
6.3.1 ARPU per Subscriber
Table 6.1: Monthly ARPU per Subscriber, Split by Voice/Data by Region, 2008-2013
6.3.2 Global Cellular Subscriber Growth
6.4 Mobile Content Revenue Forecasts
6.4.1 Total Annual Data Revenues
Figure 6.1: Total Annual Data Revenues ($m) by Region 2008-2013
Table 6.2: Total Annual Data Revenues ($m) by Region 2008-2013
6.4.2 Non-Messaging Mobile Content Revenues
Table 6.3: % Non Person-to-Person Messaging Mobile Data ARPU by Region 2008-2013
Figure 6.2: Non Person-to-Person Messaging Mobile Data Revenues ($m) by Region 2008-2013
Table 6.4: Non Person-to-Person Messaging Mobile Data Revenues ($m) by Region 2008-2013
Figure 6.3: Total Non-Messaging Mobile Content Revenues (End-User Generated plus Adspend) ($m) by Region, 2008-2013
Table 6.5: Total Non-Messaging Mobile Content Revenues (End-User Generated plus Adspend) ($m) by Region, 2008-2013
6.4.3 Forecasts by Scenario/Type of Player
i. Dumb Pipe Scenario
Table 6.6: Global Non-Messaging Mobile Content Revenue Distribution ($m) by Category of Player, Dumb Pipe Scenario, 2008-2013
ii. Smart Pipe Scenario
Table 6.7: Global Non-Messaging Mobile Content Revenue Distribution ($m) by Category of Player, Smart Pipe Scenario, 2008-2013
iii. On-Portal Scenario
Table 6.8: Global Non-Messaging Mobile Content Revenue Distribution ($m) by Category of Player, On-Portal Scenario, 2008-2013
6.4.4 Forecasts by Region
i. North America
Table 6.9: Net Revenues ($m) Forecast Summary by Scenario, North America 2008-2013
Table 6.10: Net Revenues ($m) Forecast Summary by Category of Player, North America, 2008-2013
a. Dumb Pipe
Figure 6.4: Net Revenues ($m) by Category of Player, Dumb Pipe Scenario, North America 2008-2013
b. Smart Pipe
Figure 6.5: Net Revenues ($m) by Category of Player, Smart Pipe Scenario, North America 2008-2013
c. On-Portal
Figure 6.6: Net Revenues ($m) by Category of Player, On-Portal Scenario, North America 2008-2013
ii. South America
Table 6.11: Net Revenues ($m) Forecast Summary by Scenario, South America 2008-2013
Table 6.12: Net Revenues ($m) Forecast Summary by Category of Player, South America 2008-2013
a. Dumb Pipe
Figure 6.7: Net Revenues ($m) by Category of Player, Dumb Pipe Scenario, South America 2008-2013
b. Smart Pipe
Figure 6.8: Net Revenues ($m) by Category of Player, Smart Pipe Scenario, South America 2008-2013
c. On-Portal
Figure 6.9: Net Revenues ($m) by Category of Player, On-Portal Scenario, South America 2008-2013
iii. Western Europe
Table 6.13: Net Revenues ($m) Forecast Summary by Scenario, Western Europe, 2008-2013
Table 6.14: Net Revenues ($m) Forecast Summary by Category of Player, Western Europe 2008-2013
a. Dumb Pipe
Figure 6.10: Net Revenues ($m) by Category of Player, Dumb Pipe Scenario, Western Europe, 2008-2013
b. Smart Pipe
Figure 6.11: Net Revenues ($m) by Category of Player, Smart Pipe Scenario, Western Europe, 2008-2013
c. On-Portal
Figure 6.12: Net Revenues ($m) by Category of Player, On-Portal Scenario, Western Europe, 2008-2013
iv. Eastern Europe
Table 6.15: Net Revenues ($m) Forecast Summary by Scenario, Eastern Europe, 2008-2013
Table 6.16: Net Revenues ($m) Forecast Summary by Category of Player, Eastern Europe, 2008-2013
a. Dumb Pipe
Figure 6.13: Net Revenues ($m) by Category of Player, Dumb Pipe Scenario, Eastern Europe, 2008-2013
b. Smart Pipe
Figure 6.14: Net Revenues ($m) by Category of Player, Smart Pipe Scenario, Eastern Europe, 2008-2013
c. On-Portal
Figure 6.15: Net Revenues ($m) by Category of Player, On-Portal Scenario, Eastern Europe, 2008-2013
v. Far East and China
Table 6.17: Net Revenues ($m) Forecast Summary by Scenario, Far East & China, 2008-2013
Table 6.18: Net Revenues ($m) Forecast Summary by Category of Player, Far East & China, 2008-2013
a. Dumb Pipe
Figure 6.16: Net Revenues ($m) by Category of Player, Dumb Pipe Scenario, Far East & China, 2008-2013
b. Smart Pipe
Figure 6.17: Net Revenues ($m) by Category of Player, Smart Pipe Scenario, Far East & China, 2008-2013
c. On-Portal
Figure 6.18: Net Revenues ($m) by Category of Player, On-Portal Scenario, Far East & China, 2008-2013
vi. Indian Sub Continent
Table 6.19: Net Revenues ($m) Forecast Summary by Scenario, Indian Sub Continent, 2008-2013
Table 6.20: Net Revenues ($m) Forecast Summary by Category of Player, Indian Sub Continent, 2008-2013
a. Dumb Pipe
Figure 6.19: Net Revenues ($m) by Category of Player, Dumb Pipe Scenario, Indian Sub Continent, 2008-2013
b. Smart Pipe
Figure 6.20: Net Revenues ($m) by Category of Player, Smart Pipe Scenario, Indian Sub Continent, 2008-2013
c. On-Portal
Figure 6.21: Net Revenues ($m) by Category of Player, On-Portal Scenario, Indian Sub Continent, 2008-2013
vii. Rest of Asia-Pacific
Table 6.21: Net Revenues ($m) Forecast Summary, Rest of Asia-Pacific, 2008-2013
Table 6.22: Net Revenues ($m) Forecast Summary by Category of Player, Rest of Asia-Pacific, 2008-2013
a. Dumb Pipe
Figure 6.22: Net Revenues ($m) by Category of Player, Dumb Pipe Scenario, Rest of Asia-Pacific, 2008-2013
b. Smart Pipe
Figure 6.23: Net Revenues ($m) by Category of Player, Smart Pipe Scenario, Rest of Asia-Pacific, 2008-2013
c. On-Portal
Figure 6.24: Net Revenues ($m) by Category of Player, On-Portal Scenario, Rest of Asia-Pacific, 2008-2013
viii. Africa & Middle East
Table 6.23: Net Revenues ($m) Forecast Summary by Scenario, Africa & Middle East, 2008-2013
Table 6.24: Net Revenues ($m) Forecast Summary by Category of Player, Africa & Middle East, 2008-2013
a. Dumb Pipe
Figure 6.25: Net Revenues ($m) by Category of Player, Dumb Pipe Scenario, Africa & Middle East, 2008-2013
b. Smart Pipe
Figure 6.26: Net Revenues ($m) by Category of Player, Smart Pipe Scenario, Africa & Middle East, 2008-2013
c. On-Portal
Figure 6.27: Net Revenues ($m) by Category of Player, On-Portal Scenario, Africa & Middle East, 2008-2013

