WCIS Insight: The state of the non-voice market: a study of diversified revenue streams and customer retention

Through a series of regional chapters, this Insight provides a commentary on the status, growth and importance of the non-voice market. Each chapter analyses the size of the mobile market for data services highlighting key trends in the spread of data usage and the importance of the mobile broadband market as a key driver for growth. Each regional overview details data revenues splits (SMS revenues as opposed to non SMS revenues), the proportion of data revenues over service revenues and data ARPU.

Through primary contact with 250 operators around the world, the report highlights operator strategies around non voice service development as a means of differentiation in an increasingly competitive marketplace. Not only are revenues from data services helping to offset falling voice revenues, but are increasingly seen as a strategic tool to reduce churn and improve consumer retention.

Each chapter of the report also provides a case study outlining specific operator strategies around VAS and how network upgrades are helping to meet customer demands for higher download speeds.

Key issues addressed:

• How much have non-voice revenues grown in the last year?
• What are the main drivers of data revenue growth in different regions?
• Who are the leading operators in terms of data revenues, region by region?
• How are 3G network launches in emerging markets shaping operator strategies and impacting non-voice revenues?
• Are voice revenues being displaced by data revenues in developed markets?
• Is SMS/MMS driving data revenue growth?
• Which non-voice services have proven successful to operators worldwide?
• How is the growth in mobile broadband shaping the wireless data market?
• How is the use of smart phones contributing to growing non-voice revenues?

Key Highlights:

• Informa estimates the value of the mobile data services market was US$181.8 billion in 2008, representing y-o-y growth of approximately 23%. Between them, Asia Pacific (37%), Western Europe (26%) and North America (21%) contribute 84% of the global market. Growth, however, has been most noteworthy in the Americas and Africa where operators have been busy investing in network upgrades and new content offerings.
• Accounting for 54% of the world’s mobile non-voice market, the non-SMS market was worth US$97.5 billion with Asia Pacific (43%) again the main contributor. Japan alone makes up 57% of the Asia Pacific region’s non-SMS market. The number of MMS sent during 4Q08 increased by 50% y-o-y to over 43 billion.
• The commercial launches of 3G, 3.5G and high speed broadband networks has resulted in a boost in mobile broadband usage and subscription numbers with Informa estimating the total number of users to be in excess of 225 million at the end of 2008. Growth has been particularly rapid in the Americas and Central & Eastern Europe with subscription numbers rising in these regions by 380% and 230% respectively.
• As a result of the unusually high SMS usage level in the Philippines, Smart Communications (56%) is the operator with the highest proportion of data revenues to service revenues across all regions. The operator reported that in 4Q08 SMS usage on its network equated to users sending over 600 SMS per month.
• Illustrating the growth of the non-voice market, TIM Brazil has made a reputation for the success of its VAS with non-SMS revenues accounting for 76% of its data revenues at the end of 2008. This growth has been driven by its successful USB mobile broadband offer and enhanced content for its subscribers.
• The device market is playing a significant role in the development of the non-voice market. Those operators that have started to distribute the iPhone 3G and other non-traditional devices have seen a rapid increase in mobile data usage. O2 topped the non-voice revenue market (approximately US$3.3 billion) in Europe for 2008 and pointed to its exclusive distribution of the iPhone 3G as a key factor.

Market Data Covered

• North America, data revenues by leading operators, 4Q07-4Q08
• North America, SMS traffic by leading operators, 4Q07-4Q08
• North America, MMS traffic by leading operators, 4Q07-4Q08
• Western Europe data revenues by leading operators, 4Q07-4Q08
• Western Europe, proportion of data revenues to total service revenues by leading operators, 4Q07-4Q08
• Central and Eastern Europe, top 10 operators by actual data revenues, 4Q07-4Q08
• Central and Eastern Europe, WCDMA networks deployed in 2008
• Asia Pacific, data revenues by leading operators, 4Q07-4Q08
• Asia Pacific, data revenues (local currency) by leading operators, 4Q07-4Q08
• Asia Pacific, proportion of data revenues to total service revenues by leading operators, 4Q07-4Q08
• Asia Pacific, proportion of non-SMS revenues to total data revenues by leading operators
• Latin America, top 10 operators’ data revenues, 2007-2008
• Middle East, fixed-broadband population penetration, 4Q07-4Q08
• Middle East, leading operators by data revenue, 2007-2008
• Africa, data revenues by leading operators, 1Q08-4Q08
• Africa, SMS traffic by leading operators, 1Q08-4Q08