New Mobile services on stand-by until the mobile operators have their terminal strategy ready
|Now that the first mobile phones sporting MMS and GPRS – and even colour screens and built in cameras are available on the market, one of the big questions is, how will the mobile operators ensure that the mobile consumers start taking an interest in – and buying this new generation of 2.5G mobile phones?|
|Until there is a reasonable penetration of these new phones, new mobile services based on MMS and GPRS will not take off and open up a whole new market, standing on the shoulders of the success that p2p and premium SMS has enjoyed all over Europe. The operators badly need this new revenue, to help finance their 3G (UMTS) investments.|
So even if the content providers create great new mobile services, in the hope that the mobile operators will eventually come up with strategy for a sensible revenue sharing deal, someone still has to have a plan on how to convince the mobile consumers that now is the time to upgrade their mobile phone to a 2.5G MMS/GPRS terminal.
Most mobile consumers buy their mobile phones from independent dealers, or from shops owned by the mobile operators. The independent dealers get a commission from the mobile operator, each time they sell a mobile phone and of course the mobile operator saves that commission each time they sell a mobile phone from one of their own shops. Either which way, the mobile operators have the upper hand and can influence the mobile consumers decision on what mobile phone to choose, when they are actually in a shop, buying a new mobile phone.
If the mobile operators want customers to buy the new 2.5G terminals, they are going to have to turn their whole sales strategy upside down and create a new strategy that solely focuses on marketing and selling GPRS/MMS terminals.
Today the mobile operators reward dealers with a commission depending on what type of contract the dealer sells to the customer. Which type of terminal the dealer actually sells to the customer is irrelevant and does not affect the dealer’s commission! In other words, most dealers can actually make the most money by selling old 2G mobile phones that do not feature GPRS or MMS! Add to this that in some countries, mobile customers sign a irrevocable contract that runs for 12 or 18 months!
In other words, in just a few minutes, the mobile operators have excelled themselves by having a potential 2.5G customer in their hands – and sent them out of the door with an old 2G mobile phone in one hand and an irrevocable contract in the other, thereby taking that customer out of the GPRS picture for the duration of the contract!
Agreed – it is a fantastic strategy if we were only going to have 2G mobile networks and 2G mobile phones for the rest of the decade! But the mobile operators are already offering GPRS – and have been for up to a year! The MMS enabled phones are on the market and in the shops! So maybe the operators should start taking the time to think a little bit about some “small changes” in their retail strategy to get customers buying the new generation of mobile phones.
Premium SMS mobile services are still growing and according to the latest report from Strand Consult “How to make money on mobile services” a picture of the current & future Market for Mobile Services in Europe, Premium SMS based services will have a market value of almost Euro 3 billion in 2003. New services based on MMS and Java will have a market value of around the same in 2003 – doubling the size and value of the market for mobile services next year!
The good news is that the new generation of mobile terminals can of course handle SMS, so the growth of the premium SMS market is no problem. The bad news? The mobile phones the operators are pushing into the mobile consumers hands cannot handle MMS and Java! As long as the mobile operators do not get a new terminal sales strategy into place – there will not be the corresponding market for MMS/Java based services and the operators can wave goodbye to around Euro 3 billion next year. In these days, perhaps not the best news to break to your shareholders…
“How to make money on mobile services” a picture of the current & future Market for Mobile Services in Europe, from Strand Consult takes into account the mobile operators unwillingness to move forward with a new terminal sales strategy and goes through in detail, all the prerequisites from all the players in the mobile marketplace that need to be in place, before the next generation of mobile services can really take off.
All the figures in the report are based on actual sales of mobile services today and all the projected estimates up to 2005 on the value and segmentation of the mobile services market, based on conservative estimates and data collected in Europe and from the more mature and advanced mobile countries like Korea.
|More information on the report|