7. Recommendations for Mobile Content Players

7.1 Overview of Strategic Approach Required
7.2 Recommendations for Mobile Network Operators
7.3 Recommendations for Content Providers
7.4 Recommendations for Third Partie

8. Case Studies

8.1 Blyk
8.1.1 Blyk Overview
8.1.2 The Blyk Model
8.1.3 Mobile Advertising
Table 8.1: Blyk Highlights Success of Mobile Advertising Model
8.1.4 Mobile Social Networking
8.1.5 The Role of Wholesale
8.1.6 Revenue Models
8.2 JumpTap
8.2.1 JumpTap Overview
8.2.2 Business Models
8.2.3 Mobile Advertising Market Drivers
8.2.4 Wholesale
8.2.5 Revenue Models
8.3 mBlox
8.3.1 mBlox Overview
8.3.2 Mobile Content Revenue Models
8.3.3 Wholesale
Figure 8.1: mBlox Partner Relationship Model, 2008
8.3.4 Carrier Off-portal Revenues to Double in Three Years: mBlox
8.4 Valista
8.4.1 Valista Overview
8.4.2 Off-Portal Market
8.4.3 Wholesale Opportunitie

Companies Referenced

Accel Partners, Advent Venture Partners, Amadeus Capital Partners, America Movil, America Online, Amp'd Wireless, Apple inc, Apple i-phone, AT & T Wireless, BBC, Bell Canada, Blyk, British Telecom (BT), Coca-Cola, Cricket, Dialog Telecom, Disney Mobile, DRM, Duff Ackerman & Goodrich, Elisalat, Enterprise Ireland, Goldman Sachs, Google, Industrial & Financial Investments, JAFCO, JumpTap, L'Oreal Paris, MBlox, Mobile Telesystems, MSN, MTN, MySpace, Nokia, Nokia Siemens Networks, Norwest Venture Partners, Novus Ventures, NTT, NTT DoCoMo, Oger Telecom, Orange, Orascom Telecom, Rogers Wireless, Saudi Telecom, Scale Venture Partners, Sofinnova Partners, Sprint Nextel, Stepstone, Sutter Hill Ventures, Telecom Italia, Telefonica Moviles Espagna, Telenor, Telia Sonera, Telnore, TELUS, Temenor, Tesco Mobile, T-Mobile,Trident Capital, Trinity Venture Capital, Unicom, Valista, Vimplecom, Verizon Wireless, Virgin, Virgin Mobile USA, Vodafone, Walt-Disney, Yahoo!, Yell.com, YouTube, Zain, Zong, ZYB